Mainland (Dubai, United Arab Emirates)
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Limited Liability Company (Mainland)
Mainland companies in Dubai refer to onshore business entities licensed by the Department of Economy and Tourism (DET), previously known as the Department of Economic Development (DED). These entities are authorized to operate throughout the United Arab Emirates (UAE), including engaging directly with the domestic market, unlike free zone companies which are primarily restricted to specific designated areas or international trade.
Mainland entities are subject to the UAE Commercial Companies Law and must comply with federal and emirate-level regulations. This makes them suitable for individuals or organizations intending to provide services or trade goods within the UAE to residents, including both individual consumers and other businesses located outside free zones.
The most common type of mainland entity is the Limited Liability Company (LLC). This structure provides legal separation between the business and its owners, limiting their liability to the extent of their capital contribution. LLCs in Dubai are permitted to engage in a wide range of commercial, industrial, and professional activities.
Under UAE law, an LLC must have at least one shareholder and one manager. The same individual may serve in both roles. There are no nationality restrictions on shareholders or managers, and both natural persons and legal entities may hold these positions.
A company’s name must reflect either its business activity or be derived from the name of one or more shareholders. Additionally, the phrase “with limited liability” must be included in the official trade name.
There is no statutory minimum share capital under the UAE Companies Law for an LLC. The legislation only requires that a company have “sufficient capital” to carry out its business objectives. This capital must be declared in the Memorandum of Association (MOA) and be divided into shares of equal nominal value. There is no obligation to deposit the declared capital into a UAE bank account, nor is proof of capital verification required at the time of registration.
Shareholders can freely agree upon the distribution of shares and profit-sharing ratios, and such terms must be clearly set out in the notarized MOA.
UAE mainland companies are subject to a relatively low taxation regime by international standards. A 9% federal corporate income tax applies on annual profits exceeding AED 375,000. Below this threshold, profits are exempt from corporate tax, which aims to support small and medium enterprises.
Other relevant tax considerations include:
- No personal income tax for individuals residing or working in the UAE.
- No withholding taxes on dividends, royalties, or interest payments.
- Value Added Tax (VAT) at a rate of 5%, which applies to most goods and services. A business must register for VAT if its taxable revenues exceed AED 375,000 annually.
Visa Sponsorship and Immigration
One of the advantages of forming a mainland company in Dubai is the ability to sponsor business and employment visas for shareholders, managers, and employees. The managing director listed on the trade license is required to obtain a UAE residence visa. This visa is valid for two years (renewable) and necessitates undergoing a medical examination, biometric capture, and securing health insurance in accordance with Dubai Health Insurance Law No. 11 of 2013.
The number of visas a company may sponsor is linked to the size of its commercial office space, typically calculated at one visa per 9 to 10 square meters (approximately 100 sq. ft.).
Mainland companies must lease physical premises within Dubai to obtain and maintain a trade license. The lease contract—referred to as an Ejari certificate—must be submitted to the DET. The minimum office size requirement is 100 sq. ft., although shared workstations in licensed business centers may be accepted for certain professional licenses.
A municipal tax of 5% of the total annual rent is payable upon registering the lease. Companies seeking to sponsor multiple visas or host employees on-site will need to secure a larger space accordingly.
Establishing a mainland company in Dubai offers legal access to the entire UAE market, including the ability to serve residents and engage in government contracts. While the process involves multiple procedural steps and physical presence in the UAE, the structure provides full operational flexibility, visa sponsorship capabilities, and competitive tax advantages.
Legal
Country code – AE
Legal Basis – Mixed (Civil law and Sharia law). Sharia law applies to personal status matters and blood money compensation for Muslims, while non-Muslims follow civil law.
Legal framework – Commercial Companies Federal Law, No.32 of 2021
Company form – Limited Liability Company (LLC)
Liability - The liability of the shareholders is limited to their unpaid amount of their shareholdings.
Trade License – A company business activity must be approved by the Department of Economy & Tourism in Dubai (DED).
A trade license is issued by the DED upon incorporation of the company. This document allows the company to conduct business in the UAE in accordance with the approved activities stated in the trade license. The license is valid for one year and renewable upon filing the relevant form, paying the relevant fee to the DED and completing other applicable requirements for Commercial License renewal.
Business Residence Visas - A Mainland company in Dubai may sponsor 2-year business residence visas in the UAE to its foreign directors and employees. The number of business residence visas that a company may sponsor is generally subject to the license package and the size of the office of the company.
Share Capital – There is no minimum share capital. However, the entity should have adequate capital to achieve the purposes of its incorporation and the capital shall consist of shares equal in value. There is no requirement to deposit the share capital in a UAE registered bank. It suffices to include details of its share capital in the LLC's memorandum of association and to have the same duly notarized by the UAE notary public.
Shareholders – At least one shareholder, who can be either a corporation or a natural person, resident or non-resident.
Manager – The company must have at least 1 manager. The manager may be a foreigner and reside overseas, but he or she must obtain a business residence visa upon incorporation.
Secretary – The appointment of a company secretary is not mandatory. Secretary may be an individual or corporate body.
Registered Office / Physical Office – It is mandatory for the company to lease an office space of minimum 100 sqf. within the city of Dubai. The commercial license and necessary approvals are only granted once the Lease Agreement / Tenancy Contract are submitted to the planning section of the Dubai Municipality / DED. 5% of the total amount of the lease agreement will need to be paid as a municipality tax at the time of registration.
