Mainland company formation in the UAE is the best idea at this time. UAE is the ideal location for starting a new company. Because it is a tax haven and has a strong network of banks. Also, UAE is the trading hub of the Middle East.
According to the commercial company law of UAE, a company is a contract. Furthermore, two or more persons are committed to participating in the economic enterprise. And, they will have a profit realization objective by contributing a share in capital or work.
Also, they will divide the profit or loss resulting from enterprise Article 8 between themselves. In addition, a single person can also incorporate or hold a company in accordance with the provisions of this law.
A DED (Department of Economic Development) registered Company is called a Mainland company. Further, you will be provided a business license to start doing business in the UAE.
What is a Mainland Company?
A Mainland company can be involved in any industrial, commercial, trading, professional, or tourism activity in the UAE. In addition, you are free to do most of the business activities except for a few. Also, professional business activities may require special approvals from higher authorities.
However, some business activities are reserved for UAE nationals only. A foreign investor can start a business activity with a partnership. Therefore you will have to give 51% of ownership to the UAE National. Furthermore, if you choose a sole establishment company, you can own 100% shares.
The company shareholders must fill and submit the company formation documents. In addition, you must include an appointment of a manager by the memorandum of Association (MOA) or service Agreement. It may be for a limited or unlimited period of time.
Finally, there must be at least one manager or up to five managers in a mainland company in the UAE.
Salient Features of Mainland Company Formation UAE
- Free from corporate tax
- In addition, no Capital Required
- No troublesome process
- Also, the audit is not mandatory
- And, the license can be obtained easily
- You can control your business from any part of the UAE.
- And, no restrictions on currency
- Employment visa is provided easily
- Easy to open a corporate bank account
- Furthermore, 100% repatriation of capital and profit is possible
- Finally, the business office can be located anywhere in the UAE
Advantages of Mainland Company Formation UAE
- 100% repatriation of the share capital
- Also, 0% corporate and personal taxes
- Mainland company can have more than one branch
- Availability of a wide range of business activities
- Capacity to create a flexible startup
- In addition, compatible to deal with the UAE or GCC governments
- Potentiality to expand your offerings
- Liberty to grow your company and team
- Also, capacity to trade internationally and expand your presence
- Freedom to trade across Dubai and in the UAE
- Heightened company presence
- Furthermore, get government contracts
- Perform business transactions with other mainland entities.
- Target to trade with other mainland companies
- Finally, No limitation on the number of visas
- Also, there is no yearly audit requirement.
- Low import duty
- Ease of getting affordable space with flexible rent or lease for office anywhere.
Types of Mainland Company Formation
Forms of Companies for Foreign Investors
1. Sole Proprietorship
A sole proprietory company is owned by an individual. It is not owned by any company or group. The owner of the company can own 100% of the company. Also, you can control all the business activities.
In addition, you can keep 100% of the company’s profit. Furthermore, the owner of a sole proprietory company will be charged with all the business obligations and financial commitments.
2. Civil Company
This form of mainland company formation is a business partnership for professionals. Therefore you are free to partner with other companies.
3. One Person Limited Liability Company
In this form of company is owned by natural or just one corporate body. Also, this is the only form of company that gives you the right to do business with at least two parties to sign a contract.
Furthermore, One Person Limited Liability Company contains just one person. In addition, this form of company is similar to a sole proprietorship.
But in this form, the company’s liability is limited to that one partner’s share only. Finally, in the case of a sole proprietorship, there is unlimited liability.
4. Private Share Holding Company Or Private Joint-Stock Company
This form of the company allows a partnership of 2 to 200 people. In addition, the partners must invest at least AED 5, 000,000 in the business.
5. Public Share Holding Company Or Public Joint-Stock Company
In a Public Share Holding Company Or Public Joint-Stock Company, the company’s capital is divided into transferable shares of equal values.
