5 Things To Know About Mainland Licenses In Dubai

5 Things To Know About Mainland Licenses In Dubai

Setting up a business in Dubai mainland offers several advantages, including access to a broader market, flexibility in business activities, and proximity to local clientele. However, steering the licensing process in Dubai mainland requires understanding the regulatory framework and compliance requirements. Below are five essential things to know about mainland license Dubai:

Types of mainland licenses:

Dubai mainland licenses cover a wide range of business activities, including commercial, professional, and industrial licenses. Each type of license corresponds to specific business activities:

Commercial license: For companies engaged in trading activities such as buying, selling, and distributing goods.

Professional license: For service-oriented businesses such as consultancy, legal services, medical clinics, and IT services.

Industrial license: For companies involved in manufacturing, processing, and production activities.

Choosing the right type of license depends on your business activity and determines the scope of operations permissible under UAE law.

Local sponsorship requirement:

Unlike free zones where 100% foreign ownership is possible, establishing a mainland company in Dubai typically requires a local sponsor or service agent. The local sponsor must be a UAE national or a company wholly owned by UAE nationals. The sponsor’s role is primarily administrative and does not entail ownership or control over the business. The sponsorship agreement outlines the terms and responsibilities of both parties, ensuring compliance with local regulations.

Location flexibility:

Dubai mainland companies have the flexibility to operate anywhere within the emirate, allowing businesses to choose locations based on strategic considerations such as proximity to customers, suppliers, and transportation hubs. The ability to establish a presence in prime commercial areas improves visibility and accessibility, contributing to business growth and customer engagement.

Regulatory compliance:

Mainland businesses in Dubai must adhere to federal laws and regulations issued by the Department of Economic Development (DED) and other relevant authorities. Compliance requirements cover various aspects such as commercial activities, licensing procedures, labor laws, and taxation.

Economic substance regulations (ESR):

Dubai mainland companies are subject to Economic substance regulations (ESR) introduced to comply with international standards and avoid being classified as a non-cooperative jurisdiction. ESR requires businesses engaged in certain activities to demonstrate economic substance in the UAE by maintaining adequate physical presence, conducting core income-generating activities, and having qualified employees and operational expenditures in the country.