Company Set Up Services

A UAE Mainland Company refers to a business entity that operates within the United Arab Emirates (UAE) but outside the free zones. Mainland companies have the advantage of being able to trade freely within the local UAE market and conduct business both within the UAE and internationally without restrictions.

Here are key points about setting up a Mainland Company in the UAE:

1. Ownership Structure:

In some sectors, foreign investors may be required to have a local sponsor or partner who owns 51% of the shares, with the foreign investor owning 49%. However, in recent years, many sectors have allowed 100% foreign ownership, especially in certain types of businesses.

2. Licensing:

A Mainland Company requires a trade license issued by the Department of Economic Development (DED) in the emirate where the business is being established. The type of license depends on the nature of the business (e.g., commercial, industrial, professional).

3. Office Space Requirement:

A Mainland Company must have a physical office space within the UAE, which is a requirement for obtaining a business license. Virtual offices are generally not permitted for Mainland Companies.

4. Business Activities:

Mainland Companies are allowed to conduct a wide range of business activities and can trade directly with the local market, unlike free zone companies that may face restrictions.

5. Legal Forms:
   • Mainland Companies can be established in various legal forms, including:
   • Limited Liability Company (LLC): Most common form, suitable for small and medium-sized enterprises.
   • Sole Proprietorship: Owned and operated by a single individual.
   • Civil Company: For professional services like consulting, where full foreign ownership is allowed.
   • Branch of a Foreign Company: Allows a foreign company to operate in the UAE without setting up a new legal entity.

6. Taxation:

The UAE has a favorable tax environment, with no personal and 9% corporate income taxes for most businesses which is one of the lowest in the world. However, VAT at 5% applies to most goods and services.

7. Regulatory Compliance:

Mainland Companies must comply with UAE labor laws, Emiratization requirements (hiring UAE nationals for certain roles), and other local regulations.

Setting up a Mainland Company in the UAE offers significant flexibility and access to the local market, but it also involves more regulatory compliance compared to free zone companies.

A “Free Zone Company” refers to a business entity established in a designated free zone within a country, often with various incentives designed to attract foreign investment and boost trade. These zones are usually situated near seaports, airports, or borders to facilitate import and export activities.

Key Features of Free Zone Companies:

1. Tax Benefits: Companies in some of the free zones (Designated Free Zones) often enjoy significant tax incentives, such as corporate tax exemptions, no import/export duties, and no personal income taxes.

2. Full Foreign Ownership: Unlike mainland companies in some countries, free zone companies can be fully owned by foreign investors without the need for a local partner.

3. Repatriation of Profits: Investors are generally allowed to repatriate 100% of their profits and capital, which makes it an attractive option for foreign businesses.

4. Simplified Regulations: Free zones often have more streamlined regulations and administrative processes, making it easier and faster to set up and operate a business.

5. Sector-Specific Zones: Many free zones are tailored to specific industries, such as technology, manufacturing, or media, providing specialized infrastructure and resources.

6. Trade Advantages: These zones typically offer logistical advantages for companies engaged in import-export activities, including proximity to key trade routes and efficient customs processes.

Popular Free Zones:

The UAE is famous for its numerous free zones, such as the –

• Dubai International Financial Centre (DIFC)
• Jebel Ali Free Zone (JAFZA)
• Dubai Multi commodity Center (DMCC)
• International Free Zone (IFZ)
• Meydan Free Zone
• Ajman Free Zone
• Ras Al Khaima Economic Zone (RAKEZ)
• Sharjah Media City Free Zone
• Ajman Media City Free Zone
• Dubai World Trade Center Free Zone
• Dubai South

Offshore companies in the UAE are entities established in a jurisdiction within the UAE but often serve international business interests rather than local ones. The UAE offers several benefits for offshore companies, including confidentiality, and access to a well-regulated banking environment.

Key Offshore Jurisdictions in the UAE:

1. Jebel Ali Free Zone (JAFZA):
   • Located in Dubai, JAFZA is a popular choice for offshore companies due to its well-established infrastructure and strategic location.
   • Offers a range of business activities and has various facilities for international businesses.
2. Ras Al Khaimah International Corporate Centre (RAK ICC):
   • Ras Al Khaimah is known for its low-cost, flexible, and efficient offshore registration process.
   • RAK ICC provides confidentiality and a range of corporate services.
3. Ajman Free Zone:
   • Ajman offers offshore company formation with cost-effective options and a straightforward setup process.
   • The Ajman Free Zone is known for its competitive fees and ease of administration.
4. Dubai International Financial Centre (DIFC):
   • DIFC is a financial hub with its own legal system and regulatory framework.
   • It’s ideal for businesses engaged in financial services and investment activities.

Under Business Set up consultancy services, we assist clients (Majorly from India) who want to set up their business in UAE. Under this service, we cater client with following related services which are integral to provision of this services.

1.A Guiding client about selection of correct structure (Type of company)

We have observed that lot of business houses who are looking to set up company in Dubai or UAE, do not have fair idea about the different type of structure or different type of companies they can incorporate and often end up selecting the option which is not suitable for them or is comparatively expensive than the other available option. Here as an expert, we counsel the clients till the time he gains full information about all the available option and arrive at decision to set up the company which can serve his\her purpose in most economical ways.

1.B. Consultancy on Foreign Exchange Management Act of India 

It has been widely observed that many clients from India who intends to set up company in UAE, are unaware of provisions and compliances of FEMA, India which are applicable at the time of setting up company outside India by a resident Indian. Under this service, we assist Indian clients with all the applicable laws related to FEMA and RBI guidelines which can enable them to bring initial share capital into UAE from India through legal channels after fulfilling all the related compliances. We can also assist them in meeting annual compliances mandated by this law.

1.C. Consultancy on applicability of Indian Income Tax on UAE Company and Shareholders in their individual capacity–

It is a myth amongst most of the clients that Income of Company Incorporated outside India is not taxable in India. This is a myth as there are possible scenarios where a Foreign company can be considered as Indian Company and its income can be taxable in India, in spite company being registered in UAE. We consult clients on measure to be taken to avoid Tax on Income Of UAE company in India.

1.D. Executing Set Up Process

After all the knowledge sharing, once the client decides to set up a company, we undertake entire execution process involved in company setting process. The process involves, reserving trade names, drafting legal documents wherever applicable, coordinating with authorities for submission of necessary documents, seeking appointments for shareholders to sign the company documents, application of establishment card, application of chamber of commerce certificate, application of import export code and other similar activities. Once the company is established we can also assist in obtaining required work permits.

1.E. Company Management Services

It has been observed that once the company is established, the promoters in initial phase intends to operate company from India. In such a scenario they require representative here who can look after their part time operations related to banking, communication, logistic, documentations and other operations. To prevent client from being getting into hazels of appointing full time employee we can assist client in managing his affair as his representative in UAE.