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16 December, 2019

Types of Mainland Company Formation in Dubai

Doing business in Dubai is the perfect choice once you decide to expand or relocate your business to the UAE and particularly Dubai that is the trading hub in the MENA region. Vibrant, modern and welcoming city, with its geographical location and the business-friendly environment, it is the most preferred Emirate for multinational companies and SME’s to expand and set up businesses.
There are multiple company formation options in the country, and the mainland company formation is one of the most popular ones.

Through a Mainland company, you will freely operate throughout the Emirate with no territorial restrictions, however having an Emirati partner or agent, individual or corporate, holding at least 51% of the total equity is mandatory to operate inside Dubai and other Emirates in UAE.

This is exempt in the following cases:

  • Business activities that permit 100% Foreign Ownership
  • artnerships between GCC companies and UAE National
  • Business activities that permit 100% Local Ownership

A mainland company is a legal entity registered under the Dubai Economic Department (DED) and governed by the UAE commercial company- Federal Law No.2 of 2015- the New Commercial Company Law, (NCCL). Depending on the nature of the business activity, you may need to obtain external approvals from other local or federal authorities.

Mainland Company Setup and Categories in Dubai

The Department of Economic Development (DED) is the responsible government entity for issuing all licenses for business in the mainland of Dubai outside the free zones. These companies are often known as a “local company”.
Here are the different license categories:

– Professional license- Issued for service provider companies such as training, management consultancy, etc. Full or partial ownership is depending on the activity requirements. Certain activities are allowed 49% of foreign ownership, while others have full ownership. In this case the role of the Local Service Agent (individual or corporate) is limited to administration only.

– Industrial license- specific for manufacturing enterprises and industrial companies. Valid for a definite period, the industrial trade license obligates the company to have a leased or owned physical warehouse inside the country and manufacturing facilities.

– Commercial license- Adequate for businesses involving trading or retail activities ( buying and selling of goods, import and export activities, real estate service, logistics, travel & tourism, auto vehicle rental business, etc). A maximum of 10 activities per license are allowed.

Types of Mainland Company Formations recognized in Dubai

  • Sole Establishment Dubai- a business owned by an individual, not a company.
  • Limited Liability Company Dubai- an adaptable type of enterprise that mixes elements of partnership and corporate structures
  • Branch of Foreign Company Dubai- can carry out professional activities additional to some commercial and industrial activities.
  • Representative Office- It isn’t a business structure in its own right but it’s a business activity that a branch can conduct. It requires a Local Service Agent (LSA), who can be a UAE National or a company owned by at least one UAE Nationals.
  • Civil Company- It is typically a business partnership for professionals such as doctors, lawyers, engineers, and accountants.
  • If you are looking for a new partner to succeed, CBS is the right door to knock on. As a key player in the UAE corporate services industry, widely recognized by both government and private sectors for our professionalism and efficiency, we pride ourselves to be specialized in offering you the right solutions for Company Formation in Dubai or help expand your business irrespective of business type and sector in the UAE.

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