The Business Environment-Understanding Mainland Company Formation in UAE
What is Mainland in the UAE?
From business’ point of view, the UAE has been segregated into three different jurisdictions - Mainland or Onshore, Free Zone and Offshore. Mainland is essentially the total geographical area of land outside of a free zone area in the UAE.
The mainland area is regulated by the UAE’s Department of Economic Development (Abu Dhabi or Dubai DED) that legally allows private companies and their representatives to operate commercially in or from onshore. Companies in the mainland are onshore companies, with their licenses issued by the Department of Economic Development (DED) or any related department in other Emirates.
Until June 1, 2021, foreign business persons were required to give a minimum of 51% of the shares in their Onshore Company to one or more UAE nationals, being natural or legal persons.
The mainland area is regulated by the UAE’s Department of Economic Development (Abu Dhabi or Dubai DED) that legally allows private companies and their representatives to operate commercially in or from onshore. Companies in the mainland are onshore companies, with their licenses issued by the Department of Economic Development (DED) or any related department in other Emirates.
Until June 1, 2021, foreign business persons were required to give a minimum of 51% of the shares in their Onshore Company to one or more UAE nationals, being natural or legal persons.
According to the latest amendment done by the UAE cabinet done to the Commercial Companies Act, expats are now allowed to have a hundred per cent foreign ownership of companies in the UAE. The new changes were introduced by the Federal Decree-Law No. (26) of 2020 that amended some provisions of Federal Law No. (2) of 2015 on +commercial companies.
Clarifications on the procedures required for effecting the 100% ownership change in accordance with the Federal Decree-Law no. 26 of 2020
Clarifications on the procedures required for effecting the 100% ownership change in accordance with the Federal Decree-Law no. 26 of 2020
Why businesses are choosing UAE for their Mainland Company Formation?
100% Foreign Ownership Now
Ease of Doing Business
Competitiveness
Without the need of Emirati nationals for sponsorship, foreign investors in the UAE can now obtain up to 100 per cent of their mainland company
UAE is ranked 1st in the Arab World and 11th internationally in the “Ease of Doing Business Report” published by the World Bank that evaluated 190 countries across several factors
On the scale of competitiveness, the UAE holds #1 place worldwide across 23 indicators, including Government Decision and Global Talent. The World Competitiveness Yearbook (WCY) 2021 (published by the International Institute for Management Development (IMD) in Lausanne, Switzerland) keeps the UAE on #1 position
Long Term Value
Stable Economy
Excellent Arbitration System
Safety & Security
Government Spending & Support
The UAE is ranked №1 regionally and №7 globally in terms of long-term value creation of their resources among 62 other countries
The UAE has a robust economic outlook, moving away from the oil-driven economy by diversifying its income resources via the Vision 2021 strategy set forth by the ruler
The UAE laws outline the rights of every citizen and promote equality regardless of race, religion, gender, nationality or social position. It also has well-defined laws to protect the interest of business owners and their businesses
The UAE is known to be one of the 10 safest and most secure countries in the world. In an official survey conducted recently, over 96.1% of citizens said they feel safe and secure in the country
The UAE has injected over AED 300 billion to encourage economic growth via innovation initiatives. So far, over 100 initiatives are ongoing, all promoting a versatile digital economy
Types of Licences Available for Mainland Company Formation in the UAE
There are typically 3 types of business licences in the UAE to regulate more than 3000 business activities listed by the Free Zones and DED. You have to identify under which licence the chosen activity falls for your company formation in your favourite emirate.
You can choose:
You can choose:
Commercial Business Licence
If your mainland business involves trading of goods such as garments, textile, dry goods & any other consumer supplies and selling of certain services including brokerage and real-estate services.
The commercial business licence holder is allowed to import any type of goods they can think of, from ornaments and artifacts to packaging, food & electronics items and sell in the UAE, export for sale outside of the UAE, or trade solely within the UAE. You may obtain the list of permitted commercial business activities from the Department of Economic Development (DED) or from a business setup company/expert in the UAE.
Apart from import/export, general store, plumbing & sanitary contracting, radio, T.V. station, cinema theatre equipment installation & maintenance, rental services, general warehousing and trading in an automobile, medical gas, agricultural pesticides, used furniture fall under the commercial business category.
Note: A Foreign Branch / Representative Office falls under mainland company formation in the UAE and is set up to build your presence in the Middle East and UAE Market.
The commercial business licence holder is allowed to import any type of goods they can think of, from ornaments and artifacts to packaging, food & electronics items and sell in the UAE, export for sale outside of the UAE, or trade solely within the UAE. You may obtain the list of permitted commercial business activities from the Department of Economic Development (DED) or from a business setup company/expert in the UAE.
Apart from import/export, general store, plumbing & sanitary contracting, radio, T.V. station, cinema theatre equipment installation & maintenance, rental services, general warehousing and trading in an automobile, medical gas, agricultural pesticides, used furniture fall under the commercial business category.
Note: A Foreign Branch / Representative Office falls under mainland company formation in the UAE and is set up to build your presence in the Middle East and UAE Market.
Industrial Licence
If you wish to carry out large scale production and manufacturing processes. This licence also permits the packaging of products for sale. However, there are plenty of approvals from various authorities and institutions such as banks required. Manufacturing of fabrics & textile, uniforms, recycled paper products, plastic bottles & containers, mineral water bottling, recycling of used material, etc. are some of the examples of industrial activities that the UAE’s industrial licence allows the holder to perform. To qualify for an industrial licence in the UAE, one has to meet certain requirements, such as they must take on a physical premises – virtual offices are not permitted. You must also ensure that, along with your trade licence, you also hold a local industrial licence from the area in which your business operates. Any manufacturing unit requires compulsory licensing because of environmental, safety, and strategic considerations.
Professional Licence
if you want to legally work for or provide your services to any customer, client, or employer in the United Arab Emirates. With the professional licence you are allowed to engage in activities that are in line with your qualifications and area of expertise such as teaching/training, business/management consultancy, PRO, digital marketing, insurance, waste management & recycling consultancy, to name a few.
