---
name: draft-incorporation-package-uae-mainland
description: Use when preparing an incorporation package for a UAE mainland (onshore) company registered with a Department of Economic Development (DED) or equivalent emirate authority. Covers trade-name reservation, DED approval, MOA/AOA notarization, Ejari tenancy registration, trade-license issuance, UBO and Economic Substance Return filings, Corporate Tax registration with FTA, and the Federal Decree-Law 32/2021 enabling 100% foreign ownership for most sectors.
license: MIT
metadata:
  id: draft.incorporation-package-UAE-mainland
  category: draft
  practice_area: corporate
  jurisdictions: [UAE]
  priority: P1
  intent: [UAE mainland incorporation, DED company, UAE company formation, LLC UAE mainland, 100% foreign ownership UAE]
  related: [draft-incorporation-package-uae-freezone, draft-incorporation-package-difc, draft-employment-contract-uae, kb-corporate-uae]
  source: Louis — HAQQ Legal AI (github.com/sboghossian/mini-claude-for-legal)
  version: "1.0"
---

# Incorporation Package — UAE Mainland (Onshore)

## When to use this

Use this skill to prepare the document set and procedural checklist for incorporating a company on the UAE mainland — registered with the relevant emirate's Department of Economic Development (DED) or equivalent licensing authority (Abu Dhabi Department of Economic Development, Sharjah Economic Development Department, etc.).

A UAE mainland company can:
- Trade directly with UAE mainland customers without restrictions.
- Bid for government tenders (many reserved for mainland companies).
- Operate branches across the UAE.
- Sponsor employee visas (work permits) directly through MOHRE.

A UAE mainland company **cannot** benefit from free-zone tax exemptions — it is subject to UAE Federal Corporate Tax at 9% on taxable income above AED 375,000.

**100% foreign ownership**: Federal Decree-Law 32/2021 (Companies Law reform) removed the 51% UAE-national ownership requirement for most mainland business activities. Foreign investors can now hold 100% of mainland companies in most sectors. **Exceptions** remain in strategic/restricted sectors — verify the activity's ownership requirement before proceeding.

## Legal structures available

| Structure | Arabic | Description | Common use |
|---|---|---|---|
| **Limited Liability Company (LLC)** | شركة ذات مسؤولية محدودة | 1–50 shareholders; limited liability | Most commercial purposes |
| **Civil Company** | شركة مدنية | For licensed professions (accountants, lawyers, engineers, doctors) | Professional service firms |
| **Public Shareholding Company (PJSC)** | شركة مساهمة عامة | Publicly traded; 10+ founders; substantial capital | Listed companies; major enterprises |
| **Private Shareholding Company (PJSC)** | شركة مساهمة خاصة | Private; 3+ shareholders; higher capital requirements | Medium/large private companies |
| **Sole Establishment** | منشأة فردية | Single natural person; unlimited personal liability | Individual traders; small businesses |
| **Branch of foreign company** | فرع شركة أجنبية | Extension of foreign parent; no separate legal personality | Foreign firms wanting UAE presence |

## Step-by-step incorporation process (Dubai DED example)

### Step 1: Trade name reservation
- Reserve the proposed company name with Dubai DED through the DED portal or a typing centre.
- Name must be: in Arabic (mandatory); not already registered; not offensive or politically sensitive; not imply government affiliation without approval.
- English name alongside Arabic is permitted.
- Cost: nominal registration fee.
- Duration: trade-name reservation valid for 60 days; incorporate before expiry.

### Step 2: Initial DED approval
- Apply for initial approval from DED specifying the business activities.
- Activities must be on the DED's licensed activity register (DED Activity List).
- Some activities require pre-approval from sector regulators before DED issues initial approval:
  - Healthcare activities: Dubai Health Authority (DHA).
  - Financial activities: UAE Central Bank / SCA (Securities and Commodities Authority).
  - Educational activities: Knowledge and Human Development Authority (KHDA) or equivalent.
  - Food/hospitality: Dubai Municipality.
- Initial approval is not a license; it authorizes the company to proceed with formation steps.

### Step 3: MOA / AOA drafting and notarization
- Draft the Memorandum of Association (MOA) in Arabic:
  - Company name and purpose.
  - Shareholders and ownership percentages.
  - Share capital amount and paid-up status.
  - Management structure (Manager(s); Board).
  - Duration (perpetual is standard).
- Notarize the MOA before a Dubai Notary Public (or equivalent in other emirates).
- For 100% foreign-owned companies: no local sponsor or Local Service Agent required for most activities (post-Decree-Law 32/2021 reform).
  - **Exception**: certain service activities (government-liaison, specific professional licenses) may still require a Local Service Agent (LSA) — an Emirati national appointed as agent, not an owner, receiving a service fee.
  - **Strategic sectors** (defense, security, nuclear energy, post, telecommunications, water, electricity, pipelines, air/sea transport, pilotage) remain restricted to UAE national or government ownership.

### Step 4: Office lease (Ejari registration)
- A physical office in the relevant emirate is required for a mainland trade license.
- Lease the office space.
- Register the tenancy contract on the **Ejari** system (Dubai Land Department's online tenancy registration system).
- Ejari registration certificate is required for the trade-license application.
- **No virtual office**: UAE mainland companies must have a physical, demised office space. Shared / co-working addresses must be formally registered through approved co-working providers that have DED agreements.

