Before applying for a DED license in Dubai, a business owner must first determine where to set up Mainland Dubai or a Free Zone. If you want to set up your company in Mainland Dubai, you will only be required to apply for a DED Dubai license. To start a 100 per cent owned business in Mainland Dubai, you need in-depth knowledge and understanding of the current policies and procedures set out by DED Dubai.
Top Considerations in DED Mainland Company Setup
Local Partner / Local Service Agent
Mainland Dubai companies need a UAE citizen who is either a local partner or a local service agent. The signature of a local partner/service agent is required in matters relating to government demands and liaising with the government authorities. The foreign investor will conduct business operations solely without any local partner/service agent’s involvement unless otherwise determined.
Special Approvals for Specialized Licences
A mainland corporation is licensed to carry out several business operations. Some business practices, however, are controlled by the relevant government authorities and may require prior authorisation. For instance, real estate licenses require Real Estate Regulatory Authority approval. Educational charges require Knowledge and Human Development Authority approval, hospitals/clinics/medical-related licenses require approval from the Dubai Health Authority, and so on.
Types of DED Licenses
- Industrial License for the production and sale of raw materials used in finished products
- Commercial License to trade without territorial limits on all legally tradable products.
- Professional license for persons or organisations engaged in consulting services, engineering services, accounting services, administrative services, education, training, etc
Starting a 100% foreign-owned DED Mainland Company
Setting up of a 100% foreign-owned DED Mainland company is possible under three circumstances:
1. Setting up a Professional Services Company
- Foreigners can own a specialised business entirely. Therefore, only a local service agent, who can either be an individual or a corporation, is needed by the professional company.
- The local service agent owns no shares in the business. However, a fixed annual fee for facilitating local government services is paid by the local service agent.
- An expat can also choose to receive an attorney's authority from the local service agent to conduct all government functions if appropriate.
2. Setting up a Branch of an Overseas Company
- If you already have an active business in your home country, the best solution to extend your business in the UAE while maintaining 100 percent ownership may be to start a branch company.
- As a shareholder, opening a branch business does not require a resident. So, much like a specialist agency, you can look for a local service agent. The branch must, however, participate in the same line of business as the parent company.
- If the parent company may participate in several operations, then all or a few in the UAE can be performed by the branch company.
3. Setting up a Branch of a Free Zone Company
- You can create a branch of your Free Zone Company through a Local Service Agent, just as in the case of a foreign unit.
- This setup’s effect is that you operate two companies in two UAE locations and pay the renewal fees twice. That is why this alternative is not considered to be sustainable by many SMEs.
- Alternatively, with a local distributor, you can opt to run the Free Zone company, which is cheaper than the cost of running two UAE organisations.
It is not simple and takes significant time to learn the prevailing DED regulations and procedures. So, it is best to obtain professional assistance. You can start a DED Mainland Company with 100% foreign ownership by experienced business setup consultants such as Commitbiz.
Commitbiz is a business consultancy organisation with experienced consultants in Dubai and the UAE with more than a decade of experience setting up companies. In providing services to small, large and medium businesses, our team has built their reputation. We have set up companies in Dubai Mainland for international organisations and business owners and understand this sector’s basics. For the development, registration, setup, etc., of businesses, we have licensed agents and provide full package solutions. To get more information on our services or jumpstart your business in Dubai Mainland, contact us today.