6. Limited liability Company (LLC)
This form of company is a type of enterprise. And it is a mixture of both partnership and corporate structure. In addition, there must be between 2 -50 investors in an LLC.
Also, each and every investor is liable to the extent of his or her share in the company. Furthermore, LLC can be changed to other legal forms for a Public Share Holding organization.
7. Simple limited partnership
This type of partnership is formed between at least two partners. The one must be a general partner and the other a limited partner.
The general partner is the one who is liable for all the company’s liabilities of personal and business assets.
But, the limited partner is liable only for the share of company liabilities which is equal to the total share of the company’s capital.
8. Partnership Company
In a partnership company, a single business is owned by two or more peoples. Every aspect of the business contribution is done by the partners.
In addition, the company must be administered well.
Further, a contract must be assigned to one partner or any party to administer the company.
Opening Branch Offices
9. Branch of a foreign company
A branch of foreign company can participate in professional, commercial, and industrial activities.
But, for doing any commercial or industrial activity the company must get approval from the Ministry of Economy.
10. Representative Office
This representative office is a business activity that is conducted by a branch office. Further, it incorporates the authorization to promote and market the business activities of the parent company. But, it is not allowed to conduct any business operations.
A local service agent (LSA) is required for a representative office. The LSA can be a UAE national. Also, a representative office must be owned by at least one UAE national.
Further, the LSA’s duties are limited. He/She can provide only necessary services. Also, the person can not bear any financial liabilities of the parent company, its branch, or any other offices.
11. Branch of Dubai-Based Company
A branch of Dubai based company must practice at least one or all of the activities mentioned in the license of the parent company.
Furthermore, if a company has many branches, each branch is allowed to carry out different activities. But all the activities must be included in the license of the main company.
12. Branch of UAE- Based Company
This form of company is similar to the branch of Dubai based company. So, you are allowed to carry out all or just one activity of the main company.
In addition, if the main company has multiple branches, each branch can perform various activities that are included in the license of the main company.
13. Branch of GCC-Based Company
A Branch of GCC- based company is also similar to the Dubai and UAE based companies. You can carry out one or all the activities included in the license of the main company.
In addition, if the main company has multiple branch all the branch can carry out different business activity incuded in the license of the main company.
At last, you must know that only the activities included in the Dubai branch license will be allowed regardless of other activities registered in any other GCC company.
14. Branch of Free zone Company
The branch of the freezone company’s activities must be registered in Dubai Mainland. Further, it can practice any professional, commercial, or industrial business activities.
At last, your main company license must be issued in a branch of a foreign company and not in a UAE Freezone.
In addition, you can expand your operations to the mainland by obtaining a branch license from DED.
For UAE Nationals Only
15. Home Based Business For UAE Nationals (INTELAQ)
This is a special license only for the UAE nationals. It includes professional, trade, or artisan type of business. In addition, this form of business must be adaptable to residential areas.
Also, the health of any person or the environment must not be harmed by the activity. There must not be any noise or irritation to the neighbors.
At last, an INTELAQ license does not give you the right to sponsor employees. You can take legal forms like Sole Establishment, LLC, Civil Company, and Partnership.
16. SME License
A company that is 100% owned by the UAE national is provided with an SME license. They can take any legal form. In addition, with this type of license, you can sponsor employees. Also, this license is valid for three years.
Things To Do Before Mainland Company Formation
- Research the UAE and Other markets you are interested in starting a business.
- Further, check if all your business requirements are available in the location you are choosing
- In addition, make good research on the location of your business to grab the right customers.
- Finally, analyze the site thoroughly before confirming the site.
- Also, create an appealing proposal
11 Steps For Mainland Company Formation
1. Select a Business Activity For Mainland Company Formation
The first step in setting up a mainland company formation is selecting the best suiting business activity. The fees of the company set up depending on the type of activity. You can choose from the below:
- Commercial (Trading)
- Professional (Vocational)
- Industrial (Manufacturing)
2. Find the best Local Sponsor
All foreign companies must have a local sponsor. Further, the local sponsor will be responsible for handling all the license requirements for a branch office. Also, the local sponsor will not be bearing any liability to lose or capital contribution.
