When it comes to establishing business in UAE investors have range of question and preferences regarding, Suitable Business option, finding an investor friendly suitable location, incentive scheme, expansion options etc.
The United Arab Emirates offers a diverse range of business prospects to foreign investors, including mainland and free zone opportunities. As a result, you are faced with the decision of whether to go to the free zone or the mainland
A Mainland company is a company registered in one of the seven emirates of UAE Department of Economic Development (DED). This means that if you choose to conduct business in Mainland, you will need to register a business entity with the DED, which will then provide you a business license to start doing business in Dubai/UAE. Mainland offers easier access to consumers, connectivity, flexibility and excellent infrastructure.
A mainland Company is as defined by the United Arab Emirates, a Mainland Firm is an inland corporation that can operate in the local market as well as outside of the country.
Mainland companies (can also be referred as Onshore Company) it can practice any Profession, Commercial, industrial, trading or tourism activity, However Some professional activities are excluded as per DED’s business regulations and other require approvals of authorities that regulate these activities.
In recent amendment UAE Ministry of Economy announced that, foreign investors and entrepreneurs can establish and fully own onshore (Mainland) company. the amended Commercial Companies Law into effect on June 1st, 2021.
As per the guidelines published by Dubai Economy on its website, 100% foreign ownership is available for more than 1,000 commercial and industrial activities excluding economic activities with a strategic impact, which are in seven sectors only.
WHY MAINLAND?
⦁ SCOPE & BUSINESS ACTIVITIES: UAE’s free zones only allow certain business activities to take place within them. further a free zone company can’t immediately expand their activities beyond their free zone licensed trading activity into other areas of the UAE market – to do so may require them to register as a private business.
⦁ Working with the Government: For working on the Government projects UAE has the huge potential. In year 2020 UAE has amended it code to attract more and more business to UAE, making it one of the stable and suitable country for diversifying the business, the UAE government is making huge investment on Infrastructure and social activities, to make it work.
⦁ To be Vocal about local: Perhaps the biggest advantage of setting up a UAE mainland company is that it allows you to open an office anywhere in the UAE. On the contrary, companies set up under a free zone licence are generally only permitted to operate within their chosen free zone.
⦁ For more visas: While most free zones make visa applications easy for entrepreneurs and their dependents, in some cases there are upper limits on the actual number of visas that can be issued. This is not the case with mainland companies. There are no restrictions on the number of visas that mainland business owners can apply for, allowing entrepreneurs unlimited scope for growth.
HOW TO REGISTER MAINLAND COMPANY IN UAE?
⦁ Select Business Activity: Select the business activity types from Trading/commercial, Consultancy, Professional or industrial. You can choose several activities within a one group.
⦁ 2. Select Trade Name: It is advisable to suggest three tradename options in order to preferences and name Should be clear. Trade Names that cannot be reserved: Name of country, Name of Continent, Famous regions and Towns, Color (blue, red etc.). Foreign words and short words will be charged extra fee of Dh2000 per year. At this stage it is required to submit all the documents of all partners (passport Visa / EID / NO C of UAE / Resident / Residential address).
⦁ Apply for Initial Approval in DED: Once the trade name confirms then the company can be formed and the company name is approved.
⦁ Prepare MOA & LSA agreement: DED will prepare the Memorandum of Association and Local Service agreement based on the information provided on the above stages.
⦁ Business Location: To complete the registration, process a Ejari (Lease contract) is required in main land. This refers to either business center/warehouse/office/showroom. It may be rented or a purchase.
⦁ Get Approvals: Some business activities require an additional / external approval from the other Government authorities such as a Civil Defence, Police, SIRA, MOH etc.
⦁ Map Structure: After the LSA and MOA are signed, all the payments and approval are made. License will be issued. (The license are based on the activity pursued by the Company).
WHAT ARE THE TYPES OF LICENSES ISSUED BY MAINLAND?
The license issued to an entity is based upon the industrial activity of a company, every license has its own set of rules and requirement.
The summary of the type of the license are detailed below:
Commercial License:
⦁ Where The Purpose of The Entity Is to Trade Within the Whole Region. Then the Investor applies for the commercial License. The requirement of the commercial license is as follows:
Professional License:
⦁ This type of entity is applicable for professional, service activities and consultancy. Setting up such type of a company is the best way a foreign investor can get 100% ownership in a UAE company registered outside Free Zones.
Industrial License:
⦁ Industrial licenses are required for establishing industrial or manufacturing activity in the UAE. With the industrial license, businessmen can assemble and process goods using raw materials that are local or imported. Economy Department states to be the main authority to issue industrial license. There might be necessary additional approvals from specific departments, ministries or Municipality. Which depends on the activity. Health Ministry is an authority that can provide authorization of medical business and institutions within the pharmaceutical segment. Such as operating in financial segment, require an approval from central bank of UAE.
Further when it comes to question that whether or not set up a business in Dubai it comes down to one thing, the type of business you want, the registration depends upon the requirement, and opportunities depend upon the ability to fulfil it.
This article is written by Team Anupama Tripathi & Associates, for the purpose of comment and knowledge, for more information you can connect with us#8800839633 or csanupamatripathi121@gmail.com
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