Mainland UAE entities are licensed by the relevant emirate’s Department of Economic Development (DED) and such entities are governed by the UAE Civil Code or the Federal Law No. 2 of 2015 concerning Commercial Companies. The chief advantage of mainland company setup is that there are no territorial restrictions on carrying out its business activities (unlike free zone or offshore companies) and, as such, an office may be set up in any part of the emirate in which the company is registered.

The presence of a UAE National is mandatory in all mainland licenses either as a Local Partner or a Local Service Agent. Local Partner/service agent is responsible for signing all government applications, while the expat partner can be solely  in control for business operations with no input from the Local Partner/Service Agent unless agreed.

There are some business activities which are regulated, and therefore require prior approvals by the respective governmental authorities. These include; RERA (Real Estate Regulatory Authority) for all Real Estate and Developers related licenses, KHDA (Knowledge and Human Development Authority) for all Education related licenses, DHA (Dubai Health Authority) for all Hospitals, Clinics and other medical related licenses, etc.

Types of Licenses:

Commercial License – this license allows a company to trade in all legally tradable goods.

Industrial License – this license allows a company to engage in manufacturing activity or other types of industrial activities.

Professional License – this license allows the individuals or groups that would like to offer their expertise as services to the general public.

Types of companies:

Some of the different forms of mainland or DED licensed entities are as follows:

  • 100% owned by one individual.
  • Trade license issued in his or her own name and should be related to the commercial activity of the firm..
  • The individual owner will have 100% control all of its operations and the liability is unlimited.
  • Can appoint one manager only as per DED business regulations.

Activities:

  • An industrial or commercial type – can be owned only by UAE Nationals or GCC Nationals.
  • Sole proprietorship with consultancy activities must possess relevant qualification for the selected activity.​
  • Certain professional activities that go with this legal form can be practiced only by UAE nationals. ​

Owner(s):

  • A professional-type sole proprietorship can be owned by an individual of any nationality.
  • If the owner is a National of a country other than the UAE or GCC, they require a ​Local ​Service Agent (Wakeel E Khidhmat)
  • A corporate body cannot own a sole proprietorship.

Capital:

  • A business capital is not required for a sole proprietorship.

Branch(es):

  • A sole proprietorship can have more than one branch. Each may undertake one or all of the activities included in the main business license.
  • A sole proprietorship cannot have a branch outside Dubai. ​​
  • 100% owned by one natural or one corporate body.
  • A local/GCC person or corporate body can establish and own a one person company (LLC).
  • Similar to the sole-proprietorship but liability is limited to the single partner’s share whereas in the sole-proprietorship liability is unlimited.

Activities:

  • The activities are according to the procedures.

Owner(s):

  • A natural person (UAE national, or a decree holder as per the procedures, or GCC national).
  • A corporate body (UAE or GCC establishment and 100 % owned by UAE or GCC nationals).
  • The license owner is called a shareholder.

Manager(s):

  • At least one and up to 11 managers should be appointed in the license.
  • The manager can be of any nationality (according to the procedures).

Capital:

  • The capital of the company is determined in the memorandum of association only.

Trade Name:

  • The trade name should be identical to its owner’s name followed by one person and ending with LLC.
  • The trade name should follow its legal form and should be fully mentioned “one person co.”
  • Business partnership for professionals in recognised fields such as doctors, lawyers, engineers and accountants.

 

Activities:

  • ​​Partners of any nationality can practice professional activities in accordance with DED business regulations.

Owner(s):

  • ​​If the owner is a National of a country other than the UAE or GCC, they require a ​Local ​Service Agent (In Arabic it is called Wakeel E Khidhmat)
  • A foreign company can be a partner, as long as the foreign company is in the same profession as the civil company.
  • For Engineeringactivity , must have one partner who is a UAE National, who owns no less than 51% of the business and must be an engineer of the same type as the business’s activity.
  • For consultancy activities,  100% to be owned by professional partners of the same type as the business’s activity.

Manager(s):

  • Can appoint only one manager.

Capital:

  • The capital shouldn’t be specified but mentioned in the Memorandum of Association.

Trade Name:

  • The trade name should be consistent and in proportion with the commercial activity of the firm.

