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 –
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.
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!
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