Mainland Company Formation

Do you know about Mainland Company? What is the registration process for a mainland company and why do you need to register this company? Let’s get an insight into it. You need to apply in UAE DED (Department of Economic Development) for the registration of a mainland company. It implies that if you want to establish a company in UAE Mainland then you need to register a business firm or company with the DED. The Department of Economic Development will give you the license so that you can start your business in the UAE. 

Mainland companies can perform any industrial, trading, professional, commercial, or tourism activity. You need to follow the guidelines of DED’s business to conduct these activities. Moreover, you need to get the approval of the authorities that manage such activities. 

Types of Registered Company

It is estimated that foreign investors may start up their business in a partnership with shareholders or stakeholders. In this type of partnership, 51% of the shares of a company belongs to the UAE national. While some go for the sole establishment company formation, where the owner owns 100% of shares. Whereas, in some specific cases, only UAE nationals are eligible for some business activities.

Shareholders or stakeholders have to complete the formation of documents and other regulations. The Memorandum of Association (MOA) or Service Agreement has to appoint a manager for a limited or unlimited duration. Mainland has to hire a minimum of one manager and a maximum of five managers for the business. There are the following types of a registered companies.

1. Commercial license
2. Sole establishment
3. Civil company

1. Commercial license

This is the most common type of registered company and it is widely used. Trade is the basic purpose of this registered company within the whole region. 100% foreign ownership of this company is not allowed in the UAE. Foreign investors can take 49% of the shares while UAE nationals will have 51% of shares. This type of partnership includes two to fifty shareholders. You do various business activities under one trade license. Furthermore, it does not include any corporate or income tax.

2. Sole establishment

This type of company includes professionals and service providers. The foreign investor can get 100% of ownership by starting this company, which is registered beyond Free Zones. Hence, you do not require ay local ownership and UAE National will be an agent having 0% ownership. You need to start this company through a national service agent and it includes only one shareholder. Furthermore, it does not include any corporate or income tax.

3. Civil company

A foreign investor can own 100% shares of this company but it also requires three shareholders and a local service agent. In this type, the local service agent does not have any share whereas 100% of shares belong to the foreign investor. The basic duty of a local service agent is to play the role of a signatory during government-related activities. Therefore, the local service agent does not have any administrative powers and is only responsible for annual payments. Moreover, a local service agent can be a UAE Government employee, professional, or company owner.

Registration Process of Mainland Company

Are you wondering about the registration of a mainland company? If yes, then throw away all your worries and concerns. You need to follow the following steps for the registration of a mainland company.

• Selection of business activity

In the first step, you need to select your business type such as commercial or trading, consultancy, professional, or industrial.

• Selection of legal form

You need to decide legal form depending on the above activity and the owner’s resolution.

• Deciding the trade name

It is best if you have chosen three trade names in order of preference. The trade name should be clear, meaningful, and not related to any religion. In this stage, you need to submit documents of all partners and the selected manager.

• Applying for initial approval in DED

Now you have to apply in DED for the formation of the company. This step involves the approval of a company name.

• Preparation of MOA and LSA agreement

In this step, DED will establish MOA (Memorandum of Association) and LSA (Local Sponsor Agreement) based on the given information.

• Deciding the business location

You need to get a lease contract for the registration of a company on the mainland. It will specify the location of an office, warehouse, or business centre. You can either purchase this office or get it on rent.

• Getting approvals from other authorities

You need to get external approvals for specific business activities from other authorities. These authorities can be MOH (Ministry of Health and Prevention), Civil Defence and Police, etc.

• Collection of business license

When the LSA, MOH has signed, you have to clear all the payments. You will get the license along with the MOA when you have obtained all the approvals.