Start a business in the United Arab Emirates

Mainland company formation in Dubai

To start a new business especially in a new country is always an uneasy decision. All the countries have different regulations on how to register a business, what is important to have for it, a set of specific rules and laws which are mandatory to follow. To start a business in the United Arab Emirates has its specialties as well.

Usually, when people think about starting up a business in the UAE, the first thing and emirate coming to their mind and on the first Google search page is Dubai. Dubai is considered to be one of the most recognized business centers in the world, the biggest companies all over the world are bringing their offices and headquarters here.

Before the company registration in Dubai, it’s important to know that there are two types of company formation: Mainland company formation and Dubai free zone company formation. It’s also important to know the difference between them, cons and pros. Firstly let’s consider Dubai mainland company formation.

The first question you need to ask yourself - why exactly do you need mainland company setup in Dubai? Usually it can be explained territorially and by the nature of the business which can not be functional in the Free Zone.

A very important thing you need to be aware of before going for the mainland license Dubai is that this type of business registration requires a local sponsor. A local sponsor must be a UAE national.

By law, he is going to have 51% of company shares if your company has a trading activity. You can be in a managerial position and own 49% of the shares. Normally, you don’t need to look for a local sponsor by yourself, if you are going for a mainland company setup with a consultancy agency like Emirabiz, they provide a trusted local sponsor. Usually, local sponsor’s fee would vary around 10,000-15.000 AED depending on your business activity and the number of employees you plan to hire. This fee is an annual payment to be done to a local sponsor.

If you carry out a professional activity, the local sponsor will not have any shares in your firm. You will be a 100% owner while the UAE national will be registered as your agent. However, the annual fees to him will still remain.

In case, you are worried that a local sponsor is going to interfere in the business you can make a side agreement which gives proof that the local sponsor is not willing to take a step in your business.

Talking about mainland company setup Dubai, you should know that there are 2 types of licenses. As already mentioned - they are commercial and professional. All the business activities to be approved by the Dubai Department of Economic Development. Commercial type of license covers all the business activities related to trading. The professional license is wider: it can offer services, consultancies, etc.

The first step of mainland company formation in UAE is to get an initial approval (235 AED) and register a trade name of your entity (735 AED). If your business gets approved, you receive an initial approval letter, which can be used to prepare and attest MOA with your local sponsor. It needs to be signed at the UAE public notary. The next step is getting an office rent and a commercial/professional license (11,000 - 16,500 AED, depending on license type).

UAE mainland business setup is not that difficult as it might seem, the solution always comes from a need. Business setup consultants in Dubaiare always here to assist you professionally with setting up a company and related services.

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