If you’re thinking of setting up a business in Dubai, there are two kinds of licenses to consider: free zone and mainland. Depending on the type of business you want to run, its market, and its level of development, the Dubai free zone and mainland business license in Dubai offer different advantages, with their own location restrictions and set of legal regulations and rules.
In this article, we discuss whether a mainland business license in Dubai is right for your business.
Generally speaking, when setting up a business in Dubai, new entrepreneurs and SMEs choose a free zone because they allow 100% foreign ownership, are largely industry-specific, and offer certain advantages, like business incubators and advisory services. However, many business owners do consider a mainland business license in Dubai, as this allows for wider investment options as well as broader trading and service provisions within the UAE, regionally, and internationally.
Type of business. There are three kinds of mainland permits that cover a wide range of companies. If your business idea falls into any one of these categories, then this is a good starting point for considering the advantages of the mainland business license in Dubai. This, in turn, will direct which ministry regulations you will need to fulfill, the number of visas and health insurance you will need for employees, and the valid ‘no objections’ certificates that you will need prior to setting up shop.
The three types of mainland business license in Dubai include:
If a mainland business license in Dubai sounds like it could be right for you, also consider these requirements:
Local Partner: To obtain a mainland business license in Dubai, all expatriate business owners must have a local business partner, either an individual or company, who will own a 51% stake in the company. As a mainland business owner, a good way to organise your investment relationship is through a power of attorney, which can grant you complete control of business operations, in exchange for an annual fee paid out to the local sponsor.
Physical office space: Generally, mainland businesses must lease or purchase physical office spaces that measure a minimum of 200 square feet. The more office space you lease, the higher the number of employees you can staff. A good rule of thumb to follow is, that for every 100 square feet of office space, you can expand your staff by one individual.
A wider trading market: Businesses located on the mainland can conduct trade with other mainland businesses without the use of a local distributor or agent. At the same time, business owners with a mainland permit can open up branches or offices throughout the UAE. This is also permissible without the use of a local agent, allowing mainland business owners to optimise their investment relationship and take advantage of market expansion.
Work with the government: With a mainland business license in Dubai, you can tender for government projects, which are both more reliable, lucrative and prolific for a company looking to grow and profit. If your business’s services align with government requirements, then a mainland business license in Dubai is a viable option to consider for business setup, as this could open up strategies for long-term expansion.
Decisive Zone is a business setup company helping you find the best-suited solution when establishing a company in UAE. Decisive Zone will advise you on the corporate structure and jurisdiction to choose from, while covering all technical, administrative and financial aspects of UAE business setup.
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