Branch(es):

  • Can have more than one branch and each may undertake one or all of the activities included in the main business license.
  • Must have between 2-50 shareholders.
  • Each partner is liable only to the extent of his or her share in the capital of the company.
  • Except for public shareholding company, an LLC can be changed to any other legal form.​

Activities:

  • LLCs can practice any industrial, commercial, professional or tourism activity.
  • Some professional activities are excluded and other require approvals of authorities that regulate these activities.

Owner(s):

  • ​​​51% to be owned by UAE Nationals, and can be owed 100% by GCC nationals.
  • Can be both Individual and corporate partners.

 

Manager(s):

  • Can have between 1-11 managers for the business which can also be selected from the partners.
  • Has full powers of administration and within the scope of his or her powers, the manager’s actions and commitments are binding to the business.

Capital:

  • The capital shouldn’t be specified but mentioned in the Memorandum of Association.
  • Shares of an LLC cannot be offered to the public.

Trade Name:

  • A limited liability company shall have a name derived from its activity or from the name of one or more partners.
  • The term “with limited liability” shall be annexed to the company’s name.

Branch(es):

  • Can have more than one branch. Each may undertake one or all of the activities included in the main business license.
  • A Private Shareholding Company (Private Joint-Stock Company) is a partnership of 2-200 individuals.

 

Activities:

  • Can have any commercial or industrial type of business except professional activities.
  • Ministry of Economy approval required to establish a private shareholding company.

Owner(s):

  • Can be owned by partners of any nationality.
  • Corporate body can also be partner.
  • 51% to be owned by UAE Nationals, and can be owed 100% by GCC nationals.

Capital:

  • Minimum capital of AED 5,000,000.

Trade Name:

  • The trade name should be consistent and in proportion with the commercial activity of the firm.
  • Should include one or more of the partners’ names and followed by the phrase “Private Shareholding Company”.

Branch(es):

  • ​The company can have more than one branch. Each may undertake one or all of the activities included in the main business license.
  • A Public Share Holding Company is a company whose capital is divided into transferable shares of equal value.

 

Activities:

  • Can practice any industrial, commercial or professional business activities.

 

Owner(s):

  • Can be owned by partners of any nationality
  • A corporate body can own shares in a public shareholding company.
  • Must have at least 5 founding members who are UAE Nationals, owning between 30% and 70% of the capital shares.

Manager(s):

  • Must have maximum 5 appointed managers.

Capital:

  • Minimum capital of AED 30,000,000.

 

Trade Name:

  • Cannot include the name of any of the shareholders, with the exception of patents registered in the name of a shareholder or if the business uses a store that has the name of a shareholder.
  • The phrase “Public Shareholding Company” must be included in the business name. ​

Branch(es):

Can have more than one branch and can undertake one or all of the activities included in the main business license.

  • Should have minimum two partners – one general partner and one limited partner.
  • The general partners are liable for the company’s liabilities to the extent of all their personal and business assets; the limited partners are liable for a share of company liabilities equal to their share of the company capital.

 

Activities:

  • Can conduct commercial and industrial activities only.

 

Owner(s):

  • Must have UAE Nationals as general partners; Nationals of other countries can be limited partners.
  • Each general partner and limited partner can own any amount of share of the business.
  • A limited partner may not intervene in management or administrative issues related to the other partners. If he or she does so, that limited partner shall be responsible for all the business’s obligations.

Trade Name:

  • ​​​Should be that of one or more of the general partners, with an addition noting that this is a company name.
  • Can also have a special trade name.
  • The name of any limited partner should not be mentioned in the name of the company.

Branch(es):

Can have more than one branch and can undertake one or all of the activities included in the main business license.

  • It is a single business where two or more people share ownership.
  • Each partner contributes to all aspects of the business and must administer the company unless a contract assigns administration to one partner or to another party.

Activities:

  • Can conduct commercial and industrial activities only.

​Owner(s):

  • The shares of the company must be 100% owned by UAE Nationals and cannot be offered to the public or represented in negotiable certificates.
  • Cannot be owned by GCC nationals and/or any corporate body.
  • The owners of the partnership company are jointly and severally responsible for the company’s liabilities.

Trade Name:

  • ​​​Must contain the name of one or more of the partners, with the addition of a word signifying that it is the name of a business.

 

​Manager(s):

  • ​​Can appoint one manager only.

 

Branch(es):

​​​ Can have more than one branch and can undertake one or all of the activities included in the main business license.