3. Select a Legal Form For Mainland Company Formation
Choose the best type of legal entity to run your business activity. All the policies and regulations depend on the type of ownership and business establishment. Set up a company type from below:
- Joint Liability Company
- Simple Commandite Company
- Limited liability Company (LLC)
- Public Joint Stock Company (PJSC)
- Private Joint Stock Company (PrJSC)
- Sole establishment
- Civil company
- Local Company Branch
- Foreign Company Branch
- GCC Company Branch
- Free zone company branch
- Foreign companies’ representative offices
4. Trade Name Registration
You are advised to suggest three names for your trade name registration.
Terms and Conditions
- The name you choose must be clear
- Must have a meaning and should be compatible with the status of the company
- It must not be related to any religion, governing authority, or external bodies.
- Name must not violate the public morals and order of the country.
- The trade names must end with the company’s legal form eg: LLC, EST, etc.
- It must not be registered previously
Further, you will be required to submit documents of all the partners. The main documents you will need are:
- Passport Copy
- Visa Copy
- Emirates ID
- NOC for UAE Residents
- Proof of residential address.
How to Change a Trade Name:
- It will cost you at the initial stage.
- You will need to change in all records associated with government (eg: Labour Card of Employees, Immigration Cards, etc.)
5. Applying License For Mainland Company Formation
You will require to register for a proper license related to your business activity. Department of Economic Development (DED) is responsible for providing the License for all mainland companies formation outside the freezones. Here are some types of license you can choose from:
a. Industrial license
- This type of license is provided for companies involved in manufacturing.
- They are valid for a definite period only
- It obligates the company to have an own or leased warehouse in the Emirate.
b. Professional license
- This license is issued for the companies providing services Eg: training, management, consultancy, etc.
- It can be owned fully or partially depending on the required activity.
- Some activity allows only 49% ownership while others allow full ownership.
- The individual or corporate Local service Agent is allowed for administration only.
c. Commercial license
- This license is adequate for trading and retail business.
- You can buy, sell, import and export goods, real estate service, logistics, tourism and travel, auto vehicle rental business, etc.
- At last, a single license allows a maximum of ten activities
6. Initial Approval from DED
This approval is important because it determines if your business is legal in the UAE. Also, it confirms your company name. You will be provided with an initial approval certificate.
In addition, you will need approval from the General Directorate of Residency and Foreigners Affairs before the initial approvals. After this procedure, you can carry out business licensing formalities.
7. MOA and LSA Agreement
You will be provided MOA (Memorandum of Association) and LSA (Local Sponsor Agreement) by DED at stages 3 and 4. This will be based on the information provided by you.
8. Choose a business location For Mainland Company Formation
You will have to choose a physical address in the Emirates. Further, you must submit a rent agreement (MoU) registered with Ejari for attestation.
Further, it can either be rented or purchased anywhere in the Emirates. You can choose from the below:
- Office Space
- Business center
- Warehouse Showroom
9. Approvals from Relevant Authorities
Some business activity you choose may need approvals from different government entities. Here are some legal entities governing different activities:
- Ministry of Economy
- Ministry of Justice
- Civil Defence
- Ministry of Interior
- RTA ( Road and Transport Authority )
- Ministry of Health
- TRA ( Telecom Regulatory Authority)
10. Business License For Mainland Company Formation
You can get your business license after completing the documents submitting process and approvals. Also, you must finish all the required payments.
Finally, you will be given a license and an MOA. And, you will be able to start your business activities freely.
11. Chamber Membership For Mainland Company Formation
This is the final step before you start your business activity in any Emirate of UAE. In this procedure, you will be required to apply for membership in the chamber of commerce.
In addition, this must be done in any Emirate where you plan to do your business.
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