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Dubai Mainland is an economic zone regulated by the Department of Economic Development (DED). Dubai mainland businesses are allowed to apply for governmental contracts and sell their goods and services within the Emirates and abroad. Mainland businesses enjoy exclusive access to the Dubai market and reduced tax rates compared to other developed nations worldwide. The corporate tax rate for mainland businesses is 9% on profits exceeding 375,000 AED, or US$102,000, as per Article 3 of Federal Decree-Law No. 47 of 2022. Contrastingly, the USA and UK have a higher tax rate at 21% and 25% respectively.
The Business set-up process in mainland Dubai has been simplified to help businesses establish operations conveniently in the region. A typical business set up involves market analysis, industry selection, legal form selection, trade name decision, memorandum creation, DED submission, and license application. The process takes between 7-14 days. The cost of setting up a Dubai mainland business varies between 20,000 AED to 40,000 AED depending on your legal structure, license, and industry as per the Department of Economy and Tourism.
Dubai mainland offers various opportunities for businesses, employees, and marketers in all sectors, including real estate, health care, finance, and supply chain. The opportunities are increasing with “Dubai’s leadership aspiration to double Dubai’s GDP by 2033, and make Dubai the safest, and most connected city in the world”. The D33 Agenda is designed to enhance economic prospects for mainland businesses and integrate advanced technologies and artificial intelligence to boost the region’s economic performance.
Just like other business jurisdictions the Dubai mainland offers countless opportunities for business owners and employees, it also presents some challenges. High operational costs, primarily due to higher office rentals in the mainland, and higher tax charges, lead to higher expenses, making it difficult for business owners. Nonetheless, the ability to sell in the growing Dubai market enables businesses to generate higher revenues in the long run, thus, retaining their profitability.
In this article, we will discuss everything you need to know before setting up a business in Dubai Mainland, including the set-up process, opportunities, legalities, taxes, and the differences between free zones. Let’s go!
What is Dubai Mainland?
Dubai Mainland is an economic zone within Dubai outside the free zones. Dubai mainland businesses can sell their goods and services to both corporates and end users within the Emirates markets and abroad. Mainland businesses have increased flexibility to operate across a wide range of commercial and industrial activities, giving them a competitive edge.
What are the benefits of the Mainland for business in Dubai?
The benefits for Dubai mainland businesses include access to 1000+ commercial and industrial activities, the ability to conduct business activities inside and outside the Emirates, and the possibility of 100% foreign ownership.
- 1000+ commercial and industrial activities: mainland companies can operate in 1000+ industries as per the Department of Economy and Tourism, allowing you to trade in your areas of expertise and gain a competitive advantage.
- Conduct business activities inside and outside the Emirates: mainland businesses can take on governmental contracts and trade with companies and consumers within the Emirates or internationally as per the Department of Economy and Tourism. It increases access to the less competitive markets, allowing better control of the revenues and profits.
- 100% foreign ownership: The Department of Economy and Tourism highlights 100% foreign ownership as the key benefit of a mainland business, without requiring an Emirati partner. However, specific business activities in the telecommunication, finance, defense, and travel sectors may still need sponsors.
What are the Legal Aspects of a Mainland in Dubai?
The legal aspects of Dubai Mainland include defining the legal structure of the business, drafting a memorandum of association, defining your trade name, and signing up for the relevant trade license. Business owners can have 100% ownership in a General partnership, Limited partnership, LLC, or private joint stock company as per the Department of Economy and Tourism.
Most mainland companies don’t need an Emirate national as a sponsor, owning 51% of shares, as per Federal Decree-Law No. 26 of 2020 amending Federal law of 2015. The entire ownership can stay with the foreign entrepreneur. However, exceptions may apply in some legal structures and industries, including military, defense, telecommunication, banking, and hajj and Umrah services.
The tax for mainland businesses is applied as per Article 3 of Federal Decree-Law No. 47 of 2022, which is listed below.
