The United Arab Emirates (UAE) is a popular destination for businesses looking to set up operations in the Middle East. The UAE has two types of jurisdictions for setting up a business: free zones and the mainland. A mainland company (also known as an onshore company) is registered in Dubai and benefits from hassle-free trading within Dubai, the rest of the UAE, and internationally. Starting a mainland business in the UAE requires compliance with specific regulations and procedures set by the Department of Economic Development (DED). This guide will provide a step-by-step process to set up a mainland business in the UAE.

Understanding Mainland Business in UAE

What is a Mainland Business?

A mainland business is a company registered with the Department of Economic Development (DED) in the UAE. This type of company is also known as an onshore company. A mainland business can trade within the UAE and do business with local and international companies.

Advantages of a Mainland Business in UAE

Setting up a mainland business in the UAE can be a smart decision for entrepreneurs looking to conduct business in the local market. Some of the advantages of setting up a mainland business in the UAE include the following:

• Ability to trade directly with local UAE companies
• No restriction on the number of employees you can hire
• No requirement to pay any customs duties on goods and services
• Ability to conduct business in any part of the UAE
• No need to have a local sponsor or partner for some activities

Choosing the Right Business Activity

One of the first steps to starting a mainland business in the UAE is to select the right business activity. The type of business activity you choose will determine the licenses and permits required to operate your company.

List of activities allowed for a Mainland Business

The UAE government allows a wide range of activities for mainland businesses. These activities include:

• Trading activities
• Professional services
• Manufacturing activities
• Food and beverage activities
• Real estate activities
• Construction activities
• Consulting with the Department of Economic Development (DED)

Before selecting your business activity, it is recommended to consult with the DED. The DED can provide information about the activities allowed and the requirements for each activity.

Obtaining initial approval for your business activity

After selecting your business activity, you must obtain initial approval from the DED. The initial license is a document that confirms that your chosen business activity is allowed and that there are no conflicts with other businesses.

Finding a Local Partner

You must find a local partner to start a mainland business in the UAE. A local partner is a UAE national with 51% company ownership. One or more foreign investors can own the remaining 49%.

Requirement of a Local Partner

Under the UAE commercial companies law, a mainland business must have a local partner. The local partner must hold a majority stake in the company, typically 51%. The local partner must be a UAE national or a company wholly owned by UAE nationals.

Finding a reliable and trustworthy partner

It is essential to find a reliable and trustworthy local partner. It is recommended to work with a reputable business consultancy firm that can assist you in finding a local partner.

Drafting a partnership agreement

After selecting your local partner, you must draft a partnership agreement. The partnership agreement outlines each partner’s responsibilities and the partnership’s terms.

Selecting a Business Name and Registering Your Company

Selecting a name for your business is essential to starting a mainland business in the UAE. The name of your business must comply with UAE naming conventions.

Selecting a name that complies with UAE naming conventions

When selecting a name for your business, ensuring it complies with UAE naming conventions is important. The name should not contain any offensive language or religious references.

Reserving your business name

After selecting a name for your business, you must reserve the name with the DED. The name reservation is valid for 60 days and can be renewed.

Drafting your Memorandum of Association (MOA) and Articles of Association (AOA)

The MOA and AOA are legal documents that define the scope of your business activities and the structure of your company. It is important to work with a legal professional to draft these documents.

Obtaining approval for your MOA and AOA

Once the MOA and AOA have been drafted, they must be submitted to the DED for approval. The approval process typically takes a few days.

Registering your company with the DED

After obtaining the necessary approvals, you can register your company with the DED. The registration process involves submitting the required documents and paying the necessary fees.

Obtaining the Necessary Licenses and Permits

Once your company is registered, you must obtain the necessary licenses and permits to operate your business.

Types of licenses and permits required for a Mainland Business

The licenses and permits required for a mainland business in the UAE can vary depending on the type of business activity. Some of the most common licenses and permits include:

• Trade license
• Commercial Permit
• Industrial Permit
• Professional permit
• Applying for a trade license

A trade license is required for any business that engages in trading activities. To apply for a trade license, you must submit the required documents and pay the necessary fees.

Applying for a commercial permit

A commercial permit is required for businesses that engage in commercial activities, such as buying and selling goods. The process for obtaining a commercial permit can vary depending on the type of business activity.

Obtaining approvals from other government entities (if applicable)

Depending on the type of business activity, you may need to obtain approvals from other government entities, such as the Ministry of Health or the Dubai Municipality.

