Starting a business in the United Arab Emirates (UAE) mainland can be a lucrative venture for entrepreneurs looking to tap into the region’s growing economy. With its strategic location, world-class infrastructure, and business-friendly policies, the UAE offers an attractive business environment for both local and international investors. However, before you jump into the world of entrepreneurship, it’s essential to understand the UAE’s business landscape and the necessary steps to set up a business in the mainland.
In this article, we will explore everything you need to know about starting a business in the UAE mainland, from the legal requirements to the benefits and challenges of doing business in the region.
Understanding the UAE Mainland
The UAE mainland refers to the region outside the free zones where companies are subject to the UAE Commercial Companies Law. Companies operating in the mainland are required to have a UAE national as a majority shareholder with at least 51% ownership. The local sponsor, also known as a UAE national partner or service agent, will hold the 51% ownership while the foreign investor owns the remaining 49%.
Benefits of Setting up a Business in the UAE Mainland
There are several benefits of setting up a business in the UAE mainland, including:
- a) Access to the local market: Companies operating in the mainland have access to the UAE’s domestic market, which has a high purchasing power and demand for goods and services.
- b) No restrictions on the type of business activities: Companies in the mainland can engage in any legal business activity, unlike free zones, which have specific activity restrictions.
- c) Lower setup costs: Setting up a business in the mainland is relatively cheaper compared to free zones, which require high capital investments.
- d) Business-friendly policies: The UAE government has implemented several business-friendly policies to attract foreign investment, including tax exemptions and streamlined registration processes.
Legal Requirements for Setting up a Business in the UAE Mainland
To set up a business in the UAE mainland, you need to follow specific legal requirements, including:
- a) Finding a local sponsor: As mentioned earlier, companies operating in the mainland are required to have a local sponsor who holds 51% ownership. You can find a sponsor through a reliable agent or business setup service provider.
- b) Choosing a business activity: You need to choose a business activity and obtain the necessary licenses and permits from the relevant government authorities.
- c) Registering your company: You need to register your company with the Department of Economic Development (DED) in the emirate where you wish to operate.
- d) Obtaining visas: Companies in the mainland can sponsor their employees for visas, and the process varies depending on the employee’s job position.
Challenges of Setting up a Business in the UAE Mainland
While setting up a business in the UAE mainland has several benefits, there are also some challenges to consider, including:
- a) The requirement for a local sponsor: Having a local sponsor means giving up a significant portion of ownership and control over the business.
- b) Cultural differences: Doing business in the UAE may require some cultural adjustments for foreign investors, including language barriers and different business customs.
- c) Competition: The UAE mainland has a highly competitive business environment, with numerous companies operating in various industries.
Starting a business in the UAE mainland can be a lucrative venture for entrepreneurs looking to tap into the region’s growing economy. However, it’s essential to understand the legal requirements and challenges of doing business in the region. By following the necessary steps and partnering with a reliable local sponsor, you can set up a successful business in the UAE mainland and take advantage of the numerous benefits it offers.