Mainland Company Setup in UAE

1. Mainland Company Setup in UAE March 17, 2020 Mainland Company Setup in UAE is advantageous to businesses as the United Arab Emirates offers a fast-growing economy, state-of-the-art infrastructure, safety, security, and a high-quality lifestyle. A mainland company is an onshore company licensed by the Department of Economic Development (DED) of the concerned emirate, which is permitted to do business in the local market as well as outside UAE without any restrictions. In the UAE, mainland companies are issued a license within each state of choice according to business activity. Federal Commercial Company Law No (8) of 1984 and its amendments by Federal Law No. 13 of 1988, 2011, and 2015 provides the necessary legal framework for the incorporation of a mainland company in the UAE. The latest amendments were made in 2015 as approved by the Federal National Council. The significant perk of mainland company setup in UAE is that it is free from territorial restrictions in carrying out your business activities. A mainland company Setup in UAE offers a significant advantage in comparison to the other structures such as free zone companies where you may have an operational restriction. A mainland company can establish its office in any part of the emirate where it is registered.

2. Mainland Company Formation in UAE Depending upon the type of business one wants to establish, he needs to evaluate and determine a location that is the best match for him based on his business activities and business objectives. Most commercial entities choose the mainland business setup. A Mainland Company Setup in UAE could be challenging if someone is not aware of the process and legislative step by step activities involved. It is always advisable to consult professionals for guiding you in setting up your mainland business. Depending upon the type of business one wants to establish, he needs to evaluate and determine a location that is the best match for him based on his business activities and business objectives. Most commercial entities choose the mainland business setup. Setting up a business in UAE is challenging if someone is not aware of the process and legislative step by step activities involved. It is always advisable to consult professionals for guiding you in setting up your mainland business. A specific requirement for mainland companies is the mandatory presence of a UAE national. A UAE national should either hold 51% of shares or act as a Local Service Agent. However, most of the professional activities can be registered with 100% foreign (Expat) ownership. For all matters related to government applications and liaising with government authorities, the signature of the local Partner/Service Agent is essential. The investor is solely authorized to manage business operations without any intervention of the local partner/Service Agent unless it is agreed otherwise. Licenses : To carry out any business activities in the mainland, an investor must obtain a license. There are three categories of licenses to choose from when it comes to doing business in the UAE mainland:  Commercial License : This category of license is a general license that is necessary to carry out all types of goods trading business activity.  Industrial License : Corporations that are into the manufacturing of goods or anything related to the industrial enterprise can go for an industrial license.  Professional license : Individuals who are professionals and provide skill-based servicers can go for a professional license. Say professional services offered by accountants, auditors and financial advisors, architectural consultants, lawyers, legal advisors, business consultants, etc.

3. Department of Economic Development (DED) issues these licenses. However, some categories and activities of the business require special approval from specific ministries or departments. Another key factor of mainland company setup is one can operate a variety of business activities within the mainland company. However, some business activities require prior approvals from the respective government departments and authorities. For example, real estate and developer-related licenses are regulated by RERA (Real Estate Regulatory Authority), while education allied business licenses are regulated by KHDA (Knowledge and Human Development Authority). Dubai Health Authority (DHA) regulates Hospitals, Clinics, and medical, allied business activity licenses. Salient Features of mainland company setup If you have to choose between an offshore company setup or mainland company setup, then mainland company setup is the best alternative. In Dubai, it is governed by the Dubai Department of Economic Development (DED), and it enables you to seize key benefits where you enjoy optimum freedom and flexibility to establish your business. Similarly, you can set up your business in other Emirates by registering your company with the respective authorities. It is a critical decision to identify the right location for your business. Taking a thoughtful and well-informed decision can adequately affect your company’s dynamics and future accomplishments. There are key success factors for every business to establish and grow in any location. The following are the key benefits that are unique for setting up a mainland Business. Key benefits of mainland company setup in UAE  Trade Freedom : Registering a mainland company opens up a door to trade in the whole of UAE. By establishing on the mainland, one can do any type of trade activity, without worrying about violating trade permissions as far as the business activities are legal. You may take the help of business setup consultants and advisors to help you form a company in the mainland.

4.  Freedom to trade internationally and expand your business : A mainland company offers you an opportunity to grow your business globally. For any business, it is vital to put a thought about the future of business. If you aim for International expansion, then the essential element is to penetrate the foreign market. To operate a business in a rapidly changing global business environment, flexibility is the vital element. Today’s business environment favors companies that are accustomed to resilience. When your product or services that is swiftly on-vague in a specific market, that calls for creating a chain of logistics to penetrate quickly in the market. A mainland License holder gets the freedom to grow and manage the business.  Freedom to recruit the right professionals : Every company has an objective to grow and succeed. Exploring mainland options means you can apply for unlimited visas. Usually, it is required to have 100 square feet of office space per visa. Thus, one can recruit employees from all over the world as per the relevant laws. Having a mainland Company also gives you the liberty to broaden your business branches across the UAE.  Diverse Business Opportunities : UAE offers a state of the art infrastructure and level playing field for businesses to grow and succeed. One can start with a few trade activities, and as he progresses further, he can add a few more products and services to grow and expand. A mainland license gives you wings to achieve your key business objectives since it offers smoother, faster, and less restrictive administrative processes as compared to free zones.  Opportunities to trade with UAE or GCC Government : Mainland registration has another potentially enticing feature that it gives the scope to tender bids for rewarding Government contracts. The UAE Government contract work is worth billions of dollars every year. If your business is offering services that match Government Project requirements, then you can think of participating in such projects. It enables to create a stronghold on long-term business networking and growth prospect.  No minimum capital requirement : Unlike other types, a mainland company is free from minimum capital requirements; thus, it makes it very affordable for entrepreneurs to set up a business in the mainland In addition to the above salient features, entrepreneurs prefer to set up business in the mainland due to the legal framework of the company that gives ease to establish and grow your business successfully. It also enables enterprises to breathe and nurture as one can expand by forming branches with minimal intervention. It gives you a wing to fly by permitting access to the local market in any part of the UAE, which enables you to create a business network and connect with direct and indirect customers and consumers.

