hen starting a company in the UAE, one of the first and most important questions to answer is: “Should my company be registered as a Free Zone Establishment, Offshore Company or a Mainland Company?”
This article is the first of a series of articles that will highlight some of the main differences between operating a company in the Mainland, Offshore or out of a Free Zone within the UAE, and the benefits of each.
UAE Mainland Company Must-Knows:
A Mainland company is licensed by the Department of Economic Development (DED) of the particular Emirate in which your company is established. The license from the DED allows you to do business in the local market as well as outside the UAE without any restriction.
A UAE National must serve as a ‘Local Partner’ or a ‘Local Service Agent’ in a Mainland licensed company. This means that 51% shares of the company are held by the Local Partner (UAE National) with the remaining 49% shares for the Expat Partner.
However, it is not required that the Local Partner has any input in the strategic business operations or directions at all. The Local Partner is only responsible for signing all government applications. Generally, you pay a small annual fee towards the Local Partner. But otherwise, this person is not involved in any way in your business affairs.
Perhaps the biggest advantage to a Mainland license is that a Mainland company can freely do business in the local market, any free zone or outside UAE.
Another advantage is that the number of employee visas your company can apply for is restricted only to the size of your office space. Meaning, the more office space you have, the more visas you are allowed to apply for. Outdoor sales staff, public relations officer, and driver visas however are not restricted by the size of your office space.
An important requirement for a Mainland license is that a minimum of 200 square feet of office space must be leased annually. In other words, you must ensure that you are renting an office that is at least 200 square feet. Only then will the DED issue the license.