DUBAI MAINLAND SET UP:
UAE main land consist of all Business Entities which are directly registered under, each emirates government and its authorities with the limitation of commercialized geographical areas . These main Land setups directly represent the Government policies and its and its legal Structure towards its most developed Economy.
UAE main land consist of all Business Entities which are directly registered under, each emirates government and its authorities with the limitation of commercialized geographical areas . These main Land setups directly represent the Government policies and its and its legal Structure towards its most developed Economy.
Dubai Mainland Setup
The total geographical area which is permitted by the Dubai economic department to all the private business entities and their representative in the scope of commercial areas in Dubai to operate business functions. |
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Licensing:
The basic requirement for all business activity in UAE is one of the following three categories of licenses:
Ownership Requirements
51% participation by UAE nationals is the general requirement for all UAE company formations except:
Procedures governing the operations of foreign business interests.
In practice, however, Dubai company formation procedures are similar to the general system other emirates follow, whereby foreign owned offshore companies operated in one of three ways: with a local sponsor, through a partnership with a UAE national or company, or through a private limited company or public shareholding company incorporated by Ruler's decree. Since 1984, steps have been taken to introduce a codified company law applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the “Commercial Companies Law” - and its by-laws have been issued. In broad terms the provisions of the Law are as follows: The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and offshore company incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.
Legal Structures for Business
Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the Commercial Companies Law - and its by-laws govern the operations of foreign business. In broad terms the provisions of these regulations are as follows:
The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. The seven categories of business organization defined by the Law are:
Partnerships
General partnership companies are limited to UAE nationals only. The Dubai government does not presently
encourage the establishment of partnership-en-commendam and share partnership companies.
Joint Venture
A joint venture is a contractual agreement between a foreign party and a local party licensed to engage in the desired activity. The local equity participation in the joint venture must be at least 51%, but the profit and loss distribution can be mutually agreed. Joint ventures are suitable for companies working together on specific projects.
Public and Private Shareholding Companies
The Law stipulates that companies engaging in banking, insurance, or financial activities should be run as public shareholding companies. Foreign banks, insurance and financial companies, however, can establish a presence in Dubai by opening a branch or representative office.
Shareholding companies are suitable primarily for large projects or operations, since the minimum capital required is Dh. 10 million (US$ 2.725 million) for a public company, and Dh. 2 million (US$ 0.545 million) for a private shareholding company. The chairman and majority of directors must be UAE nationals and there is less flexibility of profit distribution than is permissible in the case of limited liability companies.
Professional Firms
In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. Such firms may engage in professional or artisan activities but the number of staff members that may be employed is limited. A UAE national must be appointed as local service agent, but he has no direct involvement in the business and is paid a lump sum and/or percentage of profits or turnover. The role of the local service agent is to assist in obtaining licenses, visas, labor cards, etc…
The basic requirement for all business activity in UAE is one of the following three categories of licenses:
- Commercial licenses covering all kinds of trading activity;
- Professional licenses covering professions, services, craftsmen and artisans;
- Industrial licenses for establishing industrial or manufacturing activity.
Ownership Requirements
51% participation by UAE nationals is the general requirement for all UAE company formations except:
- Where the law requires 100% local ownership;
- In the Free Trade Zones where 100% foreign ownership is permitted;
- In activities open to 100% AGCC ownership;
- Where wholly owned AGCC companies enter into partnership with UAE nationals;
- In respect of foreign companies registering branches or a representative office in Dubai;
- In professional or artisan companies where 100% foreign ownership is permitted.
Procedures governing the operations of foreign business interests.
In practice, however, Dubai company formation procedures are similar to the general system other emirates follow, whereby foreign owned offshore companies operated in one of three ways: with a local sponsor, through a partnership with a UAE national or company, or through a private limited company or public shareholding company incorporated by Ruler's decree. Since 1984, steps have been taken to introduce a codified company law applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the “Commercial Companies Law” - and its by-laws have been issued. In broad terms the provisions of the Law are as follows: The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and offshore company incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.
Legal Structures for Business
Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the Commercial Companies Law - and its by-laws govern the operations of foreign business. In broad terms the provisions of these regulations are as follows:
The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. The seven categories of business organization defined by the Law are:
- General partnership company
- Partnership-en-commendams
- Joint venture company
- Public shareholding company
- Private shareholding company
- Limited liability company
- Share partnership company
Partnerships
General partnership companies are limited to UAE nationals only. The Dubai government does not presently
encourage the establishment of partnership-en-commendam and share partnership companies.
Joint Venture
A joint venture is a contractual agreement between a foreign party and a local party licensed to engage in the desired activity. The local equity participation in the joint venture must be at least 51%, but the profit and loss distribution can be mutually agreed. Joint ventures are suitable for companies working together on specific projects.
Public and Private Shareholding Companies
The Law stipulates that companies engaging in banking, insurance, or financial activities should be run as public shareholding companies. Foreign banks, insurance and financial companies, however, can establish a presence in Dubai by opening a branch or representative office.
Shareholding companies are suitable primarily for large projects or operations, since the minimum capital required is Dh. 10 million (US$ 2.725 million) for a public company, and Dh. 2 million (US$ 0.545 million) for a private shareholding company. The chairman and majority of directors must be UAE nationals and there is less flexibility of profit distribution than is permissible in the case of limited liability companies.
Professional Firms
In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. Such firms may engage in professional or artisan activities but the number of staff members that may be employed is limited. A UAE national must be appointed as local service agent, but he has no direct involvement in the business and is paid a lump sum and/or percentage of profits or turnover. The role of the local service agent is to assist in obtaining licenses, visas, labor cards, etc…
Advantages of commencing a Business in the Mainland:
- Privileged to do business activity in any part of UAE.
- No limitations or barriers in registration and visas and all type legal requirements.
- No limitation in office space requirement and recruiting process.
- No yearly auditing
- No corporate tax
- Flexibility to rent office anywhere
- No limitations in getting employment visas