Mainland Company Formation in the UAE: The Legal Framework Explained
Full UAE market access under Federal Decree-Law No. 32 of 2021 — explained by TFZ's structuring team
A mainland (onshore) company is an entity incorporated under the UAE Commercial Companies Law — Federal Decree-Law No. 32 of 2021 — and licensed by the economic department of the emirate in which it is established. Unlike free zone and offshore entities, a mainland company may conduct business throughout the UAE without territorial restriction, contract with government entities, and expand through branches in any emirate. Below is the legal position, stated plainly.
Jurisdictions: Seven Emirates, Seven Licensing Authorities
Company licensing is an emirate-level function. Each of the seven emirates — Dubai, Abu Dhabi, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah — licenses mainland companies through its economic department, applying the federal Commercial Companies Law alongside local regulations.
Dubai's Department of Economy and Tourism (DET) is the largest and most internationally recognised registry: Dubai maintains over 215,000 active licenses, issued nearly 19,000 new licenses in Q1 2025 alone (approximately 59% of all UAE licenses in that period), and roughly 200,000 new economic licenses were issued UAE-wide in 2024.
Foreign Ownership: What the Law Actually Says
The decisive reform came with Federal Decree-Law No. 26 of 2020 and the subsequent Federal Decree-Law No. 32 of 2021 (in force from 2 January 2022), which abolished the historic requirement for 51% UAE national shareholding in onshore limited liability companies. Today, 100% foreign ownership is permitted for the great majority of commercial and industrial activities.
The exceptions are activities of “strategic effect” — such as defence and security — determined pursuant to the law, where ownership conditions still apply, and certain professional activities where individual emirates impose specific requirements. TFZ verifies the ownership position for your precise activity code before incorporation, in writing.
Legal Benefits of Mainland Status
Unrestricted UAE trade
No statutory territorial limitation on where the company may transact within the UAE.
Government procurement eligibility
Federal and emirate procurement is, as a rule, open to onshore-licensed entities.
Corporate flexibility
The LLC under Decree-Law 32/2021 permits 1 to 50 shareholders, with a single-shareholder LLC expressly recognised.
No minimum capital deposit
The law requires capital “sufficient to achieve the company's purpose” rather than a fixed statutory minimum for LLCs.
Scalable immigration quota
Employment visa allocations are linked to licensed premises, permitting substantial headcount growth.
Industries Where Mainland Is the Correct Structure
Any activity whose customers are inside the UAE: retail and F&B, healthcare and clinics (with Dubai Health/DoH approvals), contracting and real estate services (RERA/DLD regulated), transport (RTA regulated), education (KHDA regulated), and professional services to local clients. Where an activity is regulated, the license is issued subject to the relevant regulator's approval — a sequencing question TFZ manages as standard.
Dubai's own registration data shows online retail leading recent new-license activity with roughly 4,700 registrations in a year.
Cost, Premises and Formation
TFZ mainland packages start from AED 16,500 including the trade license and one investor residence visa.
Mainland companies generally require licensed premises evidenced by a tenancy registered in the Ejari system (established under Dubai Law No. 26 of 2007 governing landlord-tenant relations), and premises size determines visa quota.
Formation typically completes within 1–2 weeks absent external approvals.
Banking, Compliance and Visas: The Statutory Obligations
Bank account
Mainland entities present the most straightforward compliance profile to UAE banks: physical premises, verifiable local activity and Ejari documentation satisfy the customer due diligence requirements banks apply under Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering. Accounts typically open within 2–4 weeks with a properly prepared file.
Ongoing compliance obligations
| Obligation | Statutory Basis |
|---|---|
| Corporate tax | Registration and annual filing under Federal Decree-Law No. 47 of 2022; 9% on taxable income above AED 375,000 (threshold fixed by Cabinet Decision No. 116 of 2022), with Small Business Relief available by election for qualifying resident persons under Ministerial Decision No. 73 of 2023 |
| VAT | Registration mandatory at AED 375,000 of taxable supplies under Federal Decree-Law No. 8 of 2017; returns generally due within 28 days of each tax period |
| UBO register | Maintenance and filing of a real beneficiary register under Cabinet Decision No. 109 of 2023 |
| Books and records | Accounting records must be maintained and retained (generally seven years) under the Commercial Companies Law and Tax Procedures Law (Federal Decree-Law No. 28 of 2022) |
| Employment | MOHRE-registered contracts and Wage Protection System compliance under Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations |
Visas
Investor/partner and employment residence permits are issued under Cabinet Resolution No. 65 of 2022 concerning the Entry and Residence of Foreigners, with family sponsorship available to residents meeting the income and accommodation criteria. Mainland quota scalability remains its principal immigration advantage.
How to Decide
As a rule of decision: where UAE-source revenue, government contracting or significant headcount is anticipated, mainland is the legally efficient structure; where income is foreign-source or business-to-business international, a free zone comparison is warranted — including the corporate tax consequences of each. TFZ provides this comparison, with the statutory basis for each recommendation, without charge.
Legal note: this page provides general legal information current at the time of publication, not legal advice for your specific circumstances. Legislation and executive decisions are amended from time to time; TFZ confirms the current position for every client engagement.
Frequently Asked Questions
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