If you’re the owner of a business startup in Dubai who’s thinking of expansion options, perhaps it’s time to consider moving your storefront and operations by transferring to a mainland company visa and setup. Mainland business licenses in the UAE are becoming more affordable, and are catering to a more versatile cross-section of business owners.
Read on to understand the licensing regulations and requirements for starting a business in Dubai’s mainland, and how, this shift might be a worthwhile option for you.
Choosing the right place
Licensing regulations for businesses operating in Dubai’s free zones and its mainland are different. This is important information to know and understand, if you’re considering where to set up a business in the city, as regulations correspond to different advantages and limitations in each jurisdiction. This way you can make the right choice for revenue optimisation, based on your company’s financial footing and plans for growth.
Cost-effective Free zone visas
New, small startup proprietors often opt for Dubai free zone locations, to take advantage of maintaining complete ownerships of their businesses. The free zones also market a genre-specific, specialised environment, such as the Dubai Design District or the Dubai International Financial Centre. Another main attraction point is the relatively low cost of business permits in the free zones, as compared with the mainland, which can range from approximately AED 2500 to AED 28,500. These are very favourable conditions for new businesses that are looking to gain a foothold in the market.
However, when business startup owners think about expansion, some limitations in free zone regulations come into play, which may not have affected a business earlier, when it was trying to establish itself. Businesses located in the Dubai free zones must also have their offices there, and they are not permitted to sell their products and services on the mainland. There is however, one provision: free zone businesses can trade outside of their jurisdiction, and within the wider UAE through the use of a local distributor, and after paying a customs duty of 5%.
Upgrading a business to a mainland company setup and opening mainland branches helps cut back on costs, while offering a number of other advantages.
- Form a business partnership with a local investor who owns 51% of the shares in your company, while you maintain complete operations control (through a power of attorney agreement).
- Trade and sell goods and services from the mainland freely throughout Dubai and the wider UAE region.
- Open additional locations wherever your business is incorporated through property rental or purchase.
- Like the free zones, the mainland is also tax free, and businesses do not have to pay income or corporate taxes.
It’s generally a good idea to use an agency for business setup in Dubai or PRO services for license renewals. Additionally, if you’re switching from a Dubai free zone permit to a mainland company setup, then it’s even more important to use professional services as many of the processes and regulations may be unfamiliar to you. Inadvertent mistakes can lead to both costly delays and fines. Professionals who liaise with government agencies will not only know how to guide you, but will ensure that you meet the legal requirements, as well as, assist you with fulfilling your business’s niche needs.
Contact Decisive Zone today, for more information on how to upgrade to a mainland business license.