5. Steps to start a mainland/offshore business :  Business Activity Identification : The first step in starting an onshore business is to identify the activities one intends to carry on. It becomes easy to finalize legal form and type of license once the activities are identified. There are more than 2000 business activities for one to choose from the allowed list of activities. One can select them based on his prior experience and business acumen. One can also engage in more than one business activity at a time.  Legal Form Selection : The legal form selection depends primarily on the business requirements. Additionally, the legal form is the basis for identifying applicable laws and regulations. In the UAE, an investor can select one of these legal forms: General partnership, Limited partnership, Limited liability company (LLC), Public joint-stock company (PJSC), Private joint-stock company (PrJSC), Civil company, Local company branch, GCC company branch, Foreign company branch, free zone company branch, Sole establishment, and Holding companies.  Trade Name Registration : A trade name distinguishes each business from others and also reiterates the nature and the form of the business. There are specific requirements as to the selection of a trade name. It must end with the business structure acronym like LLC, EST, PJSC, or PrJSC. It should be reflective of the business activity and the legal status of the company. It should not contain names of any religion, government authority, or name of an existing business. Further, it should not have been previously registered.  Obtaining initial approval : Initial approval is the next step after trade name registration. Here initial approval from UAE Government is obtained, indicating that it has no objection for the business you wish to establish in the country. However, it does not mean that the authority has granted you a license to run the business activity. To run your business activity full-fledge, you still have to complete other formalities.  Drafting Legal Documents : A business must draft its Memorandum of association (MoA) or a local service agent agreement (LSA). The MoA and LSA are again dependent on the legal form of business like Limited Partnership, Limited Liability Company, Public Stock Joint Company, or Private Joint Stock Company. This legal drafting procedure is carried out by UAE-based law firms, court, and notary public. The notary public or the court governs the Local Service Agent appointment process.  Business Location Selection : A mainland company must have a physical address for all the business activities it intends to carry out in UAE. The business premises and location compliance is governed by the emirate’s Department of Economic Development and land planning regulations of the local municipalities.  Obtaining additional approvals : To carry out certain business activities in UAE, one must have to get approvals from respective government entities. Following is the list of activities sorted by the ministry of UAE.

6. Ministry of Interior- Issues approvals for activities related to general transport like; driving schools, fire o equipment, alarm and safety systems, used-car dealer, used auto parts, car rental. Ministry of Justice-Issues approvals for Legal activities and legal consultancy o Local municipal department- Issues approval for Architectural and engineering affairs o Telecommunications Regulatory Authority- Issues approval for Telecommunication activities o Executive Council- Issues approval for Travel and tourism, general services, charter trading, ship, and o maritime agencies, car clubs, charter air transport, and foreign company branches Ministry of Economy – Issues approval for Insurance activities and insurance consultancy o Local health departments – Issues approval for Health-related activities o Supreme Petroleum Council – Issues approval for Onshore and offshore gas and oil-field services and o onshore and offshore oil drilling operations  Getting Business License Issued : On completion of the formalities mentioned above, the business license will be issued. The following is the list of documents that an investor has to produce while collecting the license: Initial approval receipt and previously-submitted documents o RERA Attested copy of the lease contract o Attested Copy of Memorandum of association (for all types of companies) o Approval Document from other government entities o An attested service agent contract o  Payment of Fees : One has to pay for a trade license within 30 days of receipt of the payment voucher. The application will be canceled if one fails to pay the fees in a stipulated period. Our Offerings : At N R Doshi and Partners, we are a team of highly professional and experienced individuals, who bring in their expertise to create world-class service organization. We offer professional and comprehensive consulting services for Company Formation in Dubai. We provide the entire gamut of consultation services in the area of Mainland Company Setup in UAE:  Identifying a local partner  Identifying a suitable office space  Carrying out all the incorporate procedures  Obtaining necessary approvals from authorities  Assistance in the bank account opening  Arranging a residence visa for investors

7.  Providing world-class support services FAQs : What are the benefits of mainland company in UAE? A mainland company setup in UAE is advantageous to businesses as they can do business globally and enjoy maximum freedom in the way they want to do their business. Further, you can acquire office space anywhere in the mainland as you are not geographically limited. A free zone company has a compulsion to do business inside the free zone and have limited flexibility. What is the corporate tax rate applicable to mainland companies in UAE? There is no corporate tax applicable to a mainland company in UAE. However, branches of foreign banks, gas and petrochemicals companies are supposed to pay tax. Can a UAE mainland company buy commercial property? Yes, a UAE mainland company can buy both residential and commercial property in the UAE. Can my local partner have a say in my business decisions? No, if you have drafted documents and structured the company in the right way. Our professionals ensure that your business interests stay protected, and we offer you the right advice on the structuring of your company so that you don’t get into trouble. How much time does it take to start a business in Dubai? Company formation in Dubai mainland takes less than 72 hours. However, you must have the right documents on hand. Being trusted partners and over 30 years of association with the Department of Economic Development in Dubai, we can establish businesses in UAE in just three days. Company formation in UAE free zones can take anywhere between 3-10 days. What are the different types of Business Licenses in UAE? There are three types of Business Licenses in the UAE: • Commercial License

8. • Industrial License • Professional License Can I register a company with 100% foreign ownership? Yes, if you are forming a professional company, then it is possible to have 100% foreign ownership.