What does it cost to set up a mainland business in Dubai?

Dubai’s allure as an investment destination lies in its unique blend of visionary leadership, economic stability, and a dynamic business ecosystem. Fuelled by a commitment to innovation and diversification, the city has transformed into a thriving hub for trade, finance, tourism, and innovation. Investors from around the globe are drawn to Dubai’s tax-efficient policies, modern infrastructure, and business-friendly regulations, making it an ideal destination to launch new ventures or expand existing enterprises.

Among the many options available to investors, setting up a mainland business is a compelling option due to its versatile structure and extensive privileges. With the recent changes allowing 100% foreign ownership, mainland companies now grant investors complete control, eliminating the need for local sponsors. Embracing a diverse range of business activities and unrestricted market access, mainland businesses unlock unparalleled opportunities, enabling entrepreneurs to tap into both local markets and global trade networks.

What are the key features of a mainland company in Dubai?

A mainland company in Dubai refers to a business entity that is registered and licensed to operate within the UAE mainland and is subject to the UAE’s commercial laws and regulations. Mainland companies offer various advantages and features that make them popular choices for entrepreneurs and investors:

1. Wide market access: Mainland companies can conduct business anywhere in the UAE, providing access to the entire local market and various international trade opportunities.
2. 100% foreign ownership: Recent changes in UAE laws allow mainland companies to have 100% foreign ownership, eliminating the need for a local sponsor and providing investors with complete control.
3. Freedom to trade internationally: Mainland companies have the freedom to trade internationally without any restrictions, facilitating access to global markets and fostering international business partnerships.
4. Ability to bid for government contracts: Mainland companies are eligible to bid for government contracts, providing access to lucrative opportunities and projects.
5. Access to a diverse talent pool: Mainland companies can hire both local and expatriate professionals, ensuring access to a diverse and skilled workforce.
6. Strategic location: Dubai’s strategic location at the crossroads of global trade offers easy access to regional and international markets.
7. Potential for tax incentives: Though a federal corporate tax has been introduced, mainland companies may still benefit from various tax incentives and exemptions depending on their business activities.
8. Wide range of available corporate structures: There is generally a wider range of corporate structures available for a Dubai mainland company compared to a free zone company. In Dubai mainland, companies have more flexibility in choosing from various legal structures to suit their specific business needs and objectives.

What are the key considerations when setting up a mainland company in Dubai?

When setting up a mainland company in Dubai, several key considerations play a crucial role in ensuring a successful and compliant business establishment. These include:

1. Business activity and licensing: Determine the specific business activity or activities that the company will engage in and obtain the appropriate licences from the Department of Economic Development (DED). Ensuring that the chosen activities align with the company’s objectives and comply with the UAE’s laws and regulations is critical.
2. Office space requirement: the Dubai Economic Department (DED) mandates that mainland companies must lease or own a physical office space within Dubai. The specific office space requirements can vary depending on the type of licence and the nature of the business activity but in general, should be suitable for conducting the chosen business activity and in compliance with local guidelines and regulations.
3. Capital requirements: While there is no longer a specific minimum capital requirement for mainland companies, it is essential to have adequate capital to support the business’s initial operations and ongoing activities and capital requirements for certain business activities or licenses may still be subject to the discretion of the relevant authorities and may vary based on the nature of the business.
4. Legal structure: Choose the most suitable legal structure for the company, such as a limited liability company (LLC), sole establishment, or civil company, based on factors like liability, ownership, and the number of shareholders.
5. Registration process and costs: Familiarise yourself with the registration process, timelines, and associated costs for setting up a mainland company. Proper planning and budgeting are essential to ensure a smooth setup experience.
6. Compliance and regulations: Adhere to the UAE’s legal and regulatory requirements, including labour laws, visa and residency permits for employees, and any industry-specific regulations.
7. Business plan and strategy: Develop a comprehensive business plan that outlines your company’s objectives, target market, financial projections, and growth strategies. A well-thought-out plan can guide your decisions and attract potential investors or partners.
8. Banking and financial considerations: Set up a corporate bank account in Dubai to manage the company’s financial transactions. Research and choose a suitable bank that offers the services and support required for your business operations.
9. Employment and visa procedures: Understand the process for hiring employees and obtaining employment visas and labour cards for them. Comply with UAE labour laws and regulations to ensure smooth and legal employment procedures.

