The fact that you are on this page clearly indicates that you have decided Dubai is the place where you want to launch your next business endeavor, but you are confused between forming a corporation on the mainland or in a free zone. Selecting a location is like solving a puzzle! Everything will fall into place on its own, though, if you already know the advantages and disadvantages of each site and are clear about your short- and long-term objectives. Now, let’s explore the options you have for Dubai Mainland Company Formation.
Location Options for Business Setup in Dubai
Dubai, one of the seven emirates that make up the United Arab Emirates, is devoted to upholding a proactive, stable, and business-friendly climate. We have previously expended a great deal of ink explaining “why Dubai is among the world’s most business-worthy locations.” We’ll go right to the topic now: strategies for breaking into the UAE market! There are basically three options available to foreign investors that want to set up shop in Dubai:
- Establishing a Company in a Free Zone and on the Mainland
- Formation of Offshore Companies
Another strategy for breaking into the UAE market is to partner with a local company or work with an authorized distributor or agent that is already doing business there.
Know the Dubai Mainland
The portion of Dubai outside the free zones that is governed by the Department of Economic Development (DED) is known as the “onshore” or “Mainland” area. In other words, DED is the organization that issues the three different kinds of mainland trade licenses: the Professional/Services License, the Commercial License, and the Industrial License. In Dubai’s mainland, limited liability companies (LLCs) and branches/representatives of overseas companies are the most popular business structures.
Complete foreign ownership was not allowed with a mainland corporation until June 1, 2021. Fortunately, you can now own 100% of more than 2000+ commercial and industrial business activities under a mainland license. Because of the most recent modification to the UAE Commercial Companies Law. This is among the factors that make forming a mainland company in Dubai the most popular option among investors.
What made you decide on Mainland?
There are several advantages to having an onshore/mainland entity, including:
- With the help of a knowledgeable business formation specialist in Dubai like Adam Global, establishing a mainland corporation in Dubai is really simple.
- 100% foreign ownership may be possible unless there is a specific exemption that limits them. Prior to the recent changes made to the UAE CCL (Decree Law No. 26 of 2020), foreign entrepreneurs could only own up to 49% of their company.
- The necessity of appointing a local service agent for the registration of professional licenses, foreign company branches, free zone establishments, and sole proprietorships has been eliminated.
- The bearer of a mainland license is permitted to collaborate with mainland UAE businesses, clients located locally, and/or governmental organizations. The latter undoubtedly raises your company’s stature and reputation both domestically and abroad.
- As long as the commercial space is on land and in the appropriate emirate from whence the license is issued, there are no geographical constraints.
- The business license for the Dubai mainland allows the licensee to trade globally and increase their global footprint.
- You can expand your workforce by applying for an infinite number of visas with a mainland business license in Dubai, as long as you have the necessary warehouse or office space—usually 100 square feet per visa. The best aspect, though, is that you can bargain with the Dubai DED about whether or not recruiting remote workers will need you to hire additional office space.
- If branch development is one of your startup’s main objectives, a Dubai DED licence is your best option because it allows you to freely grow your company’s branches throughout Dubai and the United Arab Emirates.
- An onshore Dubai structure gives your company a lot more room to grow.
- Compared to free zone equivalents, the administrative process is quicker, easier, and less restrictive with a Dubai mainland license.
The most difficult decision to make when forming a company in Dubai is whether to incorporate on the mainland or in a free zone. To be honest, there isn’t a bad option when taking into account the unique requirements and goals of each company, the nature of the desired activity, the size of the operations, and, of course, the target audiences’ locations (whether within or outside the UAE).
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