Key Considerations for Foreign Investors for Mainland Company Setup in Dubai
With a vibrant economy, prime location, and business-friendly policies, Dubai has continued to attract foreign investors. Planning to establish a mainland company in Dubai is, therefore, an opportunity for international business people to consider. This article provides foreign investors with the essential factors to consider for a Mainland company setup in Dubai.
Regulatory Environment and Legal Framework:
The regulatory environment and legal regime around the main company setup are vital factors for foreign investors to consider. The Department of Economic Development is the regulating authority whose docket involves issuing licenses to conduct business in Dubai. As such, foreign investors are encouraged to familiarize themselves with the laws, regulations, and procedures concerning establishing a company in Dubai.
Local Sponsorship Requirement:
One of the features that diverse mainland businesses set up from free zone entities in Dubai is the need for local sponsorship. Foreign investors are required to have a local sponsor – a UAE national or a company wholly owned by UAE citizens. In most cases, the local sponsor will only be a minority shareholder and may not be directly involved in daily business operations. However, it would help if you allowed the local sponsor to take care of the licensing process and liaise with the public regulatory bodies.
Business Activities and License Type:
The nature of your business activities will help you determine the type of license your mainland company should have. The DED offers several categories of licenses, including commercial, professional, and industrial licenses, and your company should conform to one of them. Therefore, foreign investors should first determine the types of activity they are allowed to conduct and obtain a license parallel to the law.
Ownership Structure and Shareholding:
Another critical factor that foreign investors must consider when establishing mainland companies in Dubai is the ownership structure and shareholding requirements. Although mainland companies must have a local sponsor’s ownership, foreign investors can determine the shareholding structure and ownership ratios between the shareholders according to the UAE Commercial Companies Law. Therefore, understanding the implications of the shareholding arrangement and adhering to the commercial law requirements can positively influence the setup process positively.
Office space and location
Mainland companies must have a physical office located in Dubai, which will be their headquarters and facilitate their daily enterprise operations. Therefore, foreign investors must consider the location, price, and size that suits their needs in the Dubai market. Furthermore, the office location must be aligned with the council regulations and secured by attaining the necessary permits.
Visa and immigration requirements:
Overseas investors and their employees might need a UAE residence visa to work and live in Dubai. Therefore, foreign investors should acquire knowledge of the visa and immigration process, including the eligibility requirements, the required documents, and the period of processing time. In addition, working with a professional visa service provider can ease the documentation process and meet the law requirements.