📌Requirements and regulations for mainland businesses
Requirements and Regulations for Mainland Businesses in the UAE
Setting up a Mainland business in the UAE allows companies to operate freely across the entire UAE and engage in local trade without restrictions. However, starting a Mainland business requires compliance with specific regulations and procedures governed by UAE law. This guide outlines the key requirements and regulations that entrepreneurs need to follow when establishing a Mainland business.
1. Business Activity and Legal Structure
Before registering a Mainland business, the first step is to determine the business activity and select the appropriate legal structure. The Department of Economic Development (DED) classifies business activities, and choosing the correct one is essential for obtaining the proper licenses.
Common Legal Structures:
Sole Establishment
Suitable for individuals wishing to retain full control of their business.
Limited Liability Company (LLC)
The most common structure, offering limited liability and multiple shareholders.
Branch of a Foreign Company
A Mainland extension of an international company.
Civil Company
Used for professional services such as consultancy, law, or healthcare.
2. Local Sponsorship and Ownership
Recent reforms in UAE commercial law allow for 100% foreign ownership in most sectors. However, some strategic sectors still require:
A local sponsor holding 51% of shares
A Local Service Agent (LSA) for administrative representation (no ownership rights)
3. Trade Name Registration
Requirements:
Must not include offensive or religious terms
Should not conflict with existing business names
Must reflect the business activity
Process:
Submit trade name options to the DED for approval.
4. Office Space Requirements
All Mainland businesses must have a physical office. Requirements include:
Tenancy contract submission
Office space in compliance with municipal regulations
Tip: Business centers or co-working spaces can be a cost-effective alternative for startups.
5. Licensing and Approvals
Types of Licenses:
Commercial License
For trading and commercial activities
Industrial License
For manufacturing and industrial operations
Professional License
For service-oriented businesses like consulting, legal, etc.
Additional Approvals May Be Needed From:
Dubai Health Authority (DHA)
Real Estate Regulatory Agency (RERA)
Food Safety Department
6. Regulatory Compliance and Audits
Key Regulations:
Annual Financial Audits: Mandatory for LLCs
VAT Compliance: Required if revenue exceeds threshold (AED 375,000)
Labor Law Compliance: Employee benefits including health insurance, leave, and gratuity
7. Visa Eligibility and Sponsorship
Advantages:
Unlimited visa eligibility based on office space size
Sponsorship available for employees and their families
Common Guidelines:
1 visa per 8-10 sqm of office space
Investor Visa for business owners
Visa application, renewal, and cancellation managed by the company
8. Government Fees and Other Costs
Cost Breakdown:
Trade License Fees
Paid during initial setup and annual renewal
Sponsor/LSA Fees
If required for specific sectors or structures
Office Rental
Annual lease payment based on location/size
Visa Fees
For employees and investors
Note: Don’t forget to account for renewals and hidden compliance costs.
Conclusion
Setting up a Mainland business in the UAE offers unrestricted market access and broad operational flexibility. However, it also involves navigating a more complex regulatory framework compared to Freezone setups. Understanding the key requirements and following the correct procedures will help you stay compliant and maximize your business potential.
Need expert guidance on setting up your Mainland business in the UAE? Visit Sharkup.com to get personalized advice and support for a smooth, successful setup.
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