Are you thinking about starting a business in Dubai? The first step you need to take is ensure you understand the Dubai mainland company formation cost. Mainland companies provide full access to markets across the UAE and abroad. This makes them a very popular choice among entrepreneurs who are looking for flexibility, scalability, and credibility. In this guide, we will explain what a mainland company is, factors that can impact the setup cost, and provide you with budgeting tips for long-term success.
What is a Dubai mainland company?
Dubai mainland companies are registered with the Department of Economic Development (DED). Mainland companies can legally operate anywhere in the UAE, unlike free zone companies and offshore companies that are considerably more restricted. Dubai mainland companies can engage in trade activities with the local market as well as the government.
It is important to understand the difference between mainland, free zone, and offshore companies.
- Mainland: Has full trading rights across the UAE. Certain business activities may still require a local sponsor or service agent. It is a good choice for businesses that have long-term trading goals in Dubai and plan to diversify their local operations in the future.
- Free zone: Entities founded in a designated zone. 100% foreign ownership is allowed. Business operations are restricted to the zone and international markets. Preferred by startups and operations that are focussed on exports or a niche industry.
- Offshore: Local trade is not allowed. This is the top option for an entrepreneur focusing on international business, asset protection, or wealth management. It is also popular among investors who value their privacy and want minimal reporting during asset management and global transactions.
Mainland companies remain the most popular choice among business owners and investors thanks to their market access, flexible operations, and local engagement.
Dubai mainland company formation cost
It can cost anywhere from AED 15,000 to AED 50,000 to start a mainland company in Dubai. There are a number of things that can increase the total cost of setting up your business. This includes the license type and legal business structure, how much office space you need, visa requirements, and secondary approvals.
Key benefits of setting up a mainland company in Dubai
There are many benefits to setting up a mainland company for both investors and entrepreneurs:
Unrestricted market access: Mainland companies can legally trade freely across the UAE and globally. Trading without geographical restrictions provides a business with easy access to local and international markets.
100% ownership: Thanks to recent reforms, 100% foreign ownership is now allowed across most industry sectors. This gives entrepreneurs full control over their businesses and maximises their return on investment.
Access to government contracts: In addition to operating in the local market, mainland companies can boost their credibility and revenue by bidding on attractive government projects.
Flexible locations: Mainland companies can set up offices anywhere in Dubai. This flexibility makes it possible to conveniently locate your business close to your target market.
Visa benefits: The size of your office space will determine how many employee visas you can apply for. This benefit can help you increase your workforce and scale your business.
No currency restrictions: Mainland companies offer considerable financial freedom. You can effortlessly move money to other countries without any restrictions.
Good reputation and growth: Being registered with the DED enhances a business’s reputation and increases its longevity as it portrays credibility and trust to clients, business partners and investors.
What influences the cost of a mainland company in Dubai?
There are several things that can influence the cost of a mainland company in Dubai.
- Type of Business Activity: Commercial, professional, tourism and industrial licenses all have different base fees and other requirements they have to adhere to.
- Legal Structure: Certain structures cost more to establish than others. Sole proprietorships are cheaper to establish than LLCs that have to follow more legal and administrative processes.
- Local Service Agent (LSA): You might be required to enlist the services of an Emirati service agent when setting up your business. Depending on the agent you choose, this could turn out to be an expensive exercise.
- Office Space Requirements: If you start a mainland business you have to be prepared to lease physical office space. How big the space is and where it is located will impact the cost.
- Additional Approvals: If you operate within a regulated sector such as transport, healthcare, and legal services, additional external approvals may be required. This will increase your overall expenses.
Cost breakdown for Dubai mainland company formation
There are five things an entrepreneur must plan for when establishing a Dubai mainland company:
Trade license fees – These costs are determined by the chosen business activity and license type. This is the main ongoing expense for legally operating a business in Dubai.
Initial approval costs – An initial approval from the DED is required before continuing with the rest of your business setup. The exact cost will be determined by the activity but typically ranges between AED 200-500.
Office rent and Ejari – Mainland companies require a physical office space. Leases are formalized by the Ejari registration. The exact costs depend on the size and location of the office but is usually in the region of AED 200-400.
Sponsorship or local service agent fees – Some businesses may need a UAE national sponsor or service agent. These costs are determined by the nature of the agreement.
Government and administrative charges – These fees include the reservation of your trade name, approvals, MOA notarization (where applicable), and yearly renewals. The combined fee can range anywhere between AED 2,000-5,000.
How to reduce your Dubai mainland company formation costs
There are a number of ways to reduce your Dubai mainland company formation costs.
Choose the right license – It is, for example, often cheaper to apply for a specialized or e-commerce license than for a general trading license.
Enlist the services of a business setup advisor – Business professionals can save you money by simplifying the approval process, decreasing delays, and negotiating better rates.
Put thought into your office space – Don’t choose the biggest, most luxurious office space you can find. Start small and upgrade as required.
Take advantage of incentives – Apply for relevant sector-based benefits and government subsidies.
Outsource certain services – Long-term costs can be reduced by outsourcing accounting, HR, and marketing services.
Step-by-step process to register a mainland company in Dubai
Here are the steps to follow to register a mainland company in Dubai:
- Select your business activity
When setting up a mainland company, start by choosing your business activity from the DED list. There are more than 2,000 activities on the list and how much you pay will depend on the activity you choose. - Apply for initial DED approval
You can’t continue with your business setup until initial approval from the DED is received. The fee generally ranges from AED 120–500. It will depend on the activity you chose from the DED list. - Apply for any extra approvals
Is your business going to operate in healthcare, education, or legal services? You might need to get additional approvals in place from specific authorities before your mainland company can legally operate. There is not a set fee for approvals but it generally starts from AED 500. - Book a trade name
Choose a trade name for your business that is unique, relevant to the business, and complies with the DED guidelines. Reserving a trade name usually costs approximately AED 620. - Draw up and notarize the memorandum of association (MOA) if required
If you are establishing an LLC or other multi-party setup, you will need a MOA. The cost of notarization starts at AED 1,500 and is determined by the number of partners and how complex the structure is. - Find office space and register Ejari
All mainland companies need a physical office space. Your rent will depend on the size and location of the space and registering Ejari costs between AED 200–400. Ejari registration is not optional. - Compile and submit documentation for licence
Once all approvals are in place and office space is secured, the relevant documents need to be submitted to the DED in order to receive your mainland license. The cost will once again on the type of licence you are applying for. It can range between AED 10,000–20,000 for a standard LLC. - Apply for Visas
As soon as your license is approved, you can submit an application to sponsor visas for your employees and investors. There are numerous visa-related expenses to keep in mind. This includes medical tests, Emirates ID registration, stamping, and insurance. Each visa can cost between AED 3,000–7,000.
Common mistakes to avoid when budgeting for mainland company setup
Downplaying overall costs: It is not uncommon for business owners to only budget for the setup license while skipping ongoing expenses like visas, insurance, rent and Ejari registration and other renewals and subscriptions.
Overlooking compliance responsibilities: It is important to include important obligations such as VAT registration and corporate tax in your budgeting as failing to do so can lead to delayed approval and fines.
Neglecting potential service agent and sponsor problems: Unfortunately, not all local sponsors and service agents were created equal. Making an unsound choice can result in delays, fines, and conflicts.
About Set Hub
Set Hub can expertly assist with budget-friendly and compliant Dubai mainland company formation. Our dedicated and experienced team offers a range of services to entrepreneurs to simplify license options, approvals, visas, and compliance – without any hidden costs. With our specialised guidance, you can focus on growing your business while we handle the setup process.