Mainland License
Definition
Pillar page for mainland business setup in the UAE.
Also known as
- Onshore License
- Mainland Commercial License
- DED License
- Economic Department License
Attributes
| Type | Commercial license |
|---|---|
| Jurisdiction | United Arab Emirates |
| Governing authority | Department of Economic Development (DED) |
| Applicable law | UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021) |
| Foreign ownership | Up to 100% foreign ownership permitted for most activities since 2021 |
| Currency | AED |
| ISO country code | AE |
What it is
A mainland license is the official permit issued by an emirate's Department of Economic Development (DED) — or its equivalent, such as the Abu Dhabi Department of Economic Development (ADDED) — authorizing a company to operate within the UAE's onshore (non-free zone) jurisdiction. Unlike free zone licenses, which restrict commercial activity to designated geographic zones, a mainland license permits direct trade with the UAE domestic market, eligibility for government and semi-government tenders, and the ability to establish offices anywhere in the emirate of registration. Since the 2021 amendments to the UAE Commercial Companies Law (Federal Law No. 32 of 2021), foreign investors may now own 100% of mainland companies across most commercial and industrial activities, removing the previous requirement for a UAE national sponsor in many sectors. Certain strategic activities — including commercial agency, military goods, and specific professional services — may still carry ownership restrictions or require additional approvals. The license is issued after company name reservation, initial approval, Memorandum of Association (MOA) or Local Service Agent (LSA) agreement, office tenancy contract (Ejari), and final DED approval. Licenses are valid for one year and require annual renewal, with associated fees varying by emirate, activity type, and legal structure (LLC, sole proprietorship, civil company, branch).
Key characteristics
- Issuing Authority
- Department of Economic Development (DED) of each emirate, or its equivalent (ADDED, Sharjah DED, etc.).
- Market Access
- Unrestricted trade throughout the UAE and eligibility for government tenders.
- Foreign Ownership
- Up to 100% permitted for most commercial and industrial activities since 2021; exceptions remain for strategic sectors.
- Office Requirement
- Mandatory physical office with registered Ejari or equivalent tenancy contract.
- Validity & Renewal
- Typically one year; annual renewal required with fee payment and compliance verification.
- Governing Law
- Federal Law No. 32 of 2021 (Commercial Companies Law) and emirate-level DED regulations.
How it works
- Determine business activity and legal structure, checking whether the activity falls under the DED's positive list for 100% foreign ownership.
- Reserve a trade name through the DED's online portal or approved service centers, ensuring compliance with naming conventions.
- Obtain initial approval from the DED, which validates that the activity and structure are permitted.
- Draft and notarize the constitutional documents: MOA for LLCs, or LSA agreement for professional licenses requiring a local service agent.
- Secure a physical office space and register the tenancy contract through Ejari (Dubai) or the emirate's equivalent system.
- Submit final documentation for DED review, pay license fees, and receive the commercial license.
- Complete post-licensing requirements: register with the Federal Tax Authority for corporate tax (if applicable), open a corporate bank account, and obtain any sector-specific permits (e.g., SIRA for security services, MOHRE for employment).
- Renew annually before expiry to avoid penalties and maintain good standing.
Types of Mainland License
| Type | Description | When it applies |
|---|---|---|
| Commercial License | Covers trading, retail, wholesale, and general commercial activities. | For businesses buying and selling goods, including import/export and e-commerce with physical stock holding. |
| Professional License | Permits the provision of services based on professional expertise. | For consultancies, legal practices, accounting firms, and individual practitioners; may require a Local Service Agent. |
| Industrial License | Authorizes manufacturing, processing, and industrial production activities. | For factories, assembly plants, and production facilities; requires approval from additional authorities such as the Ministry of Industry and Advanced Technology. |
| Tourism License | Covers travel agencies, tour operators, and hospitality-related services. | For businesses regulated by the Department of Tourism and Commerce Marketing (Dubai) or equivalent emirate tourism authority. |
| Freight Forwarding & Logistics License | Permits transportation, warehousing, and supply chain management services. | For logistics providers, shipping agents, and customs clearance businesses operating across UAE borders. |
Examples
A German engineering firm establishes a mainland LLC in Dubai under the DED to bid directly on Dubai Municipality infrastructure contracts, which free zone companies cannot do without a local agent. An Indian IT consultancy sets up a civil company in Abu Dhabi with 100% foreign ownership to serve ADNOC and other government entities, leveraging the mainland license's unrestricted market access. A Saudi retail chain opens a mainland branch in Sharjah to operate storefronts across multiple emirates without the geographic constraints of a single free zone. A British food and beverage group uses a mainland commercial license in Ras Al Khaimah to import goods directly and distribute to hotels and restaurants throughout the UAE.
Why it matters
A mainland license is the gateway to the UAE's full domestic economy. It eliminates the trade barriers that free zone companies face when selling directly to the local market, which otherwise requires a local commercial agent or distributor. For businesses targeting government contracts, state-owned enterprise supply chains, or retail presence across multiple emirates, mainland status is often non-negotiable. The 2021 ownership reforms have made mainland formation competitive with free zones on foreign ownership, while preserving superior operational flexibility. Corporate tax registration, VAT compliance, and employment visa quotas are all streamlined under the mainland framework, with direct integration into federal systems. For businesses planning long-term UAE market presence, brand establishment, or eventual regional headquarters expansion, a mainland license provides the institutional credibility and legal foundation that free zone structures may lack in certain stakeholder contexts.
Common misconceptions
Misconception
Mainland companies still require a UAE national to hold 51% ownership.
Reality
Since Federal Law No. 32 of 2021, 100% foreign ownership is permitted for most mainland commercial and industrial activities; only specific strategic activities retain local ownership requirements.
Misconception
Free zone companies can operate in the mainland without restrictions.
Reality
Free zone companies generally cannot conduct direct commercial activity in the mainland without establishing a mainland branch, appointing a local commercial agent, or obtaining a separate mainland license.
Misconception
Mainland licenses are always more expensive than free zone licenses.
Reality
Total cost depends on activity, office requirements, and visa quotas; mainland licenses may be more cost-effective for businesses needing multiple visas or large office space without free zone premiums.
Misconception
A mainland license from one emirate allows automatic operation in all emirates.
Reality
A mainland license is issued by a specific emirate's DED and permits operation throughout the UAE, but additional registration or branch setup may be required for certain activities in other emirates.
FAQs
- How long does it take to get a mainland license in Dubai?
- Typically 1 to 4 weeks, depending on document readiness, activity type, and whether additional approvals (e.g., external ministry clearance) are required.
- What is the minimum investment for a mainland company in the UAE?
- There is no federal minimum capital requirement for most LLCs, though some activities may require proof of financial capacity; specific emirates or activities may impose minimum capital rules.
- Can a mainland company have 100% foreign ownership?
- Yes, for most commercial and industrial activities under the 2021 Commercial Companies Law; professional activities may require a Local Service Agent without equity stake.
- What is the difference between a mainland license