Opening a Bank Account

Opening a bank account is essential to starting a mainland business in the UAE.

Choosing the right bank for your business

Choosing a bank that offers the services and products best suited to your business needs is important.

Providing the required documents to the bank

To open a bank account, you must provide the bank with the necessary documents, including your passport, residency visa, and trade license.

Setting up online banking services

Online banking services can help you manage your finances more efficiently and effectively.

Hiring Employees and Sponsorship

When starting a mainland business in the UAE, you must hire employees and provide sponsorship.

Obtaining a residency visa for yourself and your employees

You must obtain a residency visa to work and live in the UAE. This process can vary depending on the type of business activity.

Sponsoring your employees and their families

As a business owner, you must sponsor your employees and their families to obtain residency visas.

Understanding the UAE labor laws

It is important to understand the UAE labor laws when hiring employees for your business. The labor laws in the UAE protect employees and set out the requirements for employers.

Mainland Business Requirements

To register a mainland business in the UAE, you must meet the following requirements:

• Office Space Requirement: According to the DED, each mainland company must lease a business facility that meets the minimum office space requirement of at least 200 sq ft. The type of business you intend to operate will determine the kind of facility to lease: a warehouse, shop, outlet store, food truck, retail unit, office, or a combination of many leasing types.
• Business License: You need to obtain a business license from the DED, which will define the type of business you can run and determines the extent of your business activities. You can apply for a commercial, industrial, or professional license.
• Partner Selection: To establish a mainland business in the UAE, you need to have a local partner who will own at least 51% of the company shares. The local partner can be an individual or a company registered in the UAE.

Steps to Start a Mainland Business in the UAE

The following are the steps you need to follow to start a mainland business in the UAE:

• Step 1: Choose a Business Activity – You must select the business type you want to operate in the UAE. Once you have decided on the type of business, you must ensure it is legal and complies with UAE laws and regulations.
• Step 2: Decide on the Legal Structure – The legal structure of your business depends on the type of business activity you wish to undertake. The legal structure options are sole proprietorship, limited liability company (LLC), and partnership. An LLC is the most common form of legal structure in the UAE.
• Step 3: Select a Trade Name – The trade name of your business must reflect the business activity you intend to carry out. The DED website provides a list of business names that are prohibited.
• Step 4: Apply for Initial Approval – After selecting your business activity, legal structure, and trade name, you must apply for initial approval from the DED. You can apply online; the approval usually takes two to three working days.
• Step 5: Lease Office Space – Once you have obtained the initial approval, you need to lease office space that meets the minimum office space requirement.
• Step 6: Obtain External Approvals – You must obtain external approvals from the relevant government entities before obtaining a business license. The approvals required to depend on the business activity you intend to undertake. For example, if you plan to operate a restaurant, you must obtain approvals from the Dubai Municipality and the Dubai Health Authority.
• Step 7: Sign the Memorandum of Association (MOA) – The MOA is a legal document that outlines the details of the partnership between you and your local partner. It includes the shareholding structure, management responsibilities, and profit-sharing arrangements.
• Step 8: Register the Company – Once you have obtained external approvals and signed the MOA, you can register your company with the DED. You must submit the necessary documents, including the MOA, lease agreement, and proof of external approvals.
• Step 9: Obtain a Business License – After registering your company with the DED, you must apply for a business license. You can apply online; the license usually takes seven to ten working days to process.

FAQs

What is a mainland business in the UAE?

A mainland business in the UAE is a company that is registered with the DED and operates in the local market. Mainland companies benefit from hassle-free trading within Dubai, the rest of the UAE, and internationally.

What are the requirements for starting a mainland business in the UAE?

To start a mainland business in the UAE, you need to meet the following requirements:

• Lease a business facility that meets the minimum office space requirement of at least 200 sq ft
• Obtain a business license from the DED
• Have a local partner who will own at least 51% of the company shares

What are the steps to start a mainland business in the UAE?

The steps to start a mainland business in the UAE are as follows:

• Choose a business activity
• Decide on the legal structure
• Select a trading name
• Apply for initial approval
• Lease office space
• Obtain external approvals
• Sign the MOA
• Register the company
• Obtain a business license

Conclusion

Setting up a mainland business in the UAE requires compliance with specific regulations and procedures set by the DED. This guide has provided a step-by-step process to help you navigate starting a mainland business in the UAE. By following these steps, you can start a successful business in the UAE and benefit from hassle-free trading within Dubai, the rest of the UAE, and internationally.