Setting up a mainland company in the UAE involves steering specific legal requirements designed to regulate business activities and ensure compliance with local laws. Understanding these requirements is vital for entrepreneurs aiming to establish a presence outside of the UAE free zones. Here’s an exploration of the legal requirements for mainland company setup Dubai:

Local partner requirement:

One of the fundamental requirements for mainland companies is the involvement of a local partner who holds at least 51% of the company’s shares. This local partner can be an individual or a corporate entity but must be a UAE national or a company wholly owned by UAE nationals. The local partner’s role extends beyond ownership to influencing decision-making and operational aspects of the company.

Business activity restrictions:

Mainland companies must adhere to the UAE’s regulations regarding permissible business activities. Certain sectors, such as oil and gas exploration, defense, and banking, may require special approvals or licenses from relevant authorities. It’s essential to clearly define and specify the intended business activities to ensure compliance with local laws and regulations.

Legal structure options:

Entrepreneurs have several legal structures to choose from when setting up a mainland company, including Limited Liability Company (LLC), Public Joint Stock Company (PJSC), and Private Joint Stock Company (PrJSC). Each structure has specific requirements concerning minimum share capital, number of shareholders, and governance regulations. Selecting the appropriate structure depends on factors such as business objectives, shareholder preferences, and regulatory considerations.

Licensing and permitting:

Obtaining the necessary licenses and permits is an important step in the mainland company setup process. The Department of Economic Development (DED) or relevant local authorities oversee the issuance of business licenses based on the nature of the business activities. Applications typically require submission of detailed business plans, passport copies of shareholders and directors, lease agreements for office premises, and proof of initial capital investment.

Compliance with corporate governance:

Mainland companies are subject to stringent corporate governance requirements aimed at promoting transparency, accountability, and ethical business practices. This includes maintaining accurate financial records, conducting regular audits, and complying with local tax regulations. Adhering to corporate governance standards ensures legal compliance and also improves credibility and trustworthiness in the marketplace.