Mainland Company Registration in Dubai - Business Starting & Setup

The Emirate of Dubai is located on the Arabian Peninsula, in the south of the Persian Gulf. Among the seven emirates that make up the UAE, it is the most populated one and the second largest after Abu Dhabi.

There are two jurisdictions in Dubai for conducting business: Dubai Mainland (beyond the territorial borders of free zones), on the one hand, and more than 20 free zones, on the other. These two jurisdictions offer different advantages depending on the type and nature of business.

A mainland company is a company registered with the UAE Department of Economic Development (DED).

Mainland companies can take various legal forms that have specific requirements for registration procedures, operations and corporate structure.

• Must not be identical or similar to the name of an existing company.
• Can use Latin characters.

The Dubai mainland company registration procedure includes the following steps:

1. Select a company name to be checked for availability (at least three names).
2. Select the company structure (shareholders, manager, local agent/partner).
3. Select the type of licence (service, trading, industrial, or tourism).
4. Pay fees for services.
5. Provide the documents for the directors / shareholders / attorneys (either originals or notarized copies).
6. Choose an office space for the company and make a lease agreement.
7. Prepare and submit a set of documents for company registration, get the documents signed by the officers and shareholders of the company.
8. Receive the certificate of registration, articles and seal in the specified address.

The UAE does not have public company registries that would contain details of shareholders or directors. Information about companies can only be obtained at the request of a local court.

The register of shareholders and directors of the company is not accessible to third parties.

Every Dubai mainland company must have an office in the Emirate of Dubai.

The area of the premises for one licence must be at least 100 sq. feet.

Companies are required to have a common seal.

The redomiciliation of companies both to and from the UAE is permitted.

Types of licences: industrial, commercial, trading, professional, or tourism.

Shareholder – this can only be an individual. A professional-type Sole Proprietorship can be owned by an individual of any nationality. Previously, a foreign owner was required to have a Local Service Agent (LSA), to be able to register as Sole Proprietorship. Effective 1 April 2021, with the entry into force of Federal Decree Law No. 26/2020, repealing Article 329 of the UAE Federal Law No. 2 of 2015 on Commercial Companies, the requirement to have a local agent was cancelled. Foreign individuals can now own 100% of a mainland company, unless the mainland company operates in the sectors of “strategic importance” that are subject to additional regulation.

Manager – one, no requirements as to the residence of the manager.

There is no minimum capital requirement or requirement to pay up the capital for the registration of the entity.

The trade name must be in line with the commercial activity of the entity.

A Sole Proprietorship can have more than one branch. Each branch may undertake one of or all the activities included in the main business licence.

A Limited Liability Company (LLC) is a flexible form of enterprise that combines elements of a partnership and corporate structures.

An LLC must have 1 to 50 shareholders, each of whom is liable only to the extent of his or her share in the capital of the company.

The trade name of an LLC must derive from its activity or from the name of one or more members, and include the words “limited liability” and the size of the share capital.

An LLC can convert into any other legal form, with the exception of a public shareholding company.

Types of licences: industrial, commercial, trading, professional, or tourism.

Effective 1 June 2021, due to the implementation of Federal Decree Law No. 26/2020, foreign individuals can own 100% of a mainland company, unless the mainland company operates in the sectors of “strategic importance” that are subject to additional regulation.

The 100% foreign participation does not affect the existing procedures or licensing requirements, except that it is no longer necessary to have, or give a fixed quota to, a local partner.

There is no minimum capital requirement or requirement to pay up the capital for the registration of the entity.

An LLC must appoint one or more (up to 11) managers. The managers may be selected from the members. The managers have the authority to directly coordinate the activities of the company, subject to the restrictions imposed by its constitutive and other corporate documents.

An LLC can have more than one branch. Each branch may undertake one of or all the activities included in the main business licence.

A branch of a foreign company can perform professional activities and some commercial and industrial activities. Commercial and industrial activities would require an approval from the Department of Economy.

In addition to obtaining a licence from the Department, in order to operate in the UAE on a temporary or permanent basis, a branch of a foreign company must register with the UAE Chamber of Commerce. A revolving bank guarantee of AED 50 000 paid to the Ministry of Economy is necessary.

A branch of a foreign company is 100% owned by the parent company, operates under the same name and conducts the same business as the firm opening a branch in Dubai.

A requirement for a branch of a foreign company to have a local service agent was cancelled with effect from 1 April 2021.

The existing branches of foreign companies can take advantage of the new legal environment and remove the local agent from the licence and the registry. This requires a letter from the local agent confirming that there are no arrears in contributions and that he consents to the removal, after which such letter will need to be sent to the Department of Economic Development and the Ministry of Economy.

Foreign companies planning to open a branch in the UAE no longer need a local agent. However, it should be noted that all other registration and licensing requirements remain the same. In particular, the requirement to register with the Ministry of Economy and comply with all conditions persists.

The branch is not a separate legal entity, therefore the foreign company is 100% responsible for the activities of the branch and the branch’s proceeds will be taxed in the foreign company’s country of tax residence as the company’s own income.

A branch of a foreign company is created for an unlimited period.

The Board of Directors of a foreign company must appoint a manager to open the branch and to represent the company; there are no requirements as to the residence of the manager.

A branch of a free zone company can carry on commercial, industrial and professional business as long as the activity of the parent company is authorised in Dubai Mainland.

The requirement to appoint a local service agent if the parent company does not have a local shareholder or if the local shareholder of the parent company owns less than 51% of the shares has been cancelled as of 1 April 2021.

A company that is 100% owned by nationals of Gulf Cooperation Council (GCC) countries can open branches without seeking approval from the Ministry of Economy. No need to appoint a Local Service Agent.

A branch of a free zone company must be registered with the Ministry of Economy.

A revolving bank guarantee of AED 50 000 is necessary.

A branch must obtain all the necessary permits related to its activities. The penalty for non-compliance with this requirement is AED 100 000.

The name of the branch must be the same as the name of the parent company.

There is no minimum capital requirement.