The UAE is renowned for its business-friendly environment, offering entrepreneurs and companies a variety of options for setting up their businesses. Mainland businesses are licensed by the Department of Economic Development (DED) in each emirate and are subject to UAE commercial laws and regulations. In this blog, we will explore what a mainland business in the UAE entails, its key features, and the benefits of choosing this business structure for your venture.
What is a Mainland Business?
A mainland business, also referred to as an onshore company, is a company that is registered with the DED of the respective emirate where it operates. Unlike free zone businesses, which are restricted to operating within the boundaries of their respective zones or conducting international business, mainland companies can trade and provide services throughout the UAE market as well as abroad.
No Restrictions on Business
Activities Mainland businesses are allowed to conduct a wide range of activities, including commercial, professional, and industrial ventures.
Freedom to Trade Across the UAE
Unlike free zone companies, which are limited to operating within their designated zones, mainland businesses can tap into the broader UAE market, dealing with government entities and local companies directly.
100% Foreign Ownership
Historically, mainland businesses required a local sponsor, who would own 51% of the company’s shares. However, with the 2021 amendment to the UAE Commercial Companies Law, many business activities now allow 100% foreign ownership, eliminating the need for a local sponsor.
Physical Office Space Requirement
One of the requirements for mainland businesses is to have a physical office space within the UAE. The size of the office space is typically determined by the nature of the business.
Access to Government
Contracts Mainland companies have the unique benefit of being eligible to bid for and work on government contracts and tenders. Free zone companies, in contrast, do not have access to these opportunities.
Wider Business Scope
Mainland businesses can expand their reach beyond the UAE and engage in international trade. There are no geographical restrictions on where these companies can operate, giving them more flexibility to explore global markets.
Wrapping Up
A mainland business in the UAE offers numerous benefits, including unrestricted access to the local market, eligibility for government contracts, and full foreign ownership in specific sectors. Whether you are starting a service-based company, a trading enterprise, or looking to tap into government contracts, a mainland business provides the flexibility and opportunities to grow and succeed in one of the world’s most dynamic markets.