What business structures are available for a Dubai mainland company?

In mainland Dubai, businesses have various legal structures they can adopt based on their specific needs and requirements. The main business structures that can be used in a mainland Dubai company include:

1. Limited Liability Company (LLC): The LLC is one of the most popular business structures in Dubai. It requires a minimum of two and a maximum of 50 shareholders. Each shareholder’s liability is limited to their share in the company’s capital. This structure allows for greater flexibility and is well-suited for small and medium-sized enterprises (SMEs).
2. Public Joint Stock Company (PJSC): A PJSC is a publicly traded company that can be listed on the stock exchange. It is suitable for large-scale businesses with numerous shareholders and a substantial capital base. A PJSC must have a minimum of 10 founders and is subject to more stringent regulatory requirements.
3. Private Joint Stock Company (PrJSC): Similar to a PJSC, a PrJSC is designed for large-scale businesses, but it operates as a private company, not listed on the stock exchange. It requires a minimum of three founders.
4. Sole Establishment: This structure is suitable for individual entrepreneurs or professionals who want to operate their business under their name. The individual assumes unlimited liability for the company’s debts.
5. Civil Company: A civil company is suitable for professionals offering professional services, such as doctors, lawyers, engineers, and consultants. The liability of partners is usually limited to their share in the company.
6. Branch of a Foreign Company: Foreign companies can establish a branch in mainland Dubai to conduct business in the UAE. The branch is considered an extension of the parent company and does not have a separate legal identity.

Each business structure has its advantages and legal implications. The choice of the structure will depend on factors such as the nature of the business, the number of shareholders, the desired level of liability protection, and the long-term goals of the company.

What are the costs of setting up a mainland company in Dubai?

The costs of setting up a mainland company in Dubai can vary depending on several factors, including the type of business activity, the location, the size of the company, and the specific requirements of the company’s shareholders. The following are some of the common costs associated with setting up a mainland company in Dubai:

1. Trade name reservation: Before registering a mainland company, you need to reserve a trade name with the Department of Economic Development (DED). The cost for reserving a trade name typically ranges from AED 500 to AED 1,000.
2. Initial approval and licensing fees: To obtain initial approval from the DED and get the necessary licenses, there are fees that need to be paid, which can vary depending on the type of business activity. These fees usually range from AED 3,000 to AED 10,000.
3. Office space and establishment costs: Renting office space is a significant cost for any business setup. The cost of office space can vary depending on the location and size of the office. Additionally, there may be establishment costs, such as furnishing the office and obtaining necessary approvals, which can add to the expenses.
4. Visa and labour card costs: If you plan to hire employees for your mainland company, you will need to factor in the costs of obtaining employment visas and labour cards for them, which can range from AED 3,000 to AED 5,000 per employee.
5. Government fees and notarisation costs: There are various government fees and notarisation costs associated with the company registration process, shareholder agreements, and other legal documents. Some of the main ones include:

• Company registration fee: AED 10,000 to AED 15,000 (approximately) – This fee is paid to the Dubai Economic Department (DED) for registering the company.
• Licence fee: Varies based on the type of business activity and licence issued by the DED. The fee can range from a few thousand UAE Dirhams to several tens of thousands of UAE Dirhams, depending on the complexity and scope of the business activities.
• Notarisation and translation costs: These costs can range from AED 2,000 to AED 5,000 (approximately) and may include notarising the company’s Memorandum of Association (MOA) and other legal documents, as well as translating them into Arabic.

1. Miscellaneous costs: Other expenses may include PRO (Public Relations Officer) services, document translation fees, and any additional services required during the setup process.

How can The Knightsbridge Group help?

The Knightsbridge Group has over 20 years of experience in the domain of corporate structuring and wealth management. We have unparalleled knowledge of business practices and legal requirements in the UAE as well as an international network of contacts and a deep understanding of the needs of modern-day high net worth clients and international businesses.

We can help you set up a mainland company in Dubai, assisting with obtaining the necessary licences and permits, completing the required paperwork and liaising with government authorities on your behalf to streamline the setup process and ensure that your business meets all legal and regulatory compliance requirements.

If you need help with this or any other immigration, financial or corporate structuring issue, please don’t hesitate to contact us on info@kbgroup.ae and we will be happy to help.