| DED | Dubai's Department of Economic Development is the registration office for mainland businesses in Dubai. |
| Types of licenses offered | Licenses for trade, industry, profession, and commerce are available. |
| Number of visas | The number of visas the corporation can issue is contingent upon the size of its office. |
| Location | Anywhere on the Dubai mainland may serve as the office's base. |
| Law | Law No. 2 of 2015, the Commercial Companies Law. |
| Ownership | Ownership of activities falling under the "positive list" is entirely foreign. For all other activities, the local sponsor must hold 51 percent of the LLC's shares. (Sole proprietorships are not covered by this.) |
| Paid-up capital | No need for paid-up capital. | Buy Now |
What is the Department of Economic Development?
The Department of Economic Development (DED) is in charge of granting companies trade permits on the Dubai mainland. The DED is specifically tasked with regulating economic activity for all firms operating outside of free zones, according to Law No. 13 of 2011. In order to guarantee economic expansion and the efficient execution of pertinent laws inside the Emirate of Dubai, the DED was founded. The DED strives to realize the government’s objective of diversifying and growing the economy.
We collaborate closely with the DED to advance the government’s economic objective. We streamline the business setup procedure for companies in Dubai’s mainland, hence offering hassle-free corporate services.
What is a mainland company?
A mainland business can operate anywhere in the United Arab Emirates as long as it has a license from the relevant Emirate’s DED. One of the most sought-after businesses in Dubai is a mainland corporation, often known as a “onshore” company.
What are the benefits of a mainland company in Dubai?
A mainland Dubai business can profit from the following:
- flexibility in carrying out commercial operations in both domestic and international markets.
- There is no cap on the quantity of visas granted to the business.
- Anywhere in Dubai’s mainland can serve as an office location.
- both visibility of the brand and accessibility.
- access to government tenders because free zone enterprises are generally not doing business with government departments.
Which are the Department of Economic Development’s primary licensing options?
Commercial License:
To conduct any kind of business in Dubai, a Limited Liability Company (LLC) is required in order to obtain a commercial license. It is the most popular commercial organization in Dubai for setting up mainland businesses.
Professional License:
For a mainland Dubai business, a professional license is usually granted based on the qualifications, experience, and services of the person or people running the enterprise. An LLC or a single establishment may be the corporate form. Except in certain instances, a foreign national may open the only establishment in his or her own name. It is not necessary to have a local sponsor as a shareholder because the lone establishment is effectively a single shareholder entity. Rather, a UAE national must work as a local service agent for the lone establishment.
Branch Office:
An international or local corporation can legally expand with a branch office license. It can only be allowed to conduct the parent company’s operations and has no independent legal identity. Establishing a branch office requires specific permission from the Ministry of Economy in the United Arab Emirates. A local service agent for a branch office must be chosen by a citizen of the United Arab Emirates.
Representative Office:
The main purpose of a representative office is to advertise the firm and increase the parent company’s reach. For a representative office to operate, a UAE national must be appointed as a local service agent.
Foreign investors had serious concerns about ownership of mainland/onshore enterprises in the United Arab Emirates, mainly since they had to collaborate with UAE locals. This partnership has a significant imbalance because international investors are only allowed to own up to 49% of the company shares, while Emirati partners are required to own at least 51% of the company shares. The foreign investors’ ability to autonomously manage the company’s activities was hindered by their minority share. The foreign investor was obliged to choose a local service agent (a UAE native) who would demand remuneration for his appointment without owning any firm shares, even in the case of sole establishment and civil companies. These features caused any international investor to second-guess opening a company in the mainland of Dubai.
In an effort to draw in international capital and bolster confidence among overseas investors, the United Arab Emirates modified the UAE Commercial Companies Law to allow foreign ownership of 100% of onshore companies that are incorporated there. The first day of June 2021 marked the implementation of this law.
For enterprises engaged in specific business activities listed in the UAE’s “positive list,” 100% foreign ownership is allowed. There are around 1,100 activities in various areas included in this list.
The Dubai Economy published rules outlining the steps for full ownership of mainland Dubai enterprises in response to this judgment. The following are the main conclusions from the Dubai Economy guidelines:
- 100% foreign ownership is encouraged for a variety of commercial and industrial operations under the Dubai Economy. Among the commercial activities include contracting, general trading, jewelry, luxury watches, gold, and pearls. The industrial operations include the manufacturing of metal, building materials, flooring, food, water, paint, and other products. Dubai’s list of positives also includes hospitality and education.
- If an Emirati partner wants to leave the partnership or if any mainland Dubai business wants to lower their shareholding, they can do so by revising the company paperwork and taking the appropriate legal actions.
- The procedures for granting licenses, incorporating, and renewing contracts for mainland Dubai enterprises remain unchanged notwithstanding the revision to the Commercial enterprises Law. The services are available through Dubai Economy’s current channels.
The legislation also makes no changes to the mainland Dubai companies’ current legal structures, which include limited liability companies (LLCs), sole establishments, and civil corporations.
The conversion of a Limited Liability Company (LLC) to a sole firm under the name of a foreigner is prohibited by the Dubai Economy rules. Nonetheless, the standards permit transferring the Limited Liability firm’s (LLC) license to a single, limited liability firm.
An Emirati agent is not necessary for a branch of a foreign corporation. Removed agents are another option.
Since business agencies are not subject to the business Companies Law, this change does not apply to them. Only UAE citizens are the owners of these.
The UAE as a whole and Dubai in particular have seen a huge influx of international investment as a result of this legal shift. Many mainland businesses are opening offices in Dubai, particularly because of its alluring tax-free advantages. Up to fifty-nine (59) Dubai onshore enterprises were incorporated in the first week alone.
A2z Setup Zone is a Dubai-based company formation specialist for the mainland. Please get in touch with us right now if you want to be a first mover and take advantage of all the advantages that a wholly owned Dubai mainland firm can provide.
The prices are influenced by a number of variables, including office space, business activity, and visa restrictions.
If their employees meet specific requirements, employers on the mainland can sponsor work permits, residency visas, and family visas for them.
Corporate Tax is imposed in the United Arab Emirates on mainland enterprises that have a taxable profit above AED 375,000. However, additional taxes like customs fees and VAT (5%) can be relevant based on your activities.
Under certain conditions, you are able to convert your free zone company to a mainland company. Consult a specialist in business setting for guidance on viability.
All mainland businesses must maintain correct accounting records and submit annually audited financial statements.
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