Setting up a business in mainland Dubai 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.
Read further to understand what it takes to start a business in the mainland:
- Get a local sponsor
The biggest difference in setting up a business in the mainland or in a free zone is in the ownership regulations. For 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 expat. These shareholders may not invest in your company but will still be a legal owner of 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 case of professional firm formation, the expat 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.
- 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 Business. They are also responsible for commercial compliance and consumer protection.
- 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.
If you aren’t sure of the processes of setting 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.
Here are the steps for the company formation in the Dubai mainland:
- Select the right business activity and legal type that suits your business
- Select a local partner or a local service agent
- Get the initial approval for name and business activity
- Get the MOA/Agreement notarized
- Choose the office space and get the contract of tenancy
- Obtain any other additional approval (if required)
- Final submission of for license
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.