Guide
Structure
Setting up a mainland company in Dubai: access to the domestic market
A mainland licence is the only one that lets you invoice a UAE-based client directly, open a shop and bid for a public tender. In return, it requires a registered commercial lease and a longer approval timeline.
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Domestic market Direct invoicing in the UAE
- The former mandatory Emirati stake, now abolished
- 51%
- For the vast majority of activities since 2021
- Corporate tax above the threshold
- 9%
- Standard scale, above AED 375,000
- Situations that make the mainland unavoidable
- 5
- Local clients, outlet, public tenders, regulated activity, team
Orders of magnitude taken from the guide below. They describe a mechanism, not your project.
The mainland is justified by your clients, not by its prestige
The choice between the three regimes for company formation in Dubai comes down first to where your clients are. If all your clients are abroad, a free zone company remains the simplest and cheapest route; the mainland is only needed if the UAE domestic market is part of your plan.
Key point
The mainland brings no tax advantage and no extra credibility in itself. It brings a right: to invoice a UAE-based client directly, with no distributor or branch. If you have no use for that right, you are paying for a lease and approvals for nothing.
The table
The only trade-off that matters: where your revenue comes from
Six situations, two answers. If a single row of this table describes your actual business, it decides the regime on its own.
| Your situation | Mainland | Free zone |
|---|---|---|
| Individual or corporate clients based in the UAE | Direct invoicing | Distributor, branch or dual licence |
| Public tenders and large local groups | Accessible | Rarely accessible |
| Shop, restaurant, workshop open to the public | Possible | Not outside the zone |
| Regulated activity: healthcare, education, passenger transport | The usual route, subject to sector approval | Usually impossible |
| Clients exclusively outside the UAE | Possible, but more restrictive | The simplest route |
| Premises required | Commercial lease registered with Ejari | Shared desk accepted in many zones |
| 0% Qualifying Person regime | Not applicable | Possible under strict conditions |
Scroll the table sideways to see every column.
Ownership
Full foreign ownership has become the rule
The reform that came into force in 2021, under the 2020 federal decree-law amending the Commercial Companies Law, removed the requirement for a mainland company to be 51% owned by a UAE national for the vast majority of commercial and industrial activities. A foreign investor can therefore now own the entire share capital of a local limited liability company.
Two nuances remain, and they are checked before filing, not after. First, a list of so-called strategic-impact activities — defence, security, certain financial or sovereign-interest activities — remains subject to specific conditions set by the Cabinet. Second, some professional forms carried on by a foreign individual still require the appointment of a local service agent: they are not a partner, hold no shares and do not share in the profits, but they are paid an annual fee that must be in your budget.
The practical consequence is that a mainland company no longer differs from a free zone company on ownership. It differs in the market it opens and in the property obligations it imposes.
Licence
The local licence and the activity list
The licence is issued by the emirate’s economic authority — in Dubai, the Department of Economy and Tourism, which many documents still call the DED. It takes the form of a commercial, professional, industrial or tourism licence, and it carries a list of activities drawn from an official classification.
As in a free zone, it is this list that decides what you are allowed to invoice, not the name of the licence. The difference lies in the approvals: several activities need the prior consent of a sector authority before the licence is issued — healthcare, education, transport, security, food handling, real estate activities. These approvals also cover the compliance of the premises, which may be inspected.
On top of that come standard obligations that projects often discover late: registration with the emirate’s chamber of commerce, registration of the trade name and, as soon as there are employees, registration with the ministry responsible for human resources, with its rules on employment contracts and insurance.
Premises
The Ejari-registered lease, the constraint comparisons forget
A mainland company must have a real business address, evidenced by a lease registered with Ejari, the tenancy register run under the Dubai Land Department. Without this document, the licence is neither issued nor renewed.
Three budget consequences follow. Rent becomes a fixed yearly cost, paid in advance in one to four cheques depending on the negotiation. The visa quota is calculated in proportion to the space rented: sponsoring six residents requires a corresponding floor area, not a mere declaration. Finally, some entry packages accept a desk in an approved business centre, but with a very small visa quota that quickly becomes a constraint.