- 0% tax up to 375000 AED profit
- 9% incremental tax on profit exceeding 375000 AED
- A different tax is to be decided for companies meeting the criteria for pillar 2 of the OECD Project
How do you set up a Business in Mainland Dubai?
Setting up a business on the Mainland starts with identifying a market gap and deciding which industry to operate in. Next, you must select a legal form that suits your intended business operations, with 8 different options as per section 2 of the Al Wajeez guide. You must also register a trade name for your business with the Department of Economic Development and apply for initial approval.
Once approved, you will have to submit a memorandum of association, depending on your business type. Finally, select a business location, get further approvals depending on your operations, and apply for a business license. The process can be completed through the Dubai Department of Economic Development’s official website.
You’ll need copies of your essential documents, including your passport or Emirates ID, applicant’s residence permit/visa, and your company’s article of association for your business registration. These documents must be attested/translated into Arabic by the Ministry of Justice.
The disclosure requirements for public and private stock companies are more comprehensive to ensure shareholder protection. The Federal Decree Law No. (32) of 2021 contains additional documents that are required for registration of public and private limited liability companies. “The Founders Committee shall submit an incorporation application to the Competent Authority, together with the MOA and AOA of the Company, an economic feasibility study for the business venture to be established by the Company and the proposed timetable for its implementation, and such other documents as the Competent Authority may require.”
The costs of a business in the Mainland will depend on multiple factors, including your license type, visa requirements, legal structure, industry, office setup, etc. Depending on the variables and the local agent you select, the total cost starts at around 20000 AED.
How long does it take to set up a business in the Dubai Mainland?
It takes between 7-14 days to set up a company in the Dubai mainland, depending on the company’s legal structures, regulatory approvals, and permissions required. Nonetheless, a sole proprietorship or general partnership business can be set up in a shorter time (4-5 days) as less legal complexities are involved.
What are the key factors in choosing a mainland business?
The key factors for choosing a mainland business include your preferences towards ownership, liability, activity, taxation, and investment.
Liability: Your liability in the business varies based on your business structure. LLCs and limited partnerships are non-recourse structures where your liability is limited as per Article 71 of Federal Decree Law No. (32) of 2021. If a sponsor owns a share of the business, the liability between the partners is shared in their ownership proportion as per Article 53 of the same law.
Ownership: Most businesses in the Mainland allow 100% foreign ownership, which allows you to keep 100% of your business and avoid the hassle of finding an Emirati sponsor. The exceptions apply to sensitive industries mentioned earlier.
Activity: Dubai mainland allows operational and industrial flexibility for business owners by enabling them to operate in over 1000 commercial industries.
Taxation: The cost of operating a mainland business is higher than in other jurisdictions due to higher tax rate (9%), and annual rentals, whereas other zones offer tax breaks and exemptions based on activity and scale.
Investment: most mainland businesses don’t have a specific minimum capital requirement as per the Ministry of Capital, and the investment will depend on the industry you decide to operate.
Dubai Mainland Business license
A Dubai mainland business license allows an entity to carry out its commercial, industrial, and professional operations in Dubai. The licenses available for Dubai mainland businesses, as per the Department of Economy and Tourism, are listed below.
Industrial Licence: It applies to manufacturing, production, and packaging businesses.
Commercial Licence: It is applicable for buying and selling most goods and services, including import, export, and logistics.
Professional Licence: created for profession-based businesses, it is for individuals offering professional services based on their intellectual or artistic abilities.
E-trader license: it is designed for individuals selling products and services via online platforms.
Dual License: This license applies to companies in the free zone who want to extend their services to the Mainland without leasing additional office space.
Mainland Companies in Dubai
Businesses registered in Dubai Mainland, by the DED, are considered Dubai Mainland companies. Dubai allows multiple legal forms for companies, as per Section 2 of the Al Wajeez guide, to facilitate business owners.
- Limited Liability Company: an LLC has limited liability for its partners and can have up to 50 partners.
- Civil company: It is a company owned by two or more partners offering professional services, such as tailors, beauty salons, and consultancies.
