Business Setup Structure in UAE
United Arab Emirates permits investors to open an onshore or offshore company within its territory. An onshore company is an entity incorporated in the specific country and its sole purpose is to conduct business in that particular jurisdiction while an offshore company allows you to carry out activity outside the registered country.
For company set up in UAE, the country has divided its business region into two Zones i.e., Free Zone or Mainland.
Offshore Company Incorporation in UAE
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Business Setup in UAE
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What is Mainland Company?
Each emirate’s Department of Economic Development (DED) issues licenses and oversees operations on the mainland. Mainland companies can conduct business in the UAE local market and outside the UAE without any restrictions
The mainland company is a company registered in one of the UAE DED (Department of Economic Development) unlike a Free Zone company which is registered with the concerned Free Zone Authority. This means that if you choose to do business in the UAE mainland, you need to register a business entity with DED, which will then provide you with a business license to do business in the UAE.
Industrial, commercial, commercial, professional and tourist activities are covered in the mainland businesses. However, DED business regulations do not cover certain professional activities, while other professional activities require the approval of the authorities that supervise these activities.
DED allows Expatriates to invest in a Limited Liability Company where local citizen of the United Arab Emirates can have 51% ownership of the company, meaning that the expatriates will have 49% of the shares or they can choose to establish a sole proprietorship so that they can own 100% of the shares. However, certain business activities are only available for UAE citizens.
Types of Mainland Companies
Most Common Type of Mainland Companies include:
Commercial LLC Company
This is the most frequent type of company set up in the UAE, it is preferred when the entity’s objective is to trade across the entire region. Please note that in the UAE, 100 percent foreign ownership of this company type is not permissible. The Investor can only own 49% of the shares, the other 51% will belong to UAE National. Some of the advantages of opening an LLC company in UAE mainland are:
An LLC can participate in any type of business except insurance, banking, and investment.
An LLC can lawfully trade anywhere in the UAE, including the Free Zones and there are no restrictions on how many visas can be obtained; there are no restrictions on how many visas can be obtained.
Sole Proprietorship
As Free Zones in UAE provide 100% Ownership to the foreign investors, you can now open a solely established company in UAE Mainland as well with full ownership. However, activities allowed in this type of business license may be limited. Professional licenses, service activities, and consulting businesses fall under this category.
There is no requirement for a minimum amount of capital.
The UAE National will function as an agent with 0% ownership; the company will be set up through a government service agency with only one shareholder; and there will be no corporate or income taxes.
Civil Company:
Another type of 100% foreign owned company is known as a civil compare where you can add up to 3 shareholders and a local UAE service agent. Some features of Civil License are that the local service agent owns 0% of the commercial shares and profits, while the foreign partner or company owns 100% of the commercial shares. The main task of the local service agent is to act as a signatory to complete all government-related tasks and he will have no administrative power, only the right to obtain the annual fee of government services. For some activities, a local service agent is required Professional qualifications.
Some other legal types include a Holding Company, A Partnership Company, Branch of an Existing LLC Company, Branch of a foreign Company, Joint Stock Company etc.
Business Activities in Mainland:
If you want to open a company in UAE Mainland, you will have multifarious business activities to choose from. Ranging from an Industrial, Shipping, Trading Company, Professional Consultancy Business, Distribution, Logistics, Warehouses, Food Deliveries, Restaurants to opening an E – Commerce Business, you can have it all with DED Licenses.
Business Services in Dubai Mainland:
Dubai Economy (Department of Economic Development) is a government agency charged with formulating and promoting the economic agenda of the Emirate of Dubai, UAE. The Dubai economy supports Dubai’s structural transformation into a diversified and innovative service-oriented economy, which aims to improve the business environment and accelerate productivity growth. The steps to open a company in Dubai Mainland are similar to establishing a company in Abu Dhabi, however some rules and regulations may differ.
Ready to get started? Contact us!
For more information on how to set up a business in these Emirates, you can email our main office FZ Businessman Services at info@fztyping.ae or call our landline number +97167449990 for assistance.