Mainland Company Formation in Dubai

by Zaara 26, Jun 2016

Mainland Company Formation in Dubai

Dubai has been home to entrepreneurs and investors from every corner of the world. Year on year, an increasing number of foreign investors and businesspeople flock to the Emirate to take benefit of its prime business environment.

There has never been a better time to set up a mainland company in Dubai than now. The pro-business laws, flexible regulatory environment, easy business approval, snd quick timeline has made mainland license in Dubai a favourite choice amongst the regions startup community and investors.

Business setup in Dubai mainland can be overwhelming for the uninitiated. It is not as simple as it is in the Free Zones. To begin with, you will need to manoeuvre all the legal and administrative procedures, apart from the skill to run a successful business in the UAE marketplace.

How to Start a Company in Dubai Mainland?

 

The steps to register a business in Dubai Mainland are quite simple and straightforward. The Department of Economic Department is the regulatory authority that takes care of the registration process.

1.Select your Business Activity

Before business setup in Dubai mainland, it’s important to note down the commercial activity so that you can apply for a Dubai mainland license in the next steps. The DED Dubai has mentioned more than 1000 activities in their list. Choose the activity depending on your business operations you want to take forward in UAE.

2.Register Trade Name

The name of the business set up in Mainland Dubai is approved by DED. The title of the business entity and the logo is required to be in line with the regulations set by DED for investors applying for registration and formation of business in mainland Dubai.

3.Get a local sponsor

The biggest difference in Dubai mainland business setup or in a free zone is in the ownership regulations. For the mainland, you will need an Emirati (UAE national) to be your local sponsor. This means the local sponsor will own 51% of the business shares while the remaining 49% ownership of the shares rests with the ex-pat.  These shareholders may not invest in your company but will still be the legal owner of the majority shares. However, the expatriate partner can be the managing partner of the company and hold 100% operational powers. Sponsors will not be involved with the day to day activities of the company.  In the case of professional firm formation, the ex-pat is allowed to own the firm 100% but a sponsor - officially called local service agent (LSA) is still a requirement. You can associate with a sponsor - for both local shareholder and local service agent on a mutually agreed annual fee.

4.Get Initial Approval

Once the trade name is registered, your advisor will apply for an initial approval certificate. The initial approval certificate is necessary for further processing of documentation and approval from other government bodies like – Ministry of Economy, Ministry of Interior, Ministry of Justice, and Civil Defence. Foreign investors are required to obtain a certificate of approval from the General Directorate of Residency and Foreigners’ Affairs before the initial approval. Initial approval does not permit an investor to start trading activities unless the commercial license is duly issued.

5.Register with the DED

The Department of Economic Development (DED) is the main regulatory body for forming companies in mainland Dubai. They are responsible for the economic growth and welfare in Dubai and they achieve this by developing economic policies and regulations, identifying strategic growth sectors and providing efficient services to local and international investors. They are the business registration and license issuing authority of the Dubai mainland company formation. They are also responsible for commercial compliance and consumer protection.

6.Get your Business Address Verified

The Dubai Municipality is required to verify your office address (the office space varies depending on the license type), and it is the tenant’s responsibility to ensure that the tenancy contract and Ejari (tenancy contract registration certificate) are in place before applying for a license.

The documents required for mainland business setup Dubai are –

  • In order to get MOE – Initial approval, the following documents are necessary. 
  • Registration forms
  • Trade name registration (proof)
  • Parent company’s MAA (Memorandum and Articles of Association)
  • Parent company’s Certificate of Incorporation 
  • Passport copy of the director
  • Parent company’s NOC
  • Local service agent – Naturalization book and passport (copy)
  • The local director of the branch requires a power of attorney. 
  • Board resolution from parent company
  • Setting up a new branch in Dubai requires the authorization of the management of the parent company.

United Arab Emirates (UAE) offers the best environment in the Gulf and it’s an amazing location for mainland company set up because of its strategic location, vibrant economic policies, and positive planning. Well-planned enterprising initiatives, various tax incentives, avoidance of double taxation, and abundance of natural resources like oil have enabled service, industry and trade sectors to flourish in the UAE, and have played a crucial role in making it a dynamic business hub.

If you aren’t sure of the processes of incorporating up a business or find it too tricky, it is always good to take the help of a local Dubai based business consultant to ensure the legal issues are handled carefully.

The above steps might still seem a bit difficult. But you can always rely on our business consultants at Commitbiz to guide you through them seamlessly.

To get in touch with Commitbiz, do contact us today.