Mainland Company Formation in Dubai without a Local Sponsor

Mainland company formation in Dubai is providing numerous opportunities for entrepreneurs. With Dubai’s booming economy, thanks to advantages such as its strategic location, modern infrastructure, and business-friendly policies, it’s no surprise that Dubai received approximately AED 54.5 billion (USD 14.7 billion) in foreign direct investment (FDI) in 2021, a 5.5% increase from 2020.

 In the first half of 2023 alone, Dubai attracted AED 29.5 billion (USD 8 billion) in FDI, marking a 9.4% growth compared to the same period in 2022.

business setup in dubai

Jurisdictions in the UAE

The UAE offers three main jurisdictions for business setup, each providing unique opportunities:

 Mainland

Setting up a mainland company allows for extensive business operations within and beyond the UAE.

 Freezone

Freezone companies are restricted to operating within their specific zones and cannot operate outside them.

 Offshore

Offshore companies differ as their parent companies are based in other countries, with only their offshore entities set up in UAE offshore jurisdictions.

Dubai Mainland Company Setup without a Local Sponsor

It’s no longer mandatory to appoint a local sponsor when setting up a business in Dubai, allowing foreign investors to enjoy 100% ownership. However, certain activities may still require a local sponsor according to UAE government regulations.

Advantages of Mainland Company Formation in Dubai
  1. Complete Ownership:

   Unlike traditional mainland setups where a local sponsor owns up to 51% of the business, setting up a mainland company without a local sponsor allows for 100% ownership, benefiting various management aspects.

  1. Control:

   Without a local sponsor, business owners have more control over decision-making, strategic direction, and everyday operations.

  1. Flexibility:

   Operating without a local sponsor offers greater flexibility in business activities and the ability to adapt to market changes, free from the conditions imposed by a local sponsor.

  1. Access to Local Market:

   Mainland companies have better access to the local market, allowing for easy engagement with government-related entities, UAE customers and businesses, and participation in project biddings.

  1. Global Impression:

   Operating in Dubai enhances the global image of a business, adds credibility to the brand, and attracts international clients, leading to higher profitability and development.

Licenses for Mainland Business Setup in Dubai

To operate a business in Dubai, specific licenses are required to ensure smooth business operations. The necessary licenses include:

  1. Industrial License:

   Required for companies involved in manufacturing and industrial services.

  1. Commercial License:

   Needed for companies engaged in purchasing and selling products and services.

  1. Tourism License:

   Mandatory for companies organizing tours and trips in and out of Dubai.

  1. Professional License:

   Ensures compliance with local regulations and is necessary for certain types of professional services.

Process of Obtaining a Professional License in Dubai

To set up a mainland company in Dubai, obtaining a professional license involves:

  1. Acquiring a professional degree (e.g., engineering, medicine, law, accounting) and gaining relevant experience.
  2. Hiring business partners with similar degrees and experience.
  3. Summarizing the company activities.
  4. Appointing a local service agent to handle interactions with local government entities.
  5. Securing all necessary approvals from the Department of Economic Development (DED).
  6. Ensuring the company has a unique name that is approved by the DED.

Conclusion

Setting up a Dubai mainland company without a local sponsor significantly changes the business landscape, offering foreign investors freedom and control over their business activities. This fosters an environment of innovation, creativity, and competition. Free from the constraints imposed by a local sponsor, Dubai has become an even more attractive destination for businesses. However, mainland company formation can be complex without thorough research and planning. Therefore, consulting firms are crucial for their expertise and guidance.

One such consultancy firm is Unicorn Global Solutions, which supports entrepreneurs throughout their business setup journey. Let us assist you in establishing your business in Dubai. Text us on WhatsApp or call us today.

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