Mainland Business Setup in UAE

Mainland companies are licensed by the Department of Economic Development (DED) and can trade anywhere in the UAE and internationally. Free Zone companies are licensed within designated zones and must appoint a local distributor to trade in the mainland market.

 

Business Idea: Determining your business idea and target market.

 

Choose a Business Structure: Decide whether you want to set up a sole proprietorship, a limited liability company (LLC), or a public limited company. Each structure has its own advantages and disadvantages.

 

Business Plan: Come up with a comprehensive business plan. A well-crafted business plan outlines your goals, strategies, and financial projections.

 

Select a Business Name: Ensure your chosen name is unique and doesn't conflict with existing businesses. Check with the Department of Economic Development (DED) for availability.

 

Obtain a Business License: Apply for a business license from the DED. The specific requirements may vary depending on your business activity.

 

Find a Suitable Location: Locate a suitable premises for your business, considering factors like zoning regulations and accessibility.

 

Hire Employees: If you plan to hire employees, comply with local labor laws and obtain the necessary work permits.

 

Open a Bank Account: Set up a corporate bank account to manage your business finances.

Comply with Tax Regulations: Familiarize yourself with Abu Dhabi's tax laws and ensure timely compliance.

 

Register for VAT: If your business exceeds the VAT registration threshold, register for Value-Added Tax (VAT).

 

Obtain Necessary Permits and Approvals: Depending on your business sector, you may need additional permits or approvals from relevant government agencies.

 

It's advisable to seek professional advice from local business consultants or lawyers to ensure compliance with all legal requirements.

Select your business activity, reserve a trade name, obtain initial approval, draft the Memorandum of Association (MoA), secure a physical office or Ejari, and apply for the trade license through the DED of your emirate.

 

Choose your business activity: Choose what kind of business you want to do. There’s a wide range of business activities to choose from.

 

Select a legal structure: Consider factors like ownership, liability, and tax implications. Common options are sole proprietorship, limited liability company (LLC), and public joint stock company.

 

Find a local sponsor: If you're not a UAE national, you'll need a local sponsor. They can be an individual or a company.

 

Get a visa: Depending on your business activity, you might need a visa to stay and work in the UAE.

 

Obtain necessary licenses and permits: Different activities require different permits. Check with the relevant government departments.

 

Register your company: Submit the required documents to the Department of Economic Development (DED) in the emirate where you want to set up.

 

Open a corporate bank account: You'll need a bank account for your business transactions.

Remember: The process can vary slightly depending on the emirate and the specific nature of your business. It's always a good idea to consult with a local business setup specialist for personalized guidance

Mainland companies must have a registered business address with a valid tenancy contract (Ejari in Dubai). Some emirates allow flexi-desk options for certain activities, subject to DED approval.

 

Mainland Business Setup

• Location: Can operate anywhere within the UAE mainland.
• Ownership: Can be fully foreign-owned.
• Taxation: Subject to corporate tax (currently 55%) and VAT (5%).
• Market Access: Can trade directly with local and international markets.
• Local Partner: Might require a local partner (depending on the activity).

 

Free Zone Business Setup

• Location: Restricted to specific designated areas.
• Ownership: Can be fully foreign-owned.
• Taxation: Corporate tax-free for a specified period (often 50 years). VAT is applicable, but there are often exemptions or reduced rates.
• Market Access: Primarily focused on export and re-export activities.
• Local Partner: No local partner required.

Most activities now allow 100% foreign ownership under the updated Commercial Companies Law. However, some strategic or regulated sectors still require a UAE national as a partner or local service agent based on the approved activity list

 

Limited Scope of Operations: Free zone companies are typically restricted to conducting business within the designated free zone. 

 

No Ownership of Property: Free zone companies cannot own real estate within the UAE. 

 

Restrictions on Hiring Local Employees: While free zone companies can hire foreign employees, they often have restrictions on hiring local Emirati staff. These restrictions vary depending on the specific free zone.

 

Limited Tax Benefits: While free zone companies enjoy corporate tax exemptions, they may still be subject to other taxes, such as import/export duties or fees charged by the free zone authority.

 

Regulatory Compliance: Free zone companies are subject to the regulations and rules of the specific free zone in which they operate. This can sometimes be more complex than complying with general UAE business laws.

