Dubai has never failed to provide productive options for entrepreneurs and investors to establish and grow enterprises. Additionally, it has expanded its economy to international lands as well in order to provide worldwide business opportunities in a variety of sectors. Moreover, the incredible support services by the UAE government open a plethora of benefits to new, established, as well as growing businesses. However, there are some unique laws when it comes to mainland company formation in Dubai, especially when it involves the inclusion of a local sponsor.
There are three main jurisdictions in Dubai, UAE that offers business prospects to companies – Free zone, Off-shore, and Mainland. While all three jurisdictions have their own set of prerequisites and fundamentals, the consideration of where to set up a company is a crucial decision. Even though mainland company formation in Dubai provides flexibility and freedom to foreign investors to run their businesses in the UAE, sharing partnerships can be a major put-off.
To put some light on the issue, this article will explain the benefits and procedures of setting up a mainland company in UAE, and also how you can operate freely in Dubai without a local sponsor.
Mainland Company Formation in Dubai
Dubai is a strategic location with a plethora of options for foreign businesses to grow and flourish. Out of all of them, the various setup options that Dubai offers are quite interesting. These include Freezone company formation, Offshore company formation, and Mainland company formation.
A freezone company is established within the emirate’s defined jurisdiction and is supervised by the respective freezone authorities. In addition, freezone allows companies to conduct business within the same free zone. On the other hand, offshore companies are those entities that are established outside their registered jurisdiction.
Mainland companies, also known as onshore companies, can operate freely in the local market as well as international markets. Apart from that, the Department of Economic Development (DED) of the respective emirate controls and regulates the undertakings of mainland companies.
Advantages of Mainland company formation
Mainland company formation in Dubai demands the involvement of a local sponsor, individual or corporate, who will hold the majority of company shares. This particular rule in mainland company formation turns out to be a tedious task for company owners and investors. However, the entrepreneurs still find mainland company set up as an appealing prospect due to following reasons:
- The registration process for mainland company formation is easy and quick.
- There is no requirement of minimum paid-up share capital for forming a business in Dubai Mainland.
- Mainland allows companies to operate in both private and public sectors.
- The owners of mainland companies are relieved from corporate and income taxes.
- Dubai Mainland enables diversifying their companies into new industries.
- Mainland companies can open offices and conduct business anywhere in the United Arab Emirates.
- Companies can avail the opportunity of collaborating and working with the UAE government.
- Dubai’s mainland business setup provides the freedom to trade in Dubai and the UAE.
- Business owners in Mainland have the flexibility to penetrate international markets or expand their business internationally.
Mainland Company Formation in Dubai without a local sponsor
While starting a business in the UAE, foreign investors have some specific restrictions that they have to abide by. They can initiate mainland company formation in Dubai using a variety of legal frameworks, which may include a Limited Liability Company or a Partnership Company. In both the cases, they have to choose a UAE sponsor or service agent who can invest in their firm and aid in company establishment.
On the other hand, for a freezone company setup, there is no necessity for a local sponsor. In addition, it allows 100% ownership of the company and the owners also enjoy the benefit of 100% profit repatriation as well as several exemptions and refunds. However, freezone companies are not allowed to trade beyond their respective freezone market.
So, in spite of all this, is it possible for a Dubai mainland company to establish without a local sponsor?
The answer is yes!
The aspiring investors and entrepreneurs can go for a civil or professional services company in Dubai Mainland and seek a Professional Services license for their entities.
Professional Services License for Mainland company in UAE
Obtaining a professional license Dubai can easily pave a way for expats and foreign nationals to own a 100% stake in their company. Professionals such as doctors, accountants, engineers, lawyers, consultants, etc. fit into this kind of business setup category.
However, there are some requirements that the Mainland company owners must fulfill before applying for a professional service license. These are –
- Companies in Dubai Mainland that hold professional licenses can engage only in professional or consultancy services.
- Individuals, or individual partners in the case of partnership firms, must indulge in the same professional practice.
- Individuals and partners applying for a professional license must have the necessary professional qualifications.
You may like it: Easiest Way to do Company Setup in the UAE
Advantages of acquiring a Professional License
A professional license holder can enjoy the following benefits while mainland company formation in Dubai :
- Full ownership of the mainland company rests with the investor.
- The company can engage in secure commercial deals with the DED.
- Business owners are free to apply for labor quotas, visas, licenses, and much more.
- Investors can choose from a variety of professional services.
- The company can seek license renewal at an affordable cost.
- The owner is exempted from corporate as well as income taxes.
- The business owner gets the opportunity to engage with several clients and new markets.
Although mainland companies with a professional license are relieved from involving a local sponsor, they still need to appoint a local service representative to execute the legal formalities of company formation. For example, they will initiate a dialogue, register official papers with several government authorities, and act as an intermediary between the firm and various legal entities.
Other than obtaining a fixed annual fee for the service provided, the agent plays no active role in the company. They will also not be responsible for any of the company’s liabilities.
Steps to acquire a Professional License
- Create a detailed overview of the business operations
- Secure a business name
- Hire a local service representative to handle all of the legal paperwork
- Obtain first clearance from the DED
- Present all the required documents to the DED for approval
- Get final approval and confirmation
- Obtain the professional service license
Summing up
Due to an excellent tax system, vibrant working culture, and brilliant business opportunities, Dubai is an ideal location for any entrepreneur to establish a firm. Even though setting up a mainland company in UAE has its own pluses, including a local sponsor can become a major put-off for the investors. Hence, to avoid this stress, foreign investors and entrepreneurs can set up a company delivering professional services and equally procure a professional services license. This license permits them to own 100% stakes of the company and in addition, gives them the benefits of a sole proprietorship.
Mainland company formation in Dubai is easy and hassle-free when you work with reputed and well-versed business consultants. Shuraa Business Setup provides the finest services and of forming a Mainland Company in the UAE. We thrive to fulfill the whole range of procedures. Also, our connections with UAE ministries and legal authorities enable us to get quick government clearances for our clients.
Furthermore, we assist our clients in establishing commercial as well as professional businesses in the UAE, with all legal and judicial formalities as per UAE laws. Contact us today at +918010990022 or chat with us at +91 73038 78183. You can also email us at info@shuraa.in and get a free consultation.