August 17, 2022

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Mainland Company Formation in Dubai: Everything You Need to Know

4 min read
mainland company formation

Business Ventures empower the growth of a nation by supporting the economy and attracting many foreign investments. This is the reason why many countries are introducing policies and schemes to support such businesses. 

In that sense, mainland company formation in Dubai is one of the many prospects that entrepreneurs can look into. 

By definition, a mainland company in Dubai is officially licensed by the Department of Economic Development. These companies are eligible to practice industrial, trading, professional, and commercial business activities. 

There are many benefits to setting up a mainland company in Dubai, such as: 

Trade Restrictions 

Mainland company formation in Dubai gives you a broad scope of trade opportunities that ensures complete ownership and location flexibility. As a result, your company can be assured of a prosperous future by achieving professional ventures with minimal to no restrictions. This is one of the many reasons entrepreneurs are looking for a mainland company formation in Dubai. 

Better Flexibility 

A mainland company in Dubai has no location limits. You can offer services to the consumers or the government without any limits on location. Most importantly, the government allows you to conduct trade activities from anywhere within the UAE. The location flexibility may prove pivotal for businesses looking to expand their operations by opening multiple branches. 

Lucrative Deals 

Every year, The UAE government tenders big business contracts to mainland companies. For instance, the Abu Dhabi executive council approved an estimated $4.76 billion for government projects. These numbers will increase since more and more entrepreneurs are established each year. You can take advantage of these tenders by establishing a business venture and getting many lucrative deals. 

Ownership Control 

In recent years, the government has allowed 100% ownership to mainland companies in Dubai. Many overseas investors see it as a welcoming change to close more prospective deals. 100% ownership allows your company to operate without the need for any local partners. However, this ownership control is limited to only a few sectors. Oil and gas still require you to have a local partner. 

How to Form a Mainland Company in Dubai 

If you want to start your business venture in Dubai Mainland, you have to follow a few steps and protocols. 

Choose your Business Activity 

You can choose from over 2,000 business activities for your mainland company. These activities fall into different categories ranging from industrial and commercial to tourism and professional. 

Your chosen business activity will get you the appropriate license. Some activities will require you to have government approvals. 

Work on your Legal Form 

These legal forms describe your business and every other critical detail. There are many considerations in choosing a legal form for your business, such as nationality, number of shareholders, and stakeholding options. It is best for you to take several legal forms based on your business activity. For example, some common legal forms are Sole Proprietorships, Civil Companies, and Limited Liability Companies. 

Determine a Trade Name 

  • The UAE government has several guidelines for naming your business: 
  • The name must not contain any obscenities or offensive terms. 
  • You can only include your partner’s name in the license 
  • One cannot use family names for their license 
  • Only literal names are allowed. 
  • The name should reflect your business activity 
  • There should be no punctuation marks in the name 

Prepare Application and Agreement 

The shareholders have to sign legal agreements or Memorandum of Association for their legal form. They must sign these agreements in the Dubai courts with the presence of a public notary. 

Businesses are also required to draft a separate Memorandum of Association if their company’s legal structure includes public shareholding, one-person ownership, limited partnership, or civil activities. 

Establish Your Location 

All business ventures must have a physical address. You have to sign a legal tenancy contract and register with Ejari for an attestation contract. 

You can choose a physical space based on your business activity. The Dubai Government calculates the number of visas allowed based on the square feet of the office. You need to have a bigger office space to have multiple visas. Businesses will also have some flexibility on visa schemes if they have a separate branch. 

Acquire Your Approvals 

One important step for Mainland company formation in Dubai is getting special approvals from federal government authorities. The company should register with the Minister of Economy and acquire clearances from the Legal Affairs Department. This process can save you more time in the future. 

Collect the License 

After you complete all the above steps, you can collect and submit the documents to the officials. The DED will issue a payment voucher with details of legal fees. Businesses must pay these fees to get their trade license and start doing their business activities. 

Follow Post Formalities 

The period after getting your license is crucial for your business activities. The steps include: 

  • Getting a company stamp to do business 
  • Register with the ministry of immigration to obtain an establishment card. 
  • Opening a corporate bank account in the name of your company. 
  • Setting up a Wages Protection system to pay your employees 
  • Creating a separate accounting system for your company 

Working on your legal documents and framework. You have to draft employee contracts, and non-disclosure agreements, and maintain a separate website with terms and conditions for your business. 

In some sectors, businesses must also engage in branding activities to help potential customers obtain information. 

Summing Up 

You need a deep understanding of the legal process for your mainland company formation in Dubai. These intricate steps will allow you to navigate the legal and federal complexities that exist in the system. 

More importantly, you can overcome several roadblocks that could hinder your progress in setting up your business venture. 

In any case, it is better to work with a consultant or professional to take the stress out of company formation. These professionals can elaborate on the processes and help you understand the best solutions to successfully start your business in the Dubai Mainland. 

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