More and more entrepreneurs want a Set up a company in Dubai. But often a simple company in a free trade zone is not enough and a mainland company in Dubai has to be established.
Here is the comprehensive guide to setting up a mainland company in Dubai.
Advantages Mainland vs. Freezone
In the comprehensive guide Dubai Mainland vs. Freezone the differences have already been described in detail. Here is a brief summary of the advantages and main differences to freezone companies in Dubai.
Legal capacity on site
The most important difference is the ability to do business locally in Dubai. With a mainland company you have the possibility to do business with other local companies in Dubai or the Emirates. This is not possible, or only to a limited extent, with freezone companies.
For example, anyone involved in real estate trading or brokerage needs a mainland company. The same applies to other services that are provided locally. Trade in various goods or physical sales outlets on site also require a Mainland company.
So if you want to do business in Dubai or the Emirates, you need a mainland company.
License diversity
The next point is directly related to the variety of licenses. Mainland companies usually have a higher variety of licenses to choose from. Depending on the activities, it is sometimes necessary to set up a mainland company.
Reputation
The next point is the higher reputation. As mainland companies are generally more strictly monitored, are more complex to set up and require a local office, their reputation is higher. This can sometimes be useful in practice when it comes to opening local bank accounts or applying for loans.
Internationally, it is often less important.
Procedure
The following is the procedure for setting up a mainland company in Dubai.
Object of the company / License
The first step is to determine the purpose of the company and find the appropriate license. You can do this at Dubai Department of Economy and TourismDET for short. There are basically four different license types:
- Industrial License - For industrial companies with manufacturing operations such as factories and manufactories
- Commercial License - For all trading companies that import / export.
- Professional License - For all service companies such as lawyers, notaries or consulting agencies.
- E-Trader License - For sole proprietorships or home businesses that sell products and goods online without a physical retail location.
There is also a dual license that allows you to work in the mainland and in the free zones at the same time.
Name
It is then crucial to choose the right name. This should suit the company and fulfill all legal requirements or not violate certain laws.
Pre Approval
With the name and the desired licenses, you can obtain a pre-approval. This pre-approval confirms that you basically meet the requirements.
Office
The next step is to buy or rent an office. Compared to freezone companies, it is crucial that the company has a physical office. A flexi office or desk in a coworking space is not enough.
If you don't need a physical office yourself, but only want to meet the requirements, you should consider the cheapest possible options. These usually start at €200 per month.
After you have rented the office, you will receive confirmation of this via the so-called EJARI directory. This directory regulates the real estate market in Dubai and is an official confirmation of the rent.
Submission of all documents
As soon as you EJARI certificate, this can be submitted together with the other documents. This is also where the license costs and official fees are paid. This officially completes the incorporation process. As a rule, you will receive the confirmation together with the founding documents within a few working days.
EID & VISA for the General Manager
An important intermediate step is the receipt of a Emirates ID and the Residency VISA for the general manager, i.e. the managing director. This is because he must have the bank account for the company and this is only possible with an active EID and VISA.
Once established, you can apply for an EIVSA to enter the country. This usually only takes a few working days. You enter the country with this EIVSA and get a stamp at passport control or have this document scanned electronically at passport control at the airport.
After successful entry, it is necessary to carry out a medical check on site. The short medical check usually only takes 10 minutes and you will receive the result in 1 hour.
You then apply for an Emirates ID (Emirates ID Application) and take this form to Biometrics. Here the fingerprints are taken once. The documents are then submitted again and the Emirates ID is sent to you within 3-5 days.
The whole process can be a bit challenging, which is why we always recommend hiring a service provider for this. We handle this together with our customers to guarantee a smooth and fast process.
Account opening
You need a bank account to actually be able to do business. Ideally, you should choose an account with a physical full-service bank in Dubai. As a rule, it is much easier to open accounts for mainland companies than for free zone companies.
There are some Banks in DubaiWe recommend different banks depending on your activity and turnover. These include, among others:
- WIO
- Mashreq
- FAB
- HSBC
Ideally, you should combine your personal account with your business account and open both at the same bank.
Tax registration
After incorporation, you are obliged to apply for a tax number within 60 days. Corporate registration has been mandatory since 2023.
Ongoing: Accounting & annual financial statements
It is also important to keep clean accounts on an ongoing basis, pay VAT quarterly and submit annual accounts at the end. Here, as in other countries, it is strongly recommended to have a Tax consultants in Dubai to commission.
Taxes
One important point is the topic of Taxes in Dubaiwhich also apply to mainland companies. Here is an overview of the most important tax rates for mainland entrepreneurs in Dubai:
- Mehrwertsteuer / VAT: This amounts to 5% and must be registered and paid from an (expected) turnover of over AED 375,000.
- Corporate income tax: The CIT is 9% on business profits with an allowance of around USD 100,000, which is not taxable. For small businesses under AED 3 million turnover, there is Small Business Relief, under which you continue to pay tax at 0%.
Costs
The costs for setting up a Mainland company vary and depend heavily on the selection and combination of licenses, but also on the number of VISAs that the company carries. As a rule, a mainland company formation starts at around €13,000 - €15,000.
FAQ
An overview of the most frequently asked questions about setting up a mainland company in Dubai.
How long does it take to set up a Mainland company?
Generally, the whole process takes 1-2 weeks to incorporate the company and another week to obtain the Emirates ID locally and open the bank accounts.
Is a Mainland company suitable for real estate trading?
Yes, a Mainland company is required to trade in real estate or to act as a broker in the form of an independent real estate agent.
However, it is not necessary for private buying and selling.
Summary
To summarize, the primary purpose of mainland companies in Dubai is to give you the opportunity to do business locally. This means that you can do business with other companies in Dubai, such as trading goods or providing services locally. Setting up a company usually takes a little longer than with a free zone and the entire project is also somewhat more expensive.
If you need support with a Company formation in Dubai you can contact us at any time.
