Mainland Company Formation in the UAE

The United Arab Emirates offers a vibrant and stable economy, making it a top destination for entrepreneurs and investors from around the world. The government actively encourages new businesses with its pro-investment policies and world-class infrastructure. For anyone looking to open a company in the UAE, understanding the different setup options is the first step. One of the most powerful and flexible options is a mainland company.

A Mainland company formation is the process of registering a business directly with the Department of Economic Development (DED) or a related authority in one of the UAE's seven emirates. A business registered on the mainland is also known as an "onshore" company. This type of registration allows a company to trade and operate freely across the entire UAE market with broad access.

This is different from a free zone company, which is generally limited to operating within its specific economic zone. A UAE mainland company has the unique advantage of being able to work directly with both private sector clients and government entities anywhere in the country. This makes it the ideal choice for businesses that want to fully integrate into the local economy.

This guide provides a detailed and clear roadmap for Mainland company formation in the UAE. The goal is to give entrepreneurs the confidence and knowledge to navigate their business setup journey successfully. It is especially helpful for anyone wondering how to start a business in the UAE as a foreigner.

The UAE mainland offers several legal structures to suit different business needs. Choosing the right one is a crucial step in the Mainland company setup in the UAE.

• Limited Liability Company

A Limited Liability Company (LLC) is the most popular and flexible business structure in the UAE mainland. An LLC is a separate legal entity from its owners, which means the shareholders’ personal assets are protected from business debts. You can have multiple shareholders, and the company can carry out a wide range of commercial activities. This structure suits most small to medium-sized businesses and allows smooth operations across all emirates.

• Sole Establishment (Sole Proprietorship)

A Sole Establishment in the UAE is owned by a single individual who is fully responsible for the company’s profits and liabilities. This type is ideal for small businesses and professional services. Certain professional Sole Establishments can be 100% foreign-owned, depending on the activity. The owner manages everything, making it simple to set up and operate. However, personal liability is unlimited, so the owner must manage risks carefully.

• Civil Company

A Civil Company is a partnership structure designed for professionals in recognized fields such as medicine, law, engineering, or consulting. It allows multiple partners to provide their professional services under a single entity. Partners are usually responsible for liabilities based on their share in the company. In some cases, foreign investors can own 100% of the company, but this depends on the profession and local regulations. Civil Companies are ideal for professional service businesses that need a specialized legal structure.

• Branch of a Foreign or Local Company

A branch is an extension of an existing foreign or local company. It is not a separate legal entity, which means it is legally considered part of the parent company. A branch can carry out the same business activities as the parent and operate across the UAE mainland. However, some approvals, licenses, or local requirements may differ from a regular mainland company. A branch is a good option for established companies that want to expand into the UAE without creating a new legal entity.   

If you want to explore all mainland company types in detail, read our blog on Types of Company Formation in Dubai. 

A common point of confusion is the term "mainland." There is not just one mainland. Instead, the "mainland" refers to the onshore jurisdiction within each of the UAE's seven emirates. Each emirate acts as its own mainland, with its own Department of Economic Development (DED) or a similar governing body.

Each of the seven emirates has its own mainland (onshore) jurisdiction, managed by its DED or equivalent economic department

• Abu Dhabi

The capital of the UAE, with a focus on finance, energy, and large-scale industry. An Abu Dhabi company formation is a strategic choice for many large enterprises. Many international companies, especially in oil, gas, renewable energy, and large infrastructure projects, choose Abu Dhabi for its strategic location and business-friendly environment. For example, a renewable energy consultancy or a financial advisory firm targeting government contracts will benefit from setting up in Abu Dhabi.

• Dubai

Dubai is the UAE’s commercial and tourism hub. It is famous for its world-class infrastructure, free zones, and global connectivity. Many entrepreneurs choose to start a company in Dubai for trading, tech startups, tourism services, and retail businesses. A Dubai-based e-commerce company, for instance, can easily reach clients both locally and internationally, while also participating in trade fairs, networking events, and government contracts.

• Sharjah

Sharjah is known for its cultural, educational, and industrial focus. It is ideal for businesses in manufacturing, education services, printing, and cultural initiatives. Sharjah provides a balance of lower setup costs and strong industrial support. For example, a small-scale manufacturing unit or a training institute may prefer Sharjah for affordable rents and easy regulatory compliance.

• Ajman

Ajman is popular for cost-effective business setup options and a growing industrial sector. Startups and small businesses often choose Ajman to save on office space and licensing fees. For example, a logistics company or a small trading firm can set up quickly in Ajman while benefiting from proximity to Dubai and Sharjah for market access.

• Umm Al Quwain

Umm Al Quwain is a smaller, quieter emirate with a peaceful and affordable business environment. It is ideal for businesses that want low operating costs and less competition. For instance, a boutique tourism agency, small trading company, or specialized service provider may prefer Umm Al Quwain for its simplicity and cost efficiency.

• Ras Al Khaimah

Ras Al Khaimah (RAK) is a major industrial and tourism hub. It attracts companies involved in manufacturing, logistics, and hospitality. For example, a furniture manufacturer or a hotel group may benefit from RAK’s industrial zones, port facilities, and tax-friendly environment. RAK also offers incentives like flexible office options and streamlined approvals for industrial setups.

