For starting a 100% foreign-owned business in Dubai mainland, the government issued terms and regulations that should be adhered to before applying for a business license, which should be issued by the Department of Economic Development (DED). Some of these major considerations are:
- Local partner/ local service agent: Establishing a Mainland Dubai company requires working with a UAE national. This citizen can be either a Local Partner (owning at least 51% of shares) or a Local Service Agent (without any shareholding). From the legal point of view, the signature of this local partner is essential for government authorities. However, the foreign owner can run the business without any local partner’s involvement unless it is agreed otherwise.
- Special Approvals for Specialized Licences: A company established in Dubai Mainland can run many businesses, except those regulated by government authorities and require approval. For example, real estate licenses require approval from Real Estate Regulatory Authority (RERA), educational licenses require approval from the Knowledge and Human Development Authority (KHDA), hospitals/clinics/medical-related licenses require Dubai Health Authority (DHA) approval, and so on.
However, starting a 100% foreign-owned business in Dubai Mainland is possible if:
- The company offers professional services. In this case, although a local partner is still required for facilitating local government services, they can be annually paid without holding any shares. For expatriates, there is another option for managing government functions: hiring an attorney from the local service agent.
- A branch of an overseas company is going to be established. This is one of the best ways to expand an already active and established business abroad in the UAE while maintaining 100% ownership. This branch should continue the parent company’s activities, and if the parent company is engaged in multiple activities, the branch can either be engaged in all or some of them. A local agent service can manage government functions.
- A branch of a company in a Free Zone is going to be established. Like the previous case, a local agent service can manage the government functions in place of a local partner. This setup requires the entrepreneurs to pay twice the renewal fees, which many businessmen do not find sustainable. Instead, they opt for working with a local distributor who can manage the same tasks at cheaper costs.
Types of DED licenses
- Industrial Licenses are issued for manufacturing and selling products using raw materials.
- Commercial Licenses are issued for trading commodities without territorial restrictions.
- Professional Licenses are suitable for individuals or groups offering consultancy services, engineering services, accounting services, administrative services, training, education, etc.
For more details about professional or commercial licenses under the Dubai DED, please talk to one of our Business Setup Experts. Call 055 233 00 77.