General Meeting – Annual general meetings are not mandatory.
Electronic Signature – Permitted.
Re-domiciliation – Inward/outward re-domiciliation is not allowed.
Compliance – Companies must submit tax returns with the UAE Federal Tax Authority within 9 months from financial year end.
Companies must appoint an independent auditor, and financial statements together with an auditor report must be prepared and filed annually within 6 months from the financial year end.
- Members not disclosed
- Members not disclosed
- Corporate members permitted
- Corporate manager permitted
- Local manager required
- Registered office or agent required
- Annual meeting required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Mixed (Civil and Sharia law) Legal basis
- 1 Minimum members
- Varies Minimum registered capital
- Varies Minimum paid up capital
- AED Capital currency
- 100% Foreign-ownership allowed
- 2017 AEOI
Taxes
Tax Residency - Companies that are incorporated or otherwise formed or recognised under the laws of the UAE will be considered a resident person. This covers companies incorporated in the UAE under either mainland legislation or applicable Free Zone regulations.
Companies incorporated overseas that are effectively managed and controlled in the UAE may also be deemed tax resident in the UAE.
Basis - Companies are subject to corporate tax on their worldwide income.
Tax Rate – UAE Companies are subject to tax as follows:
- 0%, for taxable income not exceeding AED 375,000;
- 9%, for taxable income exceeding AED 375,000;
- 15% for Multinational Enterprises (Groups with revenues over AED 3.15 billion)
Capital Gains - Capital gains from the disposal of capital assets are treated as ordinary income and subject to corporate taxes. Capital gains from the disposal of shares of portfolio companies are exempt from taxes as long as certain conditions are met (see below conditions for the tax exemption of dividends).
Dividends - Dividends from resident companies are generally exempt from corporate income tax. Dividends from foreign companies is exempt from tax if:
- the shareholding is at least 5%
- a 12-month uninterrupted holding period (or the intention to hold for 12 months) is in place
- the participation is subject to tax in its country or territory of residence at a rate that is not lower than 9%, and
- not more than 50% of the assets directly or indirectly owned by the participation consist of an ownership interest or entitlements that would not qualify for the participation exemption if these assets were held directly by the taxable person.
A shareholding of less than 5% may qualify for the exemption where the acquisition cost of the shares exceeds AED 4 million.
Withholding Taxes - There are no withholding taxes on payments of dividends, interests and royalties to nonresidents.
Foreign-Source Income - A company may elect to have profits from a foreign permanent establishment exempt from tax. Such exemption is available as long as such profits are subject to foreign taxes at a rate not less than 9% in the foreign jurisdiction. Losses, income, expenditure, and foreign tax credits in relation to the foreign permanent establishment will not be deductible for UAE tax purposes if the tax exemption is elected.
Anti-Avoidance Provisions - Transactions between related parties must comply with the arm’s-length principle. Transfer pricing documentation must be prepared if
- the taxable person is part of a multinational enterprise (MNE) group with a total consolidated group revenue of at least AED 3.15 billion in the relevant tax period, or
- the taxable person has revenues of at least AED 200 million or more in a relevant tax period.
VAT – VAT of 5% applies to sales of goods and services in the UAE, including the import of services and goods. The export of services is generally zero-rated.
Generally, services which are taxable if provided within UAE then the same needs to be considered as VATable if received from a service provider located outside of UAE (import of services) under reverse charge mechanism, meaning that the recipient of the service in the UAE must pay VAT for such service.
If a FZ company provides services from its place of business in the UAE to a person whose place of establishment or fixed establishment is outside the UAE, it becomes an export of service, and is generally exempt from VAT.
Other taxes – In U.A.E. there is no personal income tax, capital gains tax, real property tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax.
There is a real property tax levied on the transfer of properties, at rates that vary from 2% to 4%, depending on the Emirate where the property is located. Some municipalities, e.g. Dubai, also levy an annual property tax on the assessed rental value of the property.
- Tax transparent entity
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 9% Offshore Income Tax Rate
- 9% Corporate Tax Rate
- 9% Capital Gains Tax Rate
- 9% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0% Personal Income Tax Rate
- 5% VAT Rate
- 76 Tax Treaties
Country details
The United Arab Emirates is a former British protectorate and currently a federation of the Middle East, located to the east of the Arabian Peninsula. It borders Oman to the southeast, with the Persian Gulf to the north and Saudi Arabia to the west and south. It is composed of a hybrid monarchy consisting of 7 emirates, Abu Dhabi, Ajman, Dubai, Fujairah, Ras al Khaimah and Umm al Qaywayn.
It has a population of 9 million. Its capital is Abu Dhabi, but the most populated and popular city is Dubai. Arabic and English are their official languages. The official currency is the United Arab Emirates Dirham (AED), pegged to the US dollar at an exchange rate of 3.67:1.
The Supreme Council, made up of each emirate Sheikhs, is the highest political decision-making body in the country. Although each Emirate retains a considered political, economic and judicial autonomy, with different rules and regulations.
The federation is one of the richest countries in the world, supported by a liberal and open economy with the eighth highest per capita income worldwide and a considerable annual trade surplus.
Having the seventh largest oil reserve in the world, its economy is clearly dependent on this commodity fluctuations. In recent years efforts have been made to diversify the economy, be less oil-dependent and develop sectors such as retail, financial and tourism.
Tax treaties
Tax treaties Map
Services
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