Dubai is a great place to start a business, offering plenty of growth opportunities. Setting up a mainland business in Dubai lets you trade freely and benefit from strong infrastructure. However, understanding the legal rules is important to avoid problems.
Here are some key things to know before you start.
1. Choosing the Right Business Type and Getting a License
Picking the right business structure is important. You can choose from different types like a sole proprietorship, limited liability company (LLC), civil company, or a branch of a foreign company. An LLC is the most popular choice because of its flexibility and legal benefits.
You must also get a trade license from the Department of Economy and Tourism (DET). The type of license depends on your business activities—commercial, professional, or industrial.
2. Local Sponsorship Rules
Earlier, foreign investors needed a UAE national to own 51% of their business in an LLC. But now, many businesses can have 100% foreign ownership. It’s best to check if this applies to your industry before proceeding.
3. Office Space Requirements
A mainland business in Dubai must have a physical office. Virtual offices are not allowed. The office should meet government requirements and match the activities in your trade license.
4. Following Labor Laws
If you hire employees, you must follow UAE labor laws. This includes rules about work hours, contracts, salaries, and end-of-service benefits. You also need to register employees with the Ministry of Human Resources and Emiratisation (MOHRE) and arrange their work visas.
5. Understanding Taxes and VAT
Dubai has a business-friendly tax system, but some businesses must register for Value Added Tax (VAT). If your company earns more than AED 375,000 a year, VAT registration with the Federal Tax Authority (FTA) is required. Keeping proper financial records is also important for tax compliance.
6. Preparing Legal Documents
Having the right paperwork helps prevent future problems. Key documents include the Memorandum of Association (MOA), shareholder agreements, office lease contracts, and any agreements with clients or suppliers.
7. Protecting Your Business Name and Brand
To prevent others from using your business name, logo, or products, you should register trademarks, patents, and copyrights with the UAE Ministry of Economy.
8. Meeting Industry-Specific Rules
Some businesses need extra approvals. For example, healthcare businesses need clearance from the Dubai Health Authority (DHA), and financial companies must follow rules set by the Dubai Financial Services Authority (DFSA). Knowing the specific rules for your industry will help you stay compliant.
Final Thoughts
Starting a mainland business in Dubai is a great opportunity, but it’s important to follow the legal steps properly. Partnering with a trusted consultancy can simplify the process and ensure compliance with all regulations.
Getting help from a business consultant or legal expert can make the process easier. By understanding these rules, you can build a successful and legally compliant business in Dubai.Need help with business setup in Dubai? QuickPlus Business Consultancy is here to guide you every step of the way. Contact us today for expert assistance and hassle-free company formation!