- Partnership: it includes two or more partners who are jointly or separately liable for the business’s liabilities.
- A limited partnership is a similar setting to a partnership except the liability of the partners is limited to their capital involved in the business.
- Sole proprietorship refers to a single person owning a business and being personally liable for financial obligations and liabilities.
- One-Person Limited Liability Company: it allows a single person, whether natural or legal, to establish a limited liability entity to protect against liabilities.
- Joint-stock company: It is a company in which each share represents a nominal value, and shares are divided amongst partners to define their ownership of the company. It has limited liability.
- Private shareholding refers to owning shares of a joint-stock company, which represents your proportionate claim to the business.
Mainland Visa in Dubai, Types, Cost, and Duration
The types of Dubai mainland visas are listed below.
- Golden visa with 10 years of residence
- Investor visa with 2-year validity
- Employee visa: validity varies depending on the employment contract
- Green visa: for freelancers and skilled professionals with a five-year validity.
- Dependent visa.
The cost of an investor visa starts at around 4000 AED and can increase to over 10000 AED depending on the validity and type of visa as per the General Directorate of Residency and Foreigners Affairs (GDRFA). The cost of a green visa can vary between 1000 and 6000 AED, depending on the circumstances. The process for each Dubai mainland visa will vary.
Business Opportunities in Dubai Mainland
Business opportunities in Dubai mainland have increased significantly for companies, employees, and marketers. Real estate, health care, finance, and supply chain industries offer the most potential for economic activities on the Mainland. The GDRFA has designed golden visas, green visas, blue visas, and investor visas to facilitate business owners, employees, and remote workers.
Opportunities for companies in Mainland
Opportunities exist for Dubai mainland companies in multiple sectors, including Real estate, healthcare, finance, supply chain, logistics, tourism and more. Dubai’s strategic location and ports give mainland businesses access to less competitive markets in the Emirates and abroad. Your business choice on the Mainland eventually depends on your marketing needs and industrial expertise.
Opportunities for employees in Mainland
The opportunities for employees are also increasing due to the booming business environment. Glassdoor, a leading job portal, contains over 40,000 job openings for employees in Dubai mainland. These jobs range from office drivers, servers, and assistants to more high-profile employment opportunities for experienced individuals.
The salaries listed for the jobs start at 3000 AED and go higher as professional requirements increase. Skilled individuals and freelancers, looking to operate in Dubai’s Mainland, can also apply for a green visa. A virtual work visa with a one-year validity is also available for remote workers working with mainland businesses.
Opportunities for marketers in Mainland
Business growth has also ignited the demand for expert marketers in Dubai mainland, with more than 5,000 jobs open on Indeed. According to Glassdoor, a leading employment portal, the average monthly salary for marketers is 7450 AED, with a total pay of around 8175 AED (Source). The job listings include various skills required for successfully carrying out the marketing role, including knowledge about effective marketing strategies, social media platforms, and upcoming AI trends.
What makes Mainland a better choice for X businesses?
Dubai mainland is a better choice for companies, freelancers, marketers, and general employees due to its flexibility in business operations and ability to sell to the local population.
The business licenses, legal structures, and flexibility of operations encourage businesses, investors, and freelancers to expand their business and reach premium audiences. With access to over 1000 industrial operations, 100% ownership, and a commercial audience, Dubai mainland offers an exciting opportunity for foreigners interested in economic activities within the Emirates.
What are the Differences between Dubai Mainland and Dubai Free Zones?
The key differences between the Dubai mainland and Dubai free zones include cost, ownership, and access to markets.
| Free Zone | Dubai Mainland | |
| Cost | Free zone businesses often get tax exemptions and tax breaks from the government for meeting the set criteria as per article 3.1 of Free Zone Person guide by Federal tax authority. However, a minimum capital requirement may be imposed to encourage higher investment | Dubai mainland businesses have higher operational costs and are liable to pay 9% tax for profits exceeding 375000. |
| Ownership | Dubai offers 20 free zones where foreigners and ex-pats can own 100% of their business. | For Dubai Mainland companies, 100% foreign ownership is possible in most sectors; however, certain industries, such as defense, military, banking, and travel, have restrictions, requiring the involvement of a local sponsor. |
| Markets | While free zones provide support in specific sectors, a free zone company can’t sell within the Emirates to an end user without a mainland license as per the article 10.14.1 of Free Zone Person guide by Federal tax authority. | Mainland businesses are allowed to sell in both domestic and foreign markets. |
The difference between Dubai Mainland and free zones primarily arises due to the audience they cater to. Your investment choice should depend on your investment, business operations, and ownership preferences.
