The Complete Guide to Mainland Company Formation in the UAE
Published by BizSetupUAE Advisory • Updated for Current Regulations
1. Understanding the Legal Framework and Foreign Ownership Reforms
For decades, establishing an onshore company in the United Arab Emirates required a foreign investor to partner with a UAE National (Emirati sponsor) who held 51% of company shares. Following monumental amendments to the Federal Law on Commercial Companies (Federal Decree-Law No. 26 of 2020), foreign entrepreneurs can now retain 100% full ownership of mainland entities across thousands of commercial, professional, and industrial activities.
This legislative shift eliminated the need for a local service agent (LSA) or local sponsor for most standard business operations, giving international business owners complete corporate governance control, direct dividend distribution, and total operational autonomy.
2. Step-by-Step Mainland Registration Process
Setting up a mainland firm involves an organized administrative sequence coordinated through local economic departments. Following these key steps ensures a smooth licensing process:
Step A: Select Business Activity & Legal Form
Identify your activity code from the official DET directory. Common legal structures include Limited Liability Company (LLC) for commercial activities and Sole Establishment or Civil Company for professional services.
Step B: Reserve Trade Name
Submit proposed brand names to the Department of Economy and Tourism. The trade name must comply with local naming guidelines—avoiding offensive words, religious terms, or existing trademark violations.
Step C: Obtain Initial Approval
Receive preliminary clearance from the government verifying that there are no legal objections to starting the business under your chosen activity.
Step D: Draft MOA & Lease Office Space (Ejari)
Draft the Memorandum of Association (MOA) and secure physical commercial office space. A registered tenancy contract (Ejari in Dubai) is mandatory for Mainland license issuance.
Step E: License Issuance & Fee Payment
Pay official voucher fees to the DET to collect your official trade license. You can now apply for an Establishment Card to begin processing investor and employee visas.
3. Types of Mainland Licenses
Depending on the commercial nature of your operations, the DET issues specific categories of trade licenses:
- Commercial License: Covers trading, buying, selling, import/export, general logistics, and retail operations.
- Professional License: Designated for service-based businesses, management consultancies, IT services, design agencies, and individual specialists.
- Industrial License: Required for manufacturing, assembly lines, packaging, and raw material processing operations (requires physical factory or warehouse space).
4. Corporate Banking and Tax Compliance
Once your mainland license and investor visa (Emirates ID) are active, opening a corporate bank account with major UAE banking institutions (such as Emirates NBD, Mashreq Bank, or FAB) is the final operational phase.
Mainland companies must also comply with federal economic requirements, including registration for corporate tax (9% on net profits exceeding AED 375,000) and VAT registration (5% standard rate) once taxable turnover crosses mandatory statutory thresholds. Proper bookkeeping and annual financial auditing are required to maintain business good standing.