The United Arab Emirates (UAE) is a land of unparalleled business opportunities, and establishing a mainland company in this dynamic environment can be a strategic move for both local and international entrepreneurs.
The UAE offers a thriving economy, a strategic location, and a business-friendly environment. This comprehensive guide will walk you through the steps and requirements for setting up a mainland company in the UAE, ensuring you’re well-prepared for success in this promising market.
Understanding the Mainland Company
A mainland company in the UAE, also known as an onshore company, allows entrepreneurs to conduct business and trade directly with the local market and internationally. These companies are governed by the UAE Commercial Companies Law, and they are registered with the Department of Economic Development (DED) in the respective emirate in which they operate.
Why Choose a Mainland Company in the UAE?
There are several compelling reasons to choose a mainland company structure in the UAE:
- Access to the Local Market: Mainland companies can trade directly with the local UAE market, tapping into the country’s diverse consumer base.
- No Obligation for Local Partners: With recent changes in UAE commercial law, there is no longer an obligatory requirement for local partners to hold more than 50% shares in a company. The decision on whether to involve a local partner is now at the discretion of the expatriate business owner.
- Broad Business Activities: Mainland companies have the flexibility to engage in a wide range of business activities without restrictions.
- Government Contracts: Mainland companies are eligible to participate in government contracts and projects.
- Foreign Ownership: The recent relaxation of local sponsorship requirements allows expatriate entrepreneurs to have greater control and ownership in their mainland companies, depending on the business activity.
Step-by-Step Guide to Establishing a Mainland Company
1. Choose a Business Activity
The first step is to identify the business activities you want to undertake. The UAE classifies business activities into three categories: commercial, professional, and industrial. It’s essential to choose the right activity that aligns with your business goals.
2. Reserve a Trade Name
Select a unique trade name for your company and ensure it’s not already registered by another entity. This name should be reflective of your business activities and brand.
3. Draft the Memorandum of Association
The Memorandum of Association (MOA) outlines the company’s structure, business activities, and other crucial details. It must be prepared and notarized by the local authorities.
4. Choose a Business Location
Select a physical office or workspace for your business within the UAE. The location should comply with local zoning regulations and licensing requirements.
5. Register with the Department of Economic Development (DED)
Submit your application for business registration with the relevant DED in the emirate where you intend to operate. This process may require specific documentation, including the MOA, trade name reservation, and ownership structure.
6. Obtain Initial Approval
Upon submitting your application, you’ll receive initial approval from the DED, allowing you to proceed with additional steps.
7. Rent an Office Space
As part of the requirements for mainland companies, you must lease an office space for your business. The office should be physically inspected and approved by local authorities.
8. Finalize Licensing and Approvals
Depending on your business activity, you may require additional approvals or licenses from relevant government agencies or ministries.
9. Get an Establishment Card and Labor Contracts
Obtain an establishment card, which is required for visa processing and employee labor contracts. You’ll need to draft labor contracts under UAE labor laws.
10. Register for VAT
If your business meets the threshold, you’ll need to register for Value Added Tax (VAT), which applies to most businesses in the UAE.
11. Open a Corporate Bank Account
Establish a corporate bank account in the UAE to manage your financial transactions and operations. Local banks offer a range of services and support for businesses.
12. Hire Employees
As your business grows, consider hiring employees to support your operations. Comply with UAE labor laws in terms of hiring, compensation, and working conditions.
Compliance and Ongoing Requirements
Operating a mainland company in the UAE comes with ongoing compliance requirements, including annual audits, financial reporting, and renewing licenses and permits. It’s crucial to stay updated on any regulatory changes and adhere to local laws and regulations to ensure the smooth operation of your business.
Conclusion
Establishing a mainland company in the UAE is a strategic move that offers access to a thriving market and international trade opportunities. With the recent changes in ownership regulations, the UAE has become even more appealing to foreign investors and entrepreneurs.
By following the steps outlined in this guide and maintaining compliance with local regulations, you can position your mainland company for success in this dynamic and lucrative market.
The UAE’s thriving economy, diverse consumer base, and supportive business environment make it an attractive destination for franchisees looking to thrive and succeed. Embrace this opportunity and embark on a journey to franchise success in the heart of the Middle East.
