- July 12, 2020
- Posted by: DBS Editorial Team
- Categories: Business Setup Services in Dubai, Dubai Business Services
An onshore company is basically a mainland company setup. Starting a mainland company in Dubai is authorized by the Department of Economic Development. Companies in Dubai mainland can carry out business activities in the UAE local market as well as outside the country. There are fewer restrictions imposed on businesses in Dubai mainland, compared to a free zone or an offshore company setup. Yet at the initial phase, business setup in Dubai mainland do need a list of authorizations depending on the business activity.
Starting a mainland company in Dubai requires the local sponsor, who must be a UAE national. A typical shareholding pattern for a Dubai mainland business setup is –
- UAE national sponsor – holds 51% shares
- Foreign shareholder(s) – owns the remaining 49% shares
For foreign entities the profit sharing under a Dubai mainland company setup may seem inequitable. However, if a mainland company setup is executed with the help of business setup consultants – then flexible legal arrangements and 100% control of the company can be provided to the foreign owner.
As a foreign entity, you can pay the UAE local sponsor a fixed annual fee, or percentage of sales or a percentage of the profits – as discussed and mutually agreed in the agreement. Paying fixed annual fees is the most popular way of operating a Dubai mainland company. This allows a foreign investor to retain 100% control of their business, whereas the UAE local sponsor acts as a sleeping partner without having any involvement in business activities or profit-sharing.
Did you know that several commercial entities prefer starting a mainland company in Dubai? Each year thousands of companies are registered in Dubai mainland, let’s find out why?
Advantages of Starting A Mainland Company in Dubai
- A starting a mainland company in Dubai has no currency limitations or monetary restrictions.
- Licensing and registrations are comparatively easier and stable.
- Mainland Companies are exempted from corporate tax.
- There is no minimum capital requirement for starting a mainland company in Dubai.
- Under a single Dubai mainland license, you can participate in a range of activities (those mentioned under the license)
- Mainland companies can trade with other mainland companies in Dubai and across the UAE. There is a flexibility to do business in any part of the country and beyond. This feature sets Dubai mainland companies apart from the free zones’ companies.
- Mainland companies also have more options to choose business activities, unlike the free zone ones. Dubai mainland businesses imply open broader economies that have much scope of diversity.
- Mainland companies can have their office location anywhere in Dubai. This enables them to not only trade with the local market efficiently, but also gives the possibility of starting a branch office in the UAE. Hence, offering the opportunity to build a strong presence in the UAE market.
- Also, there are no restrictions on the number of visas attained and simpler recruiting process.
- Mainland companies can take on governmental work, unlike the free zone companies. This is because free zone businesses are prohibited from undertaking government contracts; they can only take private commercial work. However, there is no such restriction on mainland companies.
- 100% repatriation of profits and capital are admissible for mainland companies.
- The process of registering a mainland company in Dubai is simple and hassle-free.
For certain business activities, starting a mainland company in Dubai is the only option that can make the business proceeding productive. If you would like to know more about Dubai mainland company formation or analyses the various costs of mainland company setup in Dubai, speak to our representatives today!
Book a free consultation with our business setup advisers to check out the various locations in Dubai mainland as well as across the UAE. Contact DBS – you can call us or drop in an enquiry and our representatives will get back to you at the earliest. Call us on +97145667485, WhatsApp +971551129344 or simply visit www.dubaibusinessservices.com to chat with us.