Watch out
We only have the lease signed once the initial approval of the activity has been obtained, never before. Premises whose permitted use does not match the activity applied for — a warehouse for an office activity, non-compliant premises for food service — tie up rent while the licence application is being refused.
The right choice
When the mainland really is the right choice
Five situations make it hard to avoid:
- you sell to consumers or businesses located in the UAE and do not want a distributor taking a share of your margin;
- you run a shop, a restaurant, a venue or a workshop open to the public;
- you bid for public tenders or work for government entities;
- your activity is regulated by a sector authority that does not grant approval in a free zone;
- you plan to employ a sizeable local team and would need the floor space anyway.
Conversely, a consulting firm whose clients are all in Europe, a software publisher selling online, or a trader who stores nothing in the UAE has, in practice, no reason to pay for a commercial lease and a cycle of approvals. For them, a free zone does the job at a lower cost.
Tax
Tax and compliance: the standard regime
A mainland company is subject to corporate tax on the standard scale: 0% up to the taxable profit threshold of AED 375,000 and 9% above it, the scale being marginal. It has no access to the Qualifying Free Zone Person regime, which is reserved for entities established in an eligible free zone. Depending on your situation, relief schemes for small businesses may apply, subject to conditions and for a period set in law: have this checked every financial year.
On top of that come VAT registration once the mandatory threshold is crossed, compliant bookkeeping and the retention of supporting documents. These obligations, and above all their deadlines, are set out on the page company accounting and tax. How the tax itself works is covered on the page corporate tax in the UAE.
Afterwards
Moving from a free zone to the mainland
It is a common case: a services company set up in a free zone wins its first UAE client and discovers it cannot invoice them directly. There are three routes, in rising order of cost: the dual-licence arrangement where the zone has signed one with Dubai’s economic authority, opening a mainland branch of the free zone company, or setting up a second, local entity.
None of them is a simple change of status. Each adds a licence, a lease, a set of accounts and, usually, a second bank account. That is why the question of your target market is asked before the first licence, not at the first local contract.
Frequently asked questions about mainland companies in Dubai
Do I need an Emirati partner for a mainland company?
Not in most cases. The 2020 reform, incorporated into the Commercial Companies Law, opened full foreign ownership for most commercial and industrial activities. A list of strategic-impact activities remains regulated, and some professional forms still require a local service agent, who is not a partner and holds no shares.
Is a physical office mandatory on the mainland?
A business address with a lease registered with Ejari is required to obtain and then renew the licence. Some entry packages accept a desk in an approved business centre, with a very limited visa quota. As soon as you want to sponsor several residents, the floor space you rent becomes the limiting factor.
Can a mainland company benefit from the 0% rate?
The Qualifying Person regime is reserved for companies established in a free zone: a mainland company has no access to it. It falls under the standard scale, which is 0% up to the taxable profit threshold and 9% above it. Relief schemes for small businesses also exist, subject to conditions and for a limited period, to be checked for your situation.
How long does it take to get a mainland licence?
The timeline depends mostly on third-party approvals. A simple commercial licence is quick once the lease is signed and registered; an activity that needs approval from a sector authority — healthcare, education or food service — adds several weeks and sometimes a compliance inspection of the premises.
Can I move from a free zone to the mainland without starting over?
You open a mainland branch of the free zone company, which needs its own licence and its own lease, or you set up a second entity. The dual-licence arrangement exists in some zones and avoids duplicating the whole structure. None of these routes is a simple change of status: each has an additional yearly cost.
Is the mainland more expensive than a free zone?
At set-up, often yes, mainly because of the lease and the approvals. Over three years the gap narrows: the rent on a well-located free zone office and its licence renewal can exceed those of a modest mainland company. The comparison only makes sense item by item, over the period you expect to hold the structure.
Further reading in this guide
Structure
Free zone company in Dubai
Structure
Offshore company in the UAE
After set-up
Company accounting and tax
Tool
Structure comparator
Go further
Visas and residence in the UAE
Independent advice
Check whether your business really needs a mainland licence
Describe your clients, your activity and the premises you have in mind. We will tell you whether the mainland is necessary, which sector approvals apply, and what the lease will change in your yearly budget.