Mainland companies, also known as onshore companies, are licensed by the Department of Economic Development (DED) of the respective emirate. They have the liberty to engage in business activities throughout the UAE and internationally. Unlike free zone companies, Mainland Company Setup mainland companies are required to have a physical office space within the UAE. This requirement underscores the commitment to maintaining a tangible presence within the local market.
One of the primary benefits of setting up a mainland company is unrestricted market access. Mainland companies can conduct business throughout the UAE without any limitations, offering a significant advantage for those looking to tap into the local market. Additionally, these companies are eligible to bid for government contracts and projects, which are typically not accessible to free zone entities. This eligibility opens up lucrative opportunities for businesses looking to work on large-scale projects.
Another notable advantage is the flexibility in issuing visas. Mainland companies do not face restrictions on the number of visas that can be issued, which is particularly beneficial for businesses looking to scale their operations and hire a substantial workforce. The UAE's strategic location further enhances the appeal of mainland companies, serving as a gateway to the Middle East, Africa, and South Asia, thus providing unparalleled business opportunities on a global scale.
The process of setting up a mainland company begins with determining the business activity. This decision is crucial as it dictates the legal structure and licensing requirements. Common legal structures for mainland companies include Limited Liability Companies (LLCs), branches of foreign companies, sole proprietorships, and civil companies. Among these, the LLC is the most popular choice due to its flexibility and the limited liability protection it offers to shareholders.
Securing a local sponsor is another critical step in the setup process. For most business activities, a mainland company requires a local sponsor or service agent. The local sponsor, a UAE national, typically holds a 51% stake in the company, while the remaining 49% is held by the foreign investor. However, recent changes in regulations allow 100% foreign ownership for certain business activities, easing the requirements for international investors.
The next steps involve reserving a trade name that complies with the DED guidelines, obtaining initial approval for the business activities, and drafting the Memorandum of Association (MOA). The MOA, which outlines the company’s structure, shareholders, and operational guidelines, must be notarized by a public notary in the UAE. Securing office space is mandatory, with the lease agreement needing to be registered with the Ejari system.
Once these prerequisites are fulfilled, the necessary documents, including the MOA, lease agreement, and initial approval, are submitted to the DED. Upon approval, Low Cost Business Setup In Dubai the business license is issued, officially allowing the company to commence operations. It is also essential to register for Value Added Tax (VAT) with the Federal Tax Authority if the company’s annual turnover exceeds the mandatory registration threshold. Opening a corporate bank account is the final step in managing the company’s finances.
Compliance with local laws and regulations is paramount. This includes adhering to labor laws, obtaining necessary permits for specific activities, and maintaining accurate financial records. Regular audits and timely renewals of licenses and permits ensure that the business remains in good standing with regulatory authorities.
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