In the United Arab Emirates, Dubai offers various legal structures to start a business. The two primary business structures are Mainland and Free Zones, and investors or entrepreneurs can choose their structure as per their business needs. The local government has introduced several schemes to make company formation in Dubai a very simple and hassle-free process. Keeping the interest of foreign investors in mind, Dubai introduced free zones that allow 100% ownership to the investors. The free zones are ideal for expatriates as the business setup rules and regulations are simpler than those of the mainland. However, Dubai mainland has recently announced 100% ownership to foreign investors in particular businesses. But, there are several commercial activities where investors will need a local partner to start a business in Dubai.
Necessary Rules to Start Business in Dubai Mainland
The local government sets many rules and regulations to incorporate a business in Dubai (UAE). Therefore, entrepreneurs or business owners need to adhere to each and every rule before they may register a company in the mainland of Dubai. Apart from all the necessary documents that are mandatory to establish a company in Dubai, one of the essentials is the presence of a local sponsor in Dubai or the association of a partnership with an Emirati citizen.
Terms of Starting a Business in Dubai Mainland
Starting a business in the United Arab Emirates (UAE) or obtaining a Dubai mainland (DED) license is possible with the support of commercial companies law in the region. The law requires businesses to partner or team with a local Emirati partner who holds a minimum of 51% ownership within the company. However, all necessary details of the UAE national Emirati partner should be submitted for validation along with other papers essential for the procedure. It is an additional requirement for initial company formation approval on the Dubai mainland. Consequently, it is believed that no company can be established on the Dubai mainland without the support of a local partner.
Though local partners are least involved with the business, they are very helpful in managing local bodies and authorities’ permissions and approvals. Usually, no local partner interferes in any of the business matters. On the contrary, the partnership helps the companies with many local issues.
New Commercial Law Allows 100% Ownership to Dubai Mainland Companies
However, there are certain business activities that are allowed to operate with 100% ownership on the Dubai mainland. In June 2021, the UAE government made some key changes in their commercial law, allowing any legal and natural person to establish and own 100% of their companies in the UAE, regardless of nationality. Please consult a professional and experienced business setup consultant to understand it in detail and what are the activities allowed.
Starting a Company in Dubai (UAE)
Starting a company on the mainland in Dubai may look very complicated. But if you hold all the necessary documents and have no criminal records, the process becomes very smooth. Be it business formation and registration or any other method, each criterion differs based on the firm’s ownership structure. All commercial activities on the Dubai mainland are governed by a set of rules that businesses need to comply with. Nonetheless, when you decide to consult with a professional business setup consultant in Dubai, every complicated process will become easy and straightforward for you.
Above, in the article, you will find when and where local Emirati partners are necessary. However, the rule of hiring a local sponsor to start a business in Dubai is not required in all structures. A business setup company in Dubai can help you understand the process and requirements in detail.