• Fujairah

Fujairah is located on the East Coast of the UAE and is known for its strategic port and trade access. Businesses focusing on shipping, logistics, import-export, and maritime activities often choose Fujairah. For example, a shipping agency or import-export trading company can use Fujairah Port for direct access to international trade routes while enjoying lower operational costs than other emirates.  

Note: Each emirate has its own fees, rules, and requirements, which may vary slightly depending on the business activity and legal structure.

The registration process for a Mainland company formation is streamlined and clear. It involves several key steps managed by the DED of the chosen emirate.

1. Choose the Business Activity and Legal Form: First, an entrepreneur must decide on the specific business activities the company will conduct. The DED has an approved list of thousands of activities. 

Some common business activities include:

• Trading (import/export, retail, wholesale)
• Consultancy services (management, IT, marketing)
• Professional services (legal, engineering, accounting)
• Tourism and hospitality (travel agency, hotel, tour operator)
• Manufacturing and industrial activities
• E-commerce and online businesses

Based on these activities, the appropriate legal form (LLC, Sole Establishment, etc.) is chosen. 

2. Reserve a Trade Name: The next step is to select a unique name for the company and submit it to the DED for approval and reservation. The name must comply with UAE naming conventions.

3. Obtain Initial Approval: Submit an application for initial approval to the DED. This confirms that the UAE government has no objection to your proposed business.

• Timeframe: The DED usually issues initial approval within 2–4 business days, depending on the emirate and business activity. 

4. Draft a Memorandum of Association (MOA): For LLCs and other partnership structures, a legal document called an MOA must be drafted and notarized. This document outlines the ownership structure and the rules of the company.

5. Secure an Office Space (Ejari): All mainland companies must have a physical office address.

1. 1. Dubai: Register your lease with Ejari, the official online system for tenancy contracts.
   2. Other Emirates: Register your office lease with the respective emirate’s DED or authority.

Home-based offices are generally not allowed, but flexi-desks or shared offices may work for some activities.    

6. Submit Final Application and Make Payment: All documents, including the initial approval, MOA, and Ejari, are compiled and submitted to the DED. After the documents are verified, the final payment is made.

7. Receive the License: Once the payment is complete, the DED issues the trade license. The company also receives a company registration number, which is its unique identifier.

8. Post-License: Bank Account, Visas & Compliance: After getting your trade license, open a corporate bank account to manage business finances. Apply for investor and employee visas if needed. Ensure ongoing compliance with DED rules, renew licenses on time, and maintain proper accounting records.

Know more about what a company registration number is and why it matters. Check out the blog, "What is a Company Registration Number?”

The UAE introduced corporate tax in 2023, which applies to mainland companies and free zone businesses above certain thresholds. Companies must also follow VAT, Economic Substance Regulations (ESR), and Ultimate Beneficial Owner (UBO) disclosure requirements.

Setting up a mainland company involves several costs, which depend on the emirate, business activity, and office space.

Here is a simple breakdown of the potential costs in a table:

Company setup expenses, such as licensing, legal fees, and visa costs, are usually deductible when calculating taxable income under the UAE’s Corporate Tax Law (9% tax for profits above AED 375,000). For a more detailed breakdown of specific emirate costs, you can read our guide on Dubai Mainland Company Formation Cost, which explains license fees, rent, and visa expenses in detail.

Company formation costs are tax-deductible in the UAE, subject to certain conditions and accounting rules.   

Preparing the correct set of documents is a crucial part of the Mainland company setup in the UAE. The standard documents required include:

• A completed application form from the DED.
• Passport copies for all shareholders and directors.
• A copy of the initial approval certificate.
• Emirates ID or UAE residence visa copies (if applicable)
• A notarized copy of the company's Memorandum of Association (MOA).
• The registered Ejari tenancy contract for the office space.
• Copies of any additional approvals from government ministries (if required).

A UAE mainland company offers a range of powerful benefits that make it an attractive option for entrepreneurs.

• 100% Foreign Ownership: For most business activities, foreign investors can now own 100% of their mainland company without needing a local Emirati partner.
• Freedom to Trade Anywhere: A mainland company has no geographical restrictions and can trade freely across all seven emirates.
• Ability to Work with Government: Mainland companies are eligible to bid for and work on lucrative government contracts.
• Wider Scope of Activities: The mainland offers a vast list of business activities to choose from.
• No Capital Requirement: There is no longer a mandatory minimum share capital for most mainland companies.
• Access to the Local Market: You can do business directly with UAE mainland clients without an agent.

The DED issues different types of licenses based on the nature of the business activities.

• Commercial License: For companies involved in trading, buying, and selling goods.
• Professional License: For service-oriented businesses, artisans, and professionals.
• Industrial License: For businesses engaged in manufacturing, production, and assembly.
• Tourism License: For travel agencies, tour operators, and other tourism-related businesses.

Example: In Dubai, the DED issues mainland licenses through the Dubai Economy & Tourism (DET) portal, while other emirates like Abu Dhabi or Sharjah have their own DED authorities.

To understand how licensing works in specific emirates, see our detailed guides on the Dubai Mainland License and Sharjah Mainland License

The choice of jurisdiction is one of the most important decisions when starting a business. The main difference is between a mainland and a free zone setup.

For a clearer comparison, here’s a quick table highlighting the differences between an LLC and a free zone company in the UAE: