Dubai, with its booming economy and strategic location, continues to attract businesses from around the world. One of the primary choices entrepreneurs face when setting up a business in Dubai is whether to establish a mainland company or opt for a free zone setup. In this article, we will explore mainland license Dubai, their types, and other essential aspects to help you make an informed decision.
Types of Dubai mainland licenses:
Commercial license: This is the most common type of mainland license and is suitable for businesses engaged in trading activities, such as buying and selling goods. It allows companies to conduct trading activities within the UAE market and abroad.
Professional license: Professional licenses are issued to businesses offering professional services, including consultancy, legal, medical, engineering, and other professional services. These businesses must have a locally appointed service agent to act as a liaison with government authorities.
Industrial license: Industrial licenses are granted to companies involved in manufacturing or industrial activities. These businesses typically require larger office or warehouse spaces and must adhere to specific regulations related to safety and the environment.
General trading license: This license allows businesses to engage in multiple trading activities under a single license. It is a popular choice for companies that want to trade in various products and commodities.
Key considerations for a mainland license in Dubai:
Local sponsorship: To establish a mainland company, you’ll need a local sponsor or partner who holds 51% of the company’s shares. While the local sponsor has ownership rights, a well-structured agreement can ensure that operational control remains with the foreign investor.
Flexibility: Mainland companies have the advantage of conducting business not only within Dubai but also throughout the UAE and internationally. This flexibility allows access to a broader customer base and market.
Physical office requirement: Mainland companies typically require physical office space in Dubai. The size and location of the office can vary based on the nature of the business activity.
Taxation: Mainland companies are subject to corporate taxes in Dubai. However, UAE introduced a value-added tax (VAT) in 2018, which applies to most goods and services at a standard rate of 5%.
Commercial opportunities: Establishing a mainland company provides the opportunity to engage directly with the local market, government entities, and other mainland businesses. It can be advantageous for businesses focused on local clientele.