 

Limited Liability: While free zone companies offer limited liability protection, the extent of this protection can vary depending on the specific free zone laws and the company's activities.

You’ll need passport copies of shareholders and managers, initial approval, MoA, trade name reservation certificate, and a valid tenancy contract. Additional documents may apply depending on the activity or sector.

 

Tax-friendly: No corporate tax? Yep, you heard that right! Plus, the labor and financing costs are pretty competitive.

 

No red tape: Forget about those pesky trade barriers and foreign exchange controls. It's a smooth sailing experience.

 

Strategic location: The UAE is like a hub for business, connecting you to billions of customers in Africa, West Asia, Eastern Europe, and the Middle East. And with world-class transport links, it's easy to get around and do business.

 

Easy setup: Setting up a business here is a breeze. It's straightforward and won't break the bank.

 

Talent and infrastructure: You'll find a pool of highly skilled people and top-notch infrastructure. Perfect for startups and established businesses alike.

 

Lifestyle: Dubai offers a high quality of life, with unparalleled safety and security. It's a magnet for global talent.

Market research made easy: Conducting market research is a breeze thanks to clear procedures and a solid legal framework.

Mainland licenses are issued under four main categories: Commercial, Professional, Industrial, and Tourism, each designed for specific types of business activities.

 

Commercial License: This is for businesses that buy, sell, or trade goods. Think of it as a license to run a store or a wholesale business.

 

Industrial License: If you're planning to manufacture products or process raw materials, you'll need this license. Factories and workshops usually require this.

 

Professional License: This is for businesses that offer professional services like consulting, accounting, or legal advice. Think of it as a license to practice your profession.

 

Tourism License: If you're in the tourism industry, such as running a hotel or a travel agency, you'll need this license.

 

Agricultural License: For businesses involved in farming, agriculture, or livestock, this license is necessary.

 

Service License: This covers a wide range of businesses that provide services, like cleaning, maintenance, or transportation.

Mainland licenses are renewed annually through the respective DED, provided all compliance documents and tenancy contracts are up to date.

 

Choose a business activity: Decide what your business will do. The UAE has a wide range of business activities you can choose from.

 

Select a legal structure: The most common options are sole proprietorship, limited liability company (LLC), and public joint stock company. Each has its own benefits and drawbacks.

 

Obtain a business license: This is essential for operating legally in the UAE. The specific requirements will depend on your business activity and legal structure.

 

Register your company name: Your company name must be unique and comply with local regulations.

 

Obtain visas and permits: If you're planning to hire employees or work in the UAE yourself, you'll need to obtain the necessary visas and permits.

 

Comply with local laws and regulations: This includes tax laws, labor laws, and other relevant regulations.

Remember: This is just a general overview, the specific requirements can vary depending on your business type, location, and other factors. It's always a good idea to consult with a local business setup specialist for personalized advice.

Yes. Conversion is possible through deregistration from the Free Zone authority and new registration under the DED. The process includes visa cancellations, new bank setup, and compliance with mainland ownership and licensing rules.

 

100% Foreign Ownership: For certain sectors and activities, foreigners can establish companies with complete ownership. This often includes technology, healthcare, and specialized industries.

Free Zone Companies: These are special economic zones where foreign investors can set up businesses with 100% owners

Mainland companies must maintain proper accounting records, file VAT and Corporate Tax returns where applicable, and submit audited financial statements if required by the DED or Ministry of Economy.

 

Choose Your Business Structure: Decide whether you want a sole proprietorship, a limited liability company (LLC), or a public limited company. Each has its own benefits and drawbacks.

 

Get Your Business Name Approved: Make sure your chosen name isn't already taken and that it complies with local regulations.

 

Obtain Necessary Licenses and Permits: Depending on your business type, you may need various licenses and permits. Research what's required for your specific industry.

 

Finding a Local Sponsor: If you're not a UAE national, you'll need a local sponsor to set up a business. This sponsor can be an individual or a company.

 

Open a Corporate Bank Account: Once you have your business license, you can open a corporate bank account to handle your business finances.

 

Register with Relevant Authorities: Make sure you're registered with the Department of Economic Development (DED) and any other relevant government agencies.

 

Remember: This is just a general overview, the specific requirements can vary depending on your business type, location, and other factors. It's always a good idea to consult with a local business setup specialist for personalized advice.