How to Start a Business in Dubai Mainland

Starting a business in Dubai mainland requires selecting a legal form, securing a trade licence from the Department of Economic Development (DED), and meeting post-incorporation obligations under the UAE Commercial Companies Law. The process is governed by Federal Decree-Law No. 2 of 2015 on Commercial Companies and the DED's regulatory framework.

Related Services: Explore our Trademark License Agreement and Business Closure services for practical legal support in this area.

WHAT LEGAL STRUCTURE SHOULD I CHOOSE FOR A MAINLAND COMPANY?

The most common mainland structures are a limited liability company (LLC), a sole establishment, and a civil company. An LLC requires at least one UAE national shareholder holding 51 % of the shares, unless the activity falls under the 100 % foreign ownership list issued by the Cabinet. A sole establishment is owned by a single individual who bears unlimited liability, while a civil company is suited for professionals such as doctors, engineers, and lawyers and permits 100 % foreign ownership with a UAE national service agent. Each form dictates share capital requirements, liability exposure, and permissible activities.

Choosing the right structure begins with defining the business activity, as the DED maintains a classified list of permitted activities for each licence type. For example, trading, manufacturing, and consulting fall under the commercial licence, whereas professional services need a professional licence. The activity determines whether the 51 % Emirati shareholding rule applies or if the activity qualifies for full foreign ownership under the Cabinet's decision No. 1 of 2021. Once the activity and structure are identified, the proposed company name must be reserved through the DED's online portal, ensuring it does not violate naming conventions or existing trademarks.

WHAT ARE THE STEPS TO OBTAIN A MAINLAND TRADE LICENCE?

First, obtain initial approval from the DED for the chosen activity and legal form. This step requires submitting a completed application form, copies of shareholders' passports, Emirates IDs for UAE nationals, and a No Objection Certificate (NOC) from the sponsor if applicable. Second, draft and notarise the Memorandum of Association (MOA) and, for LLCs, the Articles of Association (AOA). The MOA must specify the company's purpose, share capital, profit-sharing ratio, and management structure, and it must be attested by a notary public in the UAE.

Third, secure a physical office space that meets the DED's minimum size requirements; a tenancy contract (Ejari) is mandatory for licence issuance. Fourth, submit the complete licence package-initial approval, MOA/AOA, tenancy contract, and passport copies-to the DED. The department reviews the documents, issues a payment voucher for the licence fee, and upon payment, prints the trade licence. The entire procedure typically takes five to ten working days, provided all documents are correct and the activity does not require additional approvals from other authorities such as the Ministry of Health or the Telecommunications Regulatory Authority.

WHAT COMPLIANCE REQUIREMENTS APPLY AFTER INCORPORATION?

After receiving the trade licence, the company must register with the Federal Tax Authority (FTA) for VAT if its taxable supplies exceed AED 375,000 per annum, and with the General Directorate of Residency and Foreigners Affairs (GDRFA) to obtain employment visas for staff. The company must also open a corporate bank account; banks usually request the trade licence, MOA, shareholder passports, and a board resolution authorising the account opening.

Ongoing obligations include renewing the trade licence annually, maintaining proper accounting records in accordance with International Financial Reporting Standards (IFRS), and submitting an annual audit report if the company exceeds the thresholds set by the UAE Commercial Companies Law. Additionally, any changes to shareholders, capital, or business activity must be reported to the DED within thirty days, and the company must display its licence prominently at the premises. Failure to comply may result in fines ranging from AED 5,000 to AED 50,000, suspension of the licence, or cancellation, as stipulated in Article 264 of the Commercial Companies Law.

HOW DO FREE ZONE AND MAINLAND OPTIONS COMPARE?

Free zone companies enjoy 100 % foreign ownership, exemption from import and export duties, and the ability to repatriate 100 % of capital and profits. However, they are restricted to conducting business within the free zone or outside the UAE; direct trading with the UAE mainland requires a local distributor or a mainland licence. Mainland companies, by contrast, may trade freely within the UAE market and bid for government contracts, but they must satisfy the Emirati shareholding rule unless the activity is on the approved 100 % foreign ownership list.

Setup costs differ: free zone licences often bundle visa quotas, office space, and administrative services into a single package, while mainland licences involve separate fees for the DED, tenancy contract, and visa processing. Timeframes also vary; free zone licences can be issued within three days, whereas mainland licences typically take five to ten days after document submission. Entrepreneurs should evaluate their target market, desired level of local interaction, and long-term expansion plans when deciding between the two jurisdictions.

FREQUENTLY ASKED QUESTIONS

What is the minimum share capital for an LLC in Dubai mainland?
The UAE Commercial Companies Law does not prescribe a minimum share capital for LLCs; however, the DED may request proof of sufficient capital to support the declared activity. For certain activities, such as banking or insurance, specific capital requirements apply under sector-specific regulations.

Can a foreign professional obtain a licence without a UAE national partner?
Yes. Professionals such as doctors, engineers, lawyers, and accountants may establish a civil company with 100 % foreign ownership, provided they appoint a UAE national service agent who does not hold any share in the company. This is permitted under Federal Decree-Law No. 2 of 2015, Article 71, and the DED's professional licence guidelines.

How long does it take to obtain an employment visa for a staff member after licence issuance?
After the trade licence is issued, the employer must apply for an entry permit through the GDRFA, which usually takes three to five working days. Once the employee enters the UAE, the medical examination, Emirates ID registration, and labour contract stamping add another five to seven days, resulting in a total processing time of approximately ten to fourteen days.

What are the penalties for operating without a valid trade licence?
Operating without a valid licence constitutes a violation of the DED's regulations and may attract a fine of up to AED 50,000, immediate closure of the premises, and possible deportation of foreign employees, as outlined in the DED's Enforcement Regulation No. 1 of 2020.

Is it possible to change the company's legal form after incorporation?
Yes. A company may convert from an LLC to a sole establishment or vice versa by submitting a conversion application to the DED, accompanied by an updated MOA/AOA, shareholder resolutions, and clearance from any creditors. The conversion must comply with Articles 217-220 of the Commercial Companies Law, and the DED issues a new trade licence reflecting the amended structure.

Do mainland companies need to appoint an auditor?
Only LLCs that exceed the thresholds set by Federal Decree-Law No. 2 of 2015-specifically, those with total assets exceeding AED 50 million, annual revenue exceeding AED 100 million, or more than fifty employees-are required to appoint a licensed auditor and submit an audited financial statement annually. Smaller LLCs may maintain internal accounts without external audit, provided they keep accurate records in line with IFRS.

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