If you’re planning to start a business in the United Arab Emirates (UAE), mainland company formation could be the right choice for you. Mainland companies are registered and licensed by the local authorities, allowing you to conduct business throughout the UAE market. In this blog post, we will provide an overview of mainland company formation in the UAE.
Local Sponsorship:
Mainland companies in the UAE require a local sponsor or local service agent, who is a UAE national or a UAE-owned company. The local sponsor holds a minority share (usually 51%) in the company but does not have involvement in the day-to-day operations. The local sponsor acts as a liaison with the government authorities.
Business License:
To operate a mainland company, you need to obtain a commercial license from the Department of Economic Development (DED) in the respective emirate. The license permits you to conduct business activities within the chosen sector.
Legal Structure Options:
Mainland companies can be established as sole proprietorships, partnerships, or limited liability companies (LLCs). Each structure has its own set of requirements and implications in terms of liability, shareholding, and governance. It’s important to choose the structure that best suits your business objectives.
Compliance with Labor Laws:
Mainland companies must adhere to the UAE labor laws, which include regulations on employment contracts, working hours, salaries, and benefits. Ensure that you are familiar with the labor laws and are in compliance when hiring employees for your mainland company.
Market Access:
Setting up a mainland company allows you to freely operate in the local UAE market and bid for government contracts. It also provides opportunities for networking with other businesses, accessing local suppliers and customers, and expanding your operations within the UAE.
While mainland company formation offers several advantages, it’s important to understand the legal and regulatory requirements associated with it. Consider engaging a business setup company with expertise in mainland company formation to guide you through the process and ensure compliance with local laws.
