Mainland Company Setup in Dubai: A Practical Guide

A mainland company in Dubai is one licensed by the Dubai Department of Economy and Tourism rather than by a free zone authority, and it can contract and trade anywhere in the UAE without going through a local distributor. Since the reform of the Commercial Companies Law, most mainland activities can be held 100 per cent by foreign shareholders.

That reform is the reason the mainland versus free zone question looks different from how it looked before 2021. For decades the mainland meant accepting a 51 per cent Emirati shareholder, and the free zones existed largely to avoid that. Ownership is no longer the deciding factor for most businesses. Market access, cost, tax treatment and the regulator you will actually deal with now matter more.

What does mainland actually mean in Dubai?

Mainland, or onshore, describes a company registered with the emirate’s economic department and subject to the federal Commercial Companies Law, currently Federal Decree-Law No. 32 of 2021. In Dubai the licensing authority is the Department of Economy and Tourism, still widely called the DED.

The practical difference is reach. A mainland company can sell to customers anywhere in the UAE, take on government and semi-government contracts, and open branches across the emirates. A free zone company is licensed to operate within its zone and outside the UAE. Selling into the onshore market from a free zone usually means appointing a distributor or agent, or obtaining a dual licence arrangement, which several free zones now offer in partnership with the emirate authority.

There is a third category worth separating out. The Dubai International Financial Centre and Abu Dhabi Global Market are financial free zones with their own company law, courts and regulators based on common law. Those are not simply free zones with better branding, and they should be assessed on their own terms.

Can a foreign investor own 100 per cent of a Dubai mainland company?

For most activities, yes. Federal Decree-Law No. 26 of 2020 amended the Commercial Companies Law to remove the general requirement for majority Emirati ownership, and the position carried into the 2021 law.

Two qualifications matter. Cabinet Resolution No. 55 of 2021 identifies activities of strategic impact where ownership conditions still apply, covering areas such as security, defence and military activity, banking, exchange houses and finance companies, insurance, currency printing, certain communications activities, Hajj and Umrah services, Quran centres and fisheries-related activity. Beyond that list, each emirate publishes which activities on its own register are open to full foreign ownership, so the answer can differ between Dubai and Abu Dhabi for the same activity.

A separate point often confused with ownership is the local service agent. A UAE national local service agent may still be required for some structures, most commonly a sole establishment under a professional activity where the owner is not a GCC national, and for some branch registrations. The agent holds no shares, no profit entitlement and no management rights, and is paid a fixed annual fee. Whether one is needed depends on the activity and the legal form, so confirm it with DET before budgeting for it.

Which licence type do you need?

DET issues licences by category, and the category follows the activity you select from its list rather than the other way round. The main types are:

• Commercial, for trading, import, export, distribution and most buying and selling activity.
• Professional, for services, consultancy and skilled work where the value is expertise rather than goods.
• Industrial, for manufacturing, processing and assembly, which brings in additional approvals and premises requirements.
• Tourism, for travel, hospitality and related activity regulated by the tourism side of DET.

Activity selection is not a formality. It determines the licence type, whether an external regulator has to approve the application, what the company may lawfully invoice for, and in some cases whether full foreign ownership is available. Picking a close-enough activity code to speed up incorporation is the single most common source of later trouble, because banks, auditors and counterparties read the licence literally.

What does the DET process involve?

At a high level the sequence is stable, even as the online systems change:

• Choose the activity or activities and the legal form. Common forms are a limited liability company, a sole establishment, a civil company for certain professions, and a branch of a foreign or UAE company.
• Reserve the trade name and obtain initial approval from DET.
• Obtain approvals from any external regulator the activity requires, for example RERA for property services, the Dubai Health Authority for clinical activity, Dubai Municipality for food, or the Central Bank for financial activity.
• Prepare and notarise the memorandum of association or the relevant constitutional document.
• Secure premises and register the tenancy through Ejari.
• Pay the applicable fees and collect the trade licence.
• Open the establishment card and immigration file, register with MOHRE, and apply for visa quota.
• Register the ultimate beneficial owner, open a corporate bank account, and register for corporate tax and, if the thresholds are met, for VAT.

Fees are set by DET and the other authorities involved and change from time to time. Any figure you are quoted should be checked against the current schedule rather than against last year’s guide. Timelines depend almost entirely on whether an external approval is needed.

Do you need a physical office?

A mainland licence has generally been tied to real premises in Dubai, evidenced by a tenancy contract registered through Ejari. The address is not cosmetic: visa quota is calculated by reference to the space, and inspections happen.

DET has introduced lighter options for some activities and some categories of applicant, including shared and serviced arrangements. Whether a given activity qualifies is an operational question for DET rather than something settled in legislation, and it has changed more than once. Check the current requirement for your specific activity before signing a lease.

How do mainland and free zone compare on tax and reach?

Corporate tax applies across the UAE under Federal Decree-Law No. 47 of 2022, at 9 per cent on taxable income above AED 375,000. A mainland company is taxed on that basis. A free zone company may qualify as a qualifying free zone person and pay 0 per cent on qualifying income, but the conditions are strict, the definition of qualifying income is narrow, and income from mainland customers will often fall outside it. Large multinational groups also have to consider the global minimum tax rules.

The trade offs, put plainly:

• Mainland gives unrestricted onshore trading, access to government tenders, and a simpler story for banks and enterprise clients. It usually costs more to run and has a heavier compliance footprint.
• Free zone can be cheaper to establish, may offer customs benefits for goods that stay in the zone, and may support a 0 per cent corporate tax position for qualifying activity. It limits onshore selling and can complicate contracts with UAE government bodies.
• DIFC and ADGM suit financial services, funds, holding structures and businesses that want a common law contract and court environment. They are not the cheap option.

Where do people get caught out?

The frequent failures are avoidable. Activities are chosen for speed and then do not match what the business actually invoices for. An external approval is discovered late and stalls the licence for weeks. A memorandum is notarised in a form that the bank later refuses to accept for account opening, which has become the real bottleneck for many new companies. A free zone company signs onshore work it is not licensed to perform, and finds out when a client’s procurement team asks for the licence.

Two other points recur. Ownership and control are different things, and a shareholders agreement or a side arrangement that contradicts the notarised memorandum tends not to survive scrutiny. And ongoing obligations, including licence renewal, ultimate beneficial owner filings, corporate tax registration and returns, and Ejari renewal, are where established companies lose their good standing, not at incorporation.

This article is general information about UAE law as at September 2026 and is not legal advice. The position varies by emirate and by free zone, and it changes often. Take advice on your own facts before acting.

Legal Desire has published legal industry news and analysis since 2012. This article is part of our UAE desk, which tracks the laws, courts and regulators of the Emirates for lawyers and in-house teams.