Mainland company formation in the UAE
When your customers are inside the UAE (retail, tenders, on-site services), a mainland LLC is the correct structure even though it costs more than a free zone company. Since 2021 it can be 100% foreign-owned for most activities.
A mainland LLC lets you sell anywhere in the UAE, bid for government tenders and open a physical shop or clinic, and since the 2021 reform it can be 100% foreign-owned for most commercial and industrial activities. It is licensed by the economic department of the emirate (in Dubai, the Department of Economy and Tourism, DET). Budget for three blocks: the licence from about AED 15,000, a physical office with a registered lease (Ejari in Dubai), and visas linked to the office size. A realistic first year costs about AED 25,000–40,000, and licensing takes 2–3 weeks.
- The mainland is required for government tenders, retail premises and any service delivered on site in the UAE. It is a different licence type with different rights, and it is the correct choice whenever those activities are the business.
- Since the 2021 reform, most commercial and industrial activities can be 100% foreign-owned; only a short strategic list still needs Emirati participation.
- Budget for three blocks: the licence from about AED 15,000, a physical office with a registered lease, and visas linked to floor space. A realistic first year costs about AED 25,000–40,000.
- A standard activity is licensed in 2–3 weeks; regulated activities need external approvals, which we map before you sign.
- A mainland company pays corporate tax at 9% on taxable income above AED 375,000, like any other company. The free zone QFZP 0% regime does not apply, but Small Business Relief can remove the tax for tax periods ending on or before 31 December 2029.
When the mainland is the right route
Government tenders require an onshore licence. Retail premises, restaurants, clinics, construction and any service delivered at client sites in the UAE all point the same way. A free zone company that serves onshore customers through workarounds usually spends what it saved on distributors and NOCs within a year. Our mainland vs free zone comparison sets out the figures for both.
The test is where the service is delivered. If your revenue depends on dealing with UAE customers in person (a shop, a government contract, an engineer on site), the mainland licence is what makes that revenue lawful, so it should be budgeted for rather than minimised. A free zone company is cheaper to set up, but for this kind of business it usually means setting up twice.
Foreign ownership after the 2021 reform
The 2021 ownership reform removed the requirement for a 51% local partner for most commercial and industrial activities. Your activity falls into one of three groups, and that group decides your structure. We check it against the emirate’s official activity list before anything is signed.
| Activity group | Ownership rules |
|---|---|
| Most commercial & industrial | 100% foreign ownership, with no local partner and no equity given away. |
| Strategic-impact list | Security, some transport and some oil-related activities still require Emirati participation. |
| Certain professional activities | Use a local service agent, who is paid a flat annual fee and holds no shares in your business. |
A local service agent is often confused with a partner. The agent takes a flat fee, holds no equity and has no claim on profit or control. If you are told in 2026 that a standard professional activity needs a 51% sponsor, get a second reading of the activity list.
What a mainland company costs
Budget for three blocks rather than one headline figure. The licence from the economic department starts at roughly AED 15,000. A physical office with a registered lease (Ejari in Dubai) is required, because a mainland licence needs a real place of business, and the visa allocation follows the floor space you lease. Added together, a realistic first year for a small services LLC comes to about AED 25,000–40,000.
That is why the mainland decision should rest on where your revenue comes from. The office is the largest recurring cost, and it exists because the licence type requires it. If that cost breaks the business model, the business probably belongs in a free zone. You can test the full figure in our setup-cost breakdown before you commit.
Approval steps and timeline
A standard activity is licensed in 2–3 weeks, and the order matters because each step depends on the one before. Initial approval reserves your trade name and activity. The Memorandum of Association is then notarised, the lease is registered against a real address, and the economic department issues the licence.
External approvals from the municipality, the health authority or civil defence add time only for regulated activities such as clinics, food outlets or construction. We identify them at the start so they do not delay the timeline halfway through. Where the paperwork, translations and government queues are heavy, our PRO services handle the counter work so you do not have to.
Office, visas and hiring on the mainland
Once the licence is issued, an establishment card links the company to the immigration and labour systems, and the visa allocation is calculated from the office area you lease: more space allows more visas. Each employee is registered with the Ministry of Human Resources and Emiratisation (MOHRE) and paid through the Wages Protection System (WPS), which routes salaries through approved channels so the authorities can see they are paid.
Two costs are easy to overlook at setup. End-of-service gratuity accrues for every employee from the first day and is a real liability in your accounts, and medical insurance is mandatory for every visa holder. We include both in the first-year model. If your growth plan depends on hiring, choose the office size for the visa allocation you will need next year as well as the desks you need today.
Corporate tax and VAT for a mainland company
A mainland company pays corporate tax at 0% on taxable income up to AED 375,000 and 9% above it, like any other UAE taxable person. The free zone QFZP 0% regime is not available on the mainland. Small Business Relief is: a resident company with revenue of AED 3M or less in each tax period (the current one and every earlier one) can elect to be treated as having no taxable income, for tax periods ending on or before 31 December 2029. It is not available to members of multinational groups, and losses from relief periods cannot be carried forward.
VAT is separate and depends on your supplies. Registration is mandatory once taxable supplies and imports exceed AED 375,000 over 12 months, and voluntary from AED 187,500. Because a mainland LLC usually trades with UAE customers, it tends to reach the threshold sooner than a holding company would, so plan the VAT registration as part of the launch.
Choosing between the mainland and a free zone
The decision turns on where your customers are. Serving UAE consumers, government bodies or on-site clients points to the mainland. Serving international clients or holding assets points to a free zone, sometimes with a mainland branch added later. Start from where your revenue comes from, and the licence type follows.
We recommend the mainland only when your revenue needs it. If a free zone fits, we will say so, and if the mainland is the only structure that makes your revenue lawful, it is better to set up correctly once than to move the company in year two.
Mainland company costs and timeline
Frequently asked questions
Is 100% foreign ownership really available?
Can I skip the office?
How long does mainland formation take?
Does a mainland company get 0% tax?
Do I still need a local sponsor?
Can a non-resident own a mainland LLC?
This is general information on UAE rules. It is not legal, tax or immigration advice for your situation. Rules and government fees change; we confirm the position for your facts in writing before you act.