  • Licensed by Department of Economic Development and regulated by Ministry of Economy.
  • It represents the parent company and carries on business under its name.
  • Can promote and market the products of the parent company, enter into transactions and conclude agreements in the name of the parent company, and offer services to its customers

 

Activities:

  • Can practice professional activities and some commercial and industrial activities.
  • Approval from Ministry of Economy is required for practicing commercial and industrial activities.

 

Owner(s):

  • ​​100% owned by the parent company, operate under the same name and conduct the same business as the parent company.
  • Requires a Local Service Agent (Wakeel E Khidmat), who can be a UAE National or a company owned by one or more UAE Nationals.
  • The duties of Local Service Agent to the company is limited to rendering the service necessary to the company without undertaking financial liability in respect of the business or activity of the company in the UAE or abroad; nor can he claim any rights or authority in the business of the company.

Manager(s):

  • ​​Must have a manager to represent the company and to open the branch, appointed by the Board of Directors. ​
  • A representative office is not permitted to earn profits within the UAE and the activities it may undertake in the UAE are limited to marketing and/or promoting its foreign parent company products and services.
  • A Representative Office requires a Local Service Agent (in Arabic it is called Wakeel E Khidmat), who can be a UAE National or a company owned by one or more UAE Nationals.
  • the role of the agent is restricted to administrative functions such as the obtaining of licenses, permits, visas etc, in return for a fee.
  • Licensed by Department of Economic Development and regulated by Ministry of Economy.

Activities:

  • Must undertake one or all of the activities included in the main company license.
  • For a company with multiple branches, each branch can undertake different activities as long as they were all included in the original license for the main company.

Owner(s):

  • Must be 100% owned by the parent company.

Manager(s):

  • Should appoint a branch manager.

Capital:

  • Not required.

Trade Name:

  • Must be identical to the trade name of the parent company.
  • The trade name of a branch can be different from the trade name of the parent company provided that the trade name of the branch includes the phrase “a branch of the parent company name” and the legal form of the parent company (e.g.: a branch of ABC Company LLC).

Activities:

  • Must undertake one or all of the activities included in the main company license.
  • For a company with multiple branches, each branch can undertake different activities, as long as they were all included in the original license for the main company

Owner(s):

  • Must be 100% owned by the parent company.

Trade Name:

  • ​​​The trade name of the branch must be identical to the trade name of the parent company.
  • The trade name of the parent company must be changed in case the same name previously registered in Dubai.​​

Activities:

  • Must undertake one or all of the activities included in the main company license.
  • For a company with multiple branches, each branch can undertake different activities, as long as they were all included in the original license for the main company.
  • While other GCC countries may follow different rules in terms of combining activities, for Dubai branch licenses, only activities of the same group will be accepted, even if other activities are registered in the GCC main company

Owner(s):

  • Must be 100% owned by the parent company

Trade Name:

  • ​Must be identical to the trade name of the parent co​​mpany.
  • Must be changed in case the same name previously registered in Dubai.​​

Activities:

  • Cannot carry out activities like Trading, Commercial Agencies, Labor Supply Services or; Restaurants.
  • Companies in freezone (not as a branch of a foreign company), can obtain a branch license from DED to expand their operations to mainland Dubai.

Owner(s):

  • Local shareholders is mandatory in the main company with minimum 51% shareholding.
  • If the local shareholder in the main company owns less than 51% of the shares, approval from Ministry of Economy is required and also needs to appoint Local service agent.
  • For Companies owned 100% by GCC nationals do not need a local service agent.
  • Can only be set up by UAE Nationals.
  • Can conduct almost any type of professional, trade or artisan business.
  • The business must be reasonable for operation in a residential environment.
  • Should not harm the environment or the health of any person and should not generate noise or other irritants that could negatively impact neighbours.
  • Can take the following legal forms: Sole Establishment, LLC, Civil Company and Partnership.
  • Cannot sponsor employees.

 

Activities:

  • Each person can have only one commercial or professional Intelaq license but can operate more than one related activity under this license.

Owner(s):

  • 100% UAE National owned.

Does not allow to appoint employees or staff but may engage contractors.

Company Formation in Dubai Mainland can be a very challenging and time-consuming task. Fichte & Co. Legal offers specialist expert advice and services for mainland company setup and incorporation across all emirates of the UAE.

For more information or enquiries, email us at companysetup@fichtelegal.com

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Mainland Company Setup was last modified: October 24th, 2018 by Fichte Legal