Mainland is the most common form of business in the Dubai. It opens door to a wider market by letting you trade with other mainland companies. Unlike free zones, you don’t have to go through the task of finding a local distribution agent and pay customs duty.
A mainland business license lets you work on government projects that are extremely profitable. Competition will also be less, as free zone companies are not provided with the opportunity to work for government entities.
Moreover, mainland companies don’t demand for a minimum capital requirement, which makes the establishment even easier and affordable. Selecting the type of license is the first step in starting a business in UAE. You can choose from commercial, professional and industrial license.
Companies engaged in buying or selling of goods can opt for a commercial license. Entities involved in industrial and manufacturing activities, should apply for industrial license. And, professional license will be granted to service providers, professionals, artisans, and craftsmen.
Mainland Companies are of various types and their activities differ.
LLC can conduct any industrial, commercial, professional and tourism business. In the case of public joint stock companies, any industrial, commercial or professional business activities can be practiced. But, a Private joint stock company can perform only commercial and industrial activities.
A branch of a local or GCC company can conduct activities included on the main company license and a branch of a foreign company can conduct only selected commercial and professional activities. When it comes to branches of free zone companies, commercial, industrial and professional businesses are permitted as long as the activity of the main company is authorized on the mainland.
In a mainland setup, a foreign investor can own maximum of 49% shares and at least 51 percent of the shares should be owned by the local sponsor. But, off late, the government has approved a new investment law allowing 100 percent foreign ownership on mainland. This means you no longer will have to rely on local sponsors to begin your own company.
The new move will encourage more investors to establish their enterprise in UAE, which will result in a significant positive effect on foreign direct investments. With the amendment, mainland companies will enjoy the same status or perhaps more than that of free zone companies.
The UAE government is on a constant lookout to ease the process of doing business in UAE. The recent amendments in policies prove the same.