Legal Aspects of business between Dubai Mainland and Dubai Free zones
The legal aspects between mainland businesses and free zone businesses differ in taxation and regulating bodies.
Dubai offers about 20+ economic free zones that specialize in and support specific industries as per the Department of Economy and Tourism. Hence, the taxation in a free zone will vary depending on a business’s operations, capital, production, and other factors based on the criterion specified for the jurisdiction. In contrast, mainland businesses comply with the 9% corporate tax rate levied on profits exceeding 375000 AED.
While the Department of Economic Development regulates the Dubai mainland, there is no single overarching body for free zones, and the regulating body will depend on the jurisdiction under discussion. The Free Zones Authority (FZA) manages the licensing, registration, and compliance procedures in the free zones, while the DDA (Dubai Development Authority) is more involved in urban development in the region. For Dubai mainland, the DED regulates and monitors the business and legal aspects of commercial entities operating in the area.
Future Plan and Developments in Dubai Mainland
The Emirates government’s future plans for Dubai’s mainland involve digitalization and the integration of Artificial intelligence to attract foreign and local investment as per the Department of Economy and Tourism. His Highness, Sheikh Mohammed bin Rashid, revealed the new economic agenda, ‘D33’, which focuses on innovative projects to drive sustainable growth and double GDP by 2033.
The D33 agenda highlights the government’s aim to invest in human development and advanced technology to boost Dubai’s international competitiveness. The emphasis on digital goals will spur growth in artificial intelligence and its integration on a broad scale, boosting businesses in the region.
Dubai Mainland Impacts on UAE Economy.
Dubai mainland is designed to boost business activity in the UAE region and has assisted the UAE’s unparalleled growth. Over 90,000 new businesses were launched in Dubai between Jan-Jul 2023 alone, as per the Department of Economy and Tourism, highlighting investor confidence in the region. Dubai Mainland also hosts 90% of the scale-ups launched in the UAE, making Dubai a crucial part of the UAE economy.
Dubai-based investors can access over $8.3 trillion of private wealth, highlighting the region’s future potential. ECN reports the combined economic growth for Middle East and African regions will approximate 27% in 2027, while the USA and UK will grow by only half the rate.
What are the Disadvantages of Dubai Mainland?
The disadvantages for Dubai mainland businesses include stringent taxation that leads to additional costs for the company. The set-up and operational costs for mainland businesses are usually higher due to higher rental expenses, and costs of general amenities. For instance, in Business Bay Dubai, on average, a square foot will cost 180 AED in yearly rental as per PropertyFinder– a global property marketplace. On the contrary, the same website lists an average rental of 100 AED per annum for free zone office spaces.
What Makes Dubai Mainland Stand Out in UAE?
Dubai mainland stands out from other regions in the UAE due to its unparalleled opportunity for businesses to tap into a fast-growing regional market. The city hosts a pool of 40,000 experts with expertise ranging from health care to finance and logistics as per the Department of Economy and Tourism.
Dubai ranks 1st in the region and 14th worldwide on the Innovation Cities Index, highlighting its standing as a global economic powerhouse. With D33 in function, Dubai is expected to grow further and at a higher pace, making it a high-prospect market.
Do I need local sponsorship for a Mainland company in Dubai?
No, most mainland companies in Dubai don’t need a local sponsor. However, specific industries may still require contributions from a local partner, including security and defense activities, telecommunication, banks, exchange, financing, insurance, and commercial agencies.
