Company registration in Mainland
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company registration
mainland
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Incorporation in the UAE can follow one of two scenarios: registering a free zone company or a mainland company. The first option is more convenient and simpler, but it does not allow you to work directly in the UAE market: a free zone company can only do business in markets outside the UAE or with companies from other free zones, but not in the UAE.
If you intend to operate in the UAE market, a mainland company is the right one for you.
If you intend to operate in the UAE market, a mainland company is the right one for you.
01
Features of Mainland companies
Mainland companies are quite different from free zone companies. The key features of mainland companies are as follows:
Access to the UAE domestic market
Such a company can offer products to its customers abroad and within the UAE (both free zone companies and other Mainland companies as well as individuals).
Any legal address
The Mainland company can be registered at any address within the UAE, there is no reference to specific locations (free zone companies, on the other hand, need to be registered only in the relevant free zone).
Foreign partner participation
If a company is engaged in strategic activities, at least 51% of the mainland company' shares must be owned by a UAE national. This requirement applies only to strategic activities (e.g. manufacture and supply of weapons and military equipment), Mainland companies from other sectors can be 100% foreign-owned, as can free zone companies. A full list of strategically important activities is available here.
Personal presence in the UAE to register
In order to register a Mainland company, the founders must be physically present in the UAE. Alternatively, they can issue a power of attorney to a representative in the UAE. Many notaries in the UAE will execute the power of attorney remotely (through an online conference).
Income Tax
As of 01.06.2023, mainland companies will pay income tax at a rate of 9% on income exceeding AED 375,000.
More activities
A Mianland company may undertake up to 10 activities without paying additional fees for additional business licenses (a free zone company may undertake only 3).
What activities are best suited to:
Most often, Mainland companies are needed for those who intend to operate in the B2C market in the UAE. These are usually activities such as:
- Medical services (medical centres, dental clinics, etc.).
- Catering services (cafés, restaurants, coffee shops, etc.).
- Educational and training organisations (kindergartens, educational centres).
- Real estate companies (agencies, platforms).
- Production and sale of food products, essential goods.
- Carsharing and other similar services in the UAE.
- Financial services (there may be restrictions and citizenship requirements for shareholders).
- Retail trade.
02
Registration procedure
There are several steps involved in registering a mainland company. Most of them are carried out sequentially, so not all of them can be done in parallel. In general terms, the procedure is as follows:
1
Choice of activities
Each company receives a business license upon registration, which specifies the types of activities for this company (analogous to the Russian classifiers of economic activities).
A Mainland company can have 10 of these activities under one business license. In the event that you decide to apply for our Mainland company registration service, we will select suitable activities according to the UAE classification and warn you that some activities may require additional approvals.
A Mainland company can have 10 of these activities under one business license. In the event that you decide to apply for our Mainland company registration service, we will select suitable activities according to the UAE classification and warn you that some activities may require additional approvals.
2
Choice of a location and company name
Before applying for incorporation, it is necessary to determine in advance at which address the company can rent an office, as well as the company name (we recommend picking 2−3 alternatives in case the main one is already occupied by a previously registered company).
3
Application for pre-approval of company registration
This is the first formal stage at which the UAE authorities confirm that company registration is possible and that the company can use its chosen business name.
4
Preparation and signing of the company’s Memorandum & Articles of Associations
The articles of association determine how the company’s affairs and management are to be conducted and managed, the amount of share capital, the powers of the director and the general meeting of shareholders, etc.
It is a mandatory document for any company. It must be drawn up in English and Arabic and signed before a notary. It requires the personal presence of all the founders or their representatives under a notarial power of attorney.
It is a mandatory document for any company. It must be drawn up in English and Arabic and signed before a notary. It requires the personal presence of all the founders or their representatives under a notarial power of attorney.
5
Execution of an office lease agreement
To complete the company registration procedure, you will need proof of title to the premises in which the company is registered.
Generally, companies rent office space. The minimum office space to obtain a licence is 140 sq ft (about 13 sq m).
Generally, companies rent office space. The minimum office space to obtain a licence is 140 sq ft (about 13 sq m).
6
Acquisition of additional permits
Some businesses require additional permits from certain authorities (e.g. medical services). The acquisition of such permits from the relevant authorities is a prerequisite for completing the company registration process. The conditions for acquiring such permits depend on the specific activity (e.g. qualification, examination, etc.);
7
Acquisition of a business license and completion of registration
This is the final stage of incorporation. The following documents must be submitted to the registration authority after completing all the previous steps:
- office rental agreement or other supporting documents;
- proof of fees payment;
- permits from sectoral authorities for certain activities (if required).
This procedure takes on average 1 to 6 months and depends on the type of the company’s activity (the registration period will be longer for regulated activities). The upper limit of this period is set by law (if the process takes longer than 6 months, it will have to be restarted.
READ IN THE KNOWLEDGE BASE:
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03
Registration costs
The approximate costs of registering a Mainland company are described below:
Business license fee (10 activities can be included; valid for 1 year)
$5 000~
Municipal fee of 5% of the annual office rent (depends on the office rent for 1 year)
$100+
Company registration at the Immigration Department
$500~
Office rental costs (per month)
$160+
Notary services and a number of additional costs, which depend on the specific circumstances and the preferences of the company (e.g. choice of premises and length of lease), will also be required to carry out all the legally relevant actions.
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