What Benefits Does a Business Get When Opening a Mainland Company in the UAE?
To register a company on the mainland, there are no requirements for the minimum amount of authorized capital. When opening a corporate bank account, the likelihood of receiving a refusal is much less than for an offshore company. In addition, Mainland Company in the UAE gets significant advantages for doing business:
- The opportunity to engage in any activity throughout the country.
- There are no restrictions on permitted types of business.
- Availability of participation in tenders held by the state and the chance to work in cooperation with government agencies.
- Zero tax rate on income and profits of individuals, the possibility of their complete and unhindered repatriation.
- The right to work with any counterparties.
- Simplified procedure for hiring staff and no restrictions on obtaining work visas.
All these conditions have always attracted foreign investors. But the opportunity to open a mainland company in Dubai and other territories of the UAE without a local partner, a citizen of the United Arab Emirates, who would own 51% of the shares, appeared only after the entry into force of Federal Decree-Law No.26/2020 in April 2021.
Taxation for a Mainland Company
A mainland company registered in the UAE, in addition to fees for the annual renewal of licenses, must pay the following taxes:
- Corporate income tax — its rate is 9% for most types of activities, and you need to pay it if the annual profit exceeds 375 thousand dirhams (AED).
- VAT in the amount of 5% for the sale of goods, services, and property rights in the country, the import of goods into the UAE, and the rental of facilities if the annual turnover exceeds 375 thousand AED. For some types of activities, a VAT rate of 0% is provided.
- Excise tax for companies that produce import into the UAE, store, transport, or sell goods that can cause harm to health (tobacco products and vaping products — 100%, foods and drinks with sweeteners – 50%).
However, a resident company in the UAE is exempt from taxes on dividends and capital gains, intra-group transactions, and reorganizations.
Organizational and Legal Forms of Mainland Companies in the UAE
A mainland company in Dubai and other emirates can be registered in the following format:
- A Sole Proprietorship is an individual private enterprise, an analog of personal entrepreneurship. The owner of such a company does not pay corporate taxes but bears full responsibility for all legal and financial obligations. Sole Proprietorship can only carry out activities covered by a professional license.
- Limited Liability Company (LLC) — in this case, the liability of the founders (there can be from 2 to 50) is limited to the share of participation of each in the authorized capital. Such companies can conduct any activity in the UAE.
- Branch of a Freezone company registered in a Free Zone. The unit must have the same name as this company, and it must be registered with the Department of Economic Development and the Ministry of Economy.
- The branch of a foreign company can conduct activities similar to the parent company and promote its products and services.
Dynasty Business Adviser specialists will help you choose the most suitable legal form of business organization, depending on its direction and desired structure.
How to Open a Mainland Company in Dubai and other UAE Emirates
To open a mainland company in the Emirates, you must do the following:
- Decide on the type of activity (you can choose various kinds of business in each direction).
- Choose a suitable organizational and legal form.
- Come up with a company name — it must contain an indication of the company’s activities or the terms of the founders, as well as the legal form.
- Please find a local service agent to represent the interests of your company in government agencies, and agree with him. Such an agent is not needed only when registering a branch of a foreign company.
- Obtain preliminary approval from the Department of Economic Development to register a resident company in the UAE with the chosen name to conduct a specific type of activity.
- Prepare and notarize the constituent agreement and charter of the company and coordinate them with the Department of Economic Development.
- Rent or buy office space in the Emirates, where you will register a mainland company in the UAE.
- Obtain, if necessary, additional permits for conducting certain types of activities from the police, the Ministry of Health, and other government agencies.
- Get licenses for selected styles of activities, pre-pay all fees, and submit documents for company registration.
Registration of a mainland company in the UAE ends with receiving a registration certificate and all constituent documents. Then, you can start issuing an Establishment Card, opening a corporate bank account, and registering with the migration service.
We offer a turnkey service for opening a mainland company in the UAE, and we will take on most of the preparatory work, which will help you save time and money.
Terms for Opening a Mainland Company
Registration of a resident company in the UAE takes from 4 working days, provided that all necessary documents have been collected and legalized. Their preparation will take from one to two weeks, depending on the need to obtain additional permits from the government authorities of the Emirates.
The collected documents must be translated into Arabic and certified by a notary in your country, the Ministry of Justice, the Consular Department of the Ministry of Foreign Affairs, and the UAE Consulate.
Documents Required to Open a Mainland Company in Dubai
To open a mainland company in Dubai, you need to collect and legalize the following documents:
- Prior permission from the Office of Residents and Foreigners Affairs (copy).
- Foundation agreement for the new company.
- Notarized agreement with the service agent.
- Office lease agreement (copy).
- A license to engage in the chosen activity.
- Passport copies of each founder and director and receipts for payment of utility bills to confirm their residential address.
- A short resume and a letter of recommendation from the bank for each founder.
If there is a legal entity among the founders of the local company, the package of documents should also include the following:
- Copies of the constituent documents of the shareholder company.
- A decision by the governing body on its intention to become a co-founder of a new company.
- A letter from the bank servicing the parent company and an extract from its corporate account on cash flows.
- A certificate from the tax authority confirming that the company has no debt to pay taxes and fees.
- Copies of passports of directors of the parent company and documents proving their place of actual residence.
A package of documents is submitted to the Department of Economic Development of Dubai or another emirate where you want to register a Mainland Company.
Bank Account for a Mainland Company in Dubai
The final stage of registering a company on the mainland is opening a corporate account in one of the UAE banks. This requires the personal presence of the company owner and one or more of its founders, who will be signatories on behalf of the legal entity in the bank. At this stage, Dynasty Business Adviser supports our clients during interviews with bank representatives.
Cost of Opening a Mainland Company in the UAE
Registration of a Mainland company costs from $9,000. The cost of opening such a company is individual in each case. It depends on the following factors:
- Selected types of activities and several licenses.
- The need to obtain additional permits from government agencies.
- Office space area.
- The number of employees and resident visas must be issued for the founders of the company, its directors, and personnel.
To clarify the cost of services, please contact our managers for advice!
Advantages of Cooperation with Dynasty Business Adviser
Opening a mainland company in the Emirates is always associated with the routine work of legalizing documents and the need to resolve issues that arise while obtaining permits and licenses quickly. In addition, it is necessary to have a good knowledge of the legislation of the UAE and individual emirates, which makes it difficult for foreign businessmen to open their businesses here.
Dynasty Business Adviser is a company with extensive experience in registering any company in the UAE. Our office is located in Dubai, and the highly qualified economists and lawyers working with us are well acquainted not only with local laws but also with traditions, which is also essential. We have developed effective schemes for solving problems of any complexity. We are ready to help you open a mainland company in the UAE quickly and at a reasonable, adequate price. Contact us in any convenient way from those listed in the contacts!