### Step 5: Trade license issuance
- Submit to DED: initial approval, notarized MOA, Ejari certificate, shareholder documents, approval from sector regulator (if required).
- DED issues the Trade License.
- The Trade License specifies: company name, license number, legal form, activities, expiry date.
- Duration: 1-year license; renewable annually.

### Step 6: Chamber of Commerce membership
- Register with the Dubai Chamber of Commerce and Industry (or equivalent in other emirates).
- Membership provides: certificates of origin for export; attestation services; trade facilitation.
- Annual fee.

### Step 7: UBO register and corporate-governance filings
Under UAE Cabinet Decision 58/2020 (UBO Regulations):
- All UAE mainland companies must maintain a beneficial-ownership register.
- Declare all UBOs (natural persons controlling 25%+ of the entity).
- File the UBO register with the local licensing authority.
- Update on any change within 15 days.

**Economic Substance Regulation (ESR):** UAE Cabinet Resolution 57/2020 (as amended):
- UAE companies with income from qualifying activities (banking, insurance, investment fund management, headquarters business, shipping, distribution and service centres, intellectual property, financing and leasing) must:
  - Demonstrate adequate employees and physical assets in UAE.
  - Core income-generating activities performed in UAE.
  - File an annual ESR notification and report with the relevant authority.

### Step 8: Corporate Tax registration (FTA)
- Register with the Federal Tax Authority (FTA) for UAE Corporate Tax.
- Corporate Tax: 9% on taxable income exceeding AED 375,000 (effective for fiscal years starting 1 June 2023 onwards).
- Small Business Relief: businesses with revenue ≤ AED 3 million may elect for simplified tax treatment.
- Annual corporate tax return required.

### Step 9: VAT registration
- Register for VAT with FTA if taxable supplies exceed AED 375,000 per year (mandatory threshold) or AED 187,500 (voluntary).
- UAE VAT rate: 5%.
- VAT returns: quarterly (standard).

### Step 10: MOHRE (Ministry of Human Resources and Emiratisation) registration
- Register as an employer with MOHRE.
- Required before applying for employee work permits.
- Emiratisation quota: UAE mainland companies above certain size thresholds must comply with Emiratisation targets (UAE national hiring quotas).
- Work-permit capacity: based on office size and activity.

## Ownership structure for 100% foreign-owned companies

Federal Decree-Law 32/2021 enables full foreign ownership for most mainland activities. The process:
1. Confirm the company's activities are not in the restricted/strategic sector list.
2. Draft MOA with 100% foreign ownership (no UAE national as shareholder).
3. No local sponsor required in the MOA.
4. Note: for certain activities where a **Local Service Agent (LSA)** is required (government-related services), the LSA is engaged by service agreement, not as a shareholder. LSA fees are commercially agreed.

## Typical incorporation timeline

| Step | Duration |
|---|---|
| Trade name reservation | 1–3 business days |
| Initial DED approval | 1–5 business days |
| MOA drafting and notarization | 3–7 business days |
| Office lease and Ejari | 1–2 weeks |
| Trade license issuance | 1–3 business days after documents complete |
| Bank account opening | 3–6 weeks |
| MOHRE and FTA registration | 1–2 weeks |
| **Total** | **4–8 weeks** |

## Mainland vs. free zone — decision guide

| Factor | Mainland | Free zone |
|---|---|---|
| UAE mainland customers (direct sales) | Yes | No (need distributor or dual license) |
| Government tenders | Yes (most) | Limited |
| 100% foreign ownership | Yes (most sectors) | Always |
| Corporate tax | 9% (above AED 375K threshold) | 0% (qualifying activities) |
| Office requirement | Physical office mandatory | Flexi-desk available |
| Employment law | Federal Decree-Law 33/2021 | Same (most free zones) |
| Ease of setup | More steps | Fewer steps |
| Cost | Higher (office, notary, DED fees) | Lower (flexi-desk option) |

Many businesses incorporate both: a mainland LLC for direct UAE commercial operations and a free-zone or DIFC entity as the holding/IP company.

## Common mistakes

1. **Activity not on DED list** — conducting business outside licensed activities is an enforcement risk; ensure all activities are listed on the trade license.
2. **No physical office** — co-working without Ejari registration or DED-recognized address; trade license application will be rejected.
3. **100% foreign ownership in restricted sector** — not all activities are liberalized; verify before incorporation.
4. **ESR non-compliance** — mainland companies in qualifying activities must meet ESR tests; penalties up to AED 100,000 for non-compliance.
5. **Corporate tax registration missed** — FTA registration is mandatory; failure to register triggers administrative penalties.
6. **Emiratisation quota non-compliance** — mainland companies above 50 employees with regulated activities must meet Emiratisation quotas; failure restricts new work-permit applications.

## Related skills

- [[draft-incorporation-package-uae-freezone]] — free-zone alternative for 100% foreign ownership without mainland operations
- [[draft-incorporation-package-difc]] — DIFC for financial services and common-law environment
- [[draft-employment-contract-uae]] — UAE federal employment contracts for mainland employees
- [[kb-corporate-uae]] — UAE company law reference pack (Federal Decree-Law 32/2021 and implementing decisions)