Mainland Company Formation in Dubai

The ownership rule changed, and most advice did not

For decades the standard advice was that a mainland company required a UAE national holding fifty one per cent of the shares, and that founders who wanted full ownership should use a free zone. Federal Decree-Law No. 26 of 2020, which amended the Commercial Companies Law and took effect on 1 June 2021 changed that for most commercial and industrial activities. A great deal of content written before 2021 is still online and still says otherwise, and it is one of the most common pieces of outdated information we correct. The qualification that does still apply is narrower than the old rule: Activities of strategic impact remain subject to restrictions, and each emirate’s licensing authority sets the list, so ownership must be confirmed against the specific activity rather than assumed That is a question to answer for your specific activity rather than a general reason to avoid the mainland.

Who needs mainland company formation in Dubai

Businesses selling to customers inside the UAE: retail, restaurants, clinics, contractors, professional firms with local clients, and any business that intends to bid for government work. It is also the right structure for a free zone company that has outgrown the mainland access constraint and needs to serve local customers directly rather than through a distributor.

What our mainland company formation service covers

The sequence matters here, so we run it the same way each time:

1. Confirm the activity and the ownership position. The activity determines the licence type and whether the standard ownership rule applies, so this is settled first rather than assumed.
2. Reserve the trade name and obtain initial approval. Name rules are strict and rejections at this stage are routine and inexpensive.
3. Secure premises and register the tenancy. A physical tenancy registered through Ejari in Dubai is normally required, and the size of that tenancy drives the visa quota This is the step that usually sets the timeline, because the licence cannot complete without it.
4. Draft and notarise the memorandum of association. Shareholding, management authority and profit split are fixed here, and changing them later is a formal amendment rather than an internal decision.
5. Obtain any external approvals the activity requires. Regulated activities route through a further authority and that queue is outside anyone’s control.
6. Issue the licence and the establishment card, then process visas against the quota the tenancy supports.
7. Register for corporate tax and open the books, because the obligations begin with the licence, not with the first invoice.

Why the tenancy is the real decision

On the mainland the licence and the premises are not separate purchases. The registered tenancy establishes the address on the licence and it sets how many residence visas the entity can sponsor. That makes the tenancy the most consequential number in a mainland budget, and the one founders most often get wrong in both directions. Take too little space and the visa quota caps the team before it is hired, which forces a mid-year move and a licence amendment. Take too much and you carry rent for capacity that sits empty, every year, for the life of the company. The correct approach is to size it from the headcount plan for the next two years, not from the space that feels appropriate, and to treat the resulting rent as part of the cost of the licence rather than a separate line.

Mainland and corporate tax

A mainland company is a taxable person like any other. It registers regardless of profit, files a return whether or not tax is due, and is taxed at 0% on the first AED 375,000 of taxable income and 9% above that. What it does not have is the qualifying free zone regime, and in practice that is less of a disadvantage than it appears, because qualifying status is conditional, tested annually, and lost entirely for the period if the conditions fail. A mainland company has a simpler tax position: no qualifying income analysis, no de minimis test, no annual risk of losing a rate. Where a business genuinely earns qualifying income the zone regime is valuable. Where it sells to UAE customers, it is usually not available anyway.

The failures we are called in to fix

What we see most often:

• Believing a local partner is still required. Up to 100% foreign ownership is available for most mainland commercial and industrial activities for most activities. The exception is narrow and activity specific.
• Sizing the tenancy for the space rather than the visas. Quota follows leased area, so the headcount plan drives the lease.
• Signing a lease before the activity is approved. If the activity is refused or needs an external approval, the rent has already started.
• Treating the memorandum as boilerplate. Management authority and profit split are set there, and amending them later is a formal process.
• Assuming mainland means higher tax. The rates are identical; what differs is the availability of the qualifying free zone regime, which is conditional in any case.
• Leaving corporate tax registration until the first return is due. The obligation attaches to the licence and the late registration penalty is AED 10,000.

The timing

When your customers are in the UAE. That is the whole test. If you sell to local businesses, consumers or government, the mainland removes an intermediary the free zone structure requires. If you sell internationally and need neither local customers nor a large visa quota, the mainland is usually the more expensive way to achieve the same thing.

What our mainland company formation delivers

• DET trade licence issued with the correct activity list
• Memorandum of association drafted and notarised
• Ejari registration and establishment card completed
• Visa processing for the agreed headcount
• Corporate tax registration and an opening compliance calendar

Documents we will ask for

Nothing exotic, and most of it you already have:

• Passport copies for shareholders and the proposed manager
• The commercial activity, described in enough detail to map to a licence category
• A headcount plan for years one and two, which sizes the tenancy
• Proposed trade names, in order of preference
• Attested corporate documents where a company is a shareholder
• Any professional qualifications the activity requires
• The intended office location, since the tenancy has to exist before the licence completes

How we price our mainland company formation in Dubai

Quoted as a fixed professional fee plus authority costs shown separately. The variable that moves a mainland budget most is not our fee or the licence: it is the tenancy, because it is annual and it sets the visa quota. We size it with you before quoting so the number you see is the number you pay.

Related

FAQs about mainland company formation in Dubai

Last reviewed 27 July 2026. Rates, thresholds and deadlines change, the e-invoicing provider deadline has already moved once. Confirm current requirements with the Federal Tax Authority before acting, or ask us to check your position.