Mainland Company Set-up
Obtaining a Mainland Company License presents an attractive opportunity for investors looking to start a new business with extensive trading capabilities and revenue potential. This article provides a comprehensive analysis of the mainland company formation process in the UAE, highlighting the benefits and potential challenges.
The UAE has continually updated its policies to foster economic growth, attracting more investors to establish new companies or branch offices. Setting up a company in the UAE is streamlined and straightforward, regardless of the emirate you choose. You can apply directly by visiting the Department of Economic Development in your chosen emirate.
Additionally, digital platforms allow for the acquisition of a commercial license and business establishment online, enabling you to submit necessary documents and receive your license promptly. To establish your company, you need to select an appropriate location, determine your business activity, and pay the required fees for your commercial license.
Al-Hisab Tax Consultancy, our experts provide tailored and effective solutions for a seamless business setup in Dubai and throughout the UAE.
What are the benefits of Choosing a Mainland License over a Free Zone License for Business Establishment?
Choosing a Mainland License for your business establishment in the UAE offers several key advantages compared to a Free Zone License:
- Broader Market Access: Mainland companies are permitted to operate anywhere in the UAE and can engage directly with the local market, which provides greater opportunities for business expansion and client acquisition.
- Government Contracts: Mainland businesses have the advantage of being eligible to bid for government contracts, which can be a significant source of revenue and growth.
- No Restrictions on Business Activities: Mainland licenses typically allow for a broader range of business activities and services compared to Free Zones, which may have specific restrictions or limitations.
- Full Ownership: Recent regulatory changes have made it possible for foreign investors to own 100% of their mainland company, removing previous restrictions and providing greater control over the business.
- Flexibility in Office Location: Mainland companies have the flexibility to choose any office location within the emirate, including commercial spaces outside of dedicated Free Zone areas.
- Ease of Expansion: Mainland businesses can easily expand their operations by opening additional branches or new business activities without the need for additional licenses, making growth and scaling more straightforward.
- Local Market Integration: Operating in the mainland allows for better integration into the local business environment, including direct engagement with UAE-based clients and partners.
Overall, choosing a Mainland License offers increased operational flexibility, market access, and potential for growth, making it a compelling option for many businesses looking to establish a presence in the UAE.
Types of Mainland Companies in UAE
In the UAE, mainland companies are categorized based on their business activities and legal structures. Here are the primary types of mainland companies:
- Limited Liability Company (LLC):
- Overview: This is the most common form of business entity in the UAE. It allows for a partnership between local and foreign investors.
- Ownership: In most cases, a UAE national must hold at least 51% of the shares, although recent regulations allow 100% foreign ownership in certain sectors.
- Liability: Shareholders’ liability is limited to their shares in the company.
- Sole Proprietorship:
- Overview: This type of business is owned and operated by a single individual.
- Ownership: The owner has full control and liability for the business.
- Liability: The owner is personally liable for all business debts and obligations.
- Public Joint-Stock Company (PJSC):
- Overview: This type is suitable for larger businesses seeking to raise capital by issuing shares to the public.
- Ownership: Shares can be publicly traded on the UAE stock exchange.
- Liability: Liability is limited to the number of shares held by shareholders.
- Private Joint-Stock Company:
- Overview: Like a public joint-stock company but not publicly traded. It is ideal for businesses looking for a more controlled shareholder base.
- Ownership: Shares are privately held and not available to the public.
- Liability: Shareholders’ liability is limited to their shares in the company.
- Branch of a Foreign Company:
- Overview: Allows foreign companies to establish a presence in the UAE without forming a new company.
- Ownership: The foreign parent company retains full ownership and control.
- Liability: The parent company is fully responsible for the branch’s liabilities.
- Representative Office:
- Overview: This is a non-commercial entity set up to promote the parent company’s products or services in the UAE. It cannot engage in direct commercial transactions.
- Ownership: Fully owned by the parent company.
- Liability: The parent company is liable for the actions of the representative’s office.
- Professional Services Company:
- Overview: Designed for individuals or firms offering professional services, such as consulting, legal, or medical services.
- Ownership: Can be 100% foreign owned but must be managed by professionals with relevant qualifications.
- Liability: Liability is limited to the business’s assets.
Each type of mainland company has its specific benefits and regulatory requirements, so selecting the right one depends on your business goals, ownership preferences, and operational needs.
Procedure to Setup Mainland Company
Registering a company in the UAE involves several steps that vary depending on the type of company and the emirate in which you plan to establish your business. Below is a general overview of the procedure for registering a company in the UAE:
- Define Your Business Activity
- Choose the Type of Company
- Reserve a Trade Name
- Obtain Initial Approval
- Prepare Legal Documents
- Office Lease Contract
- Apply for a Business License
- Submit Documentation
- Pay Fees and Obtain License
- Register with Relevant Authorities
Hisab’s experts are ready to assist you at every step of the business setup process, helping you reduce costs and streamline operations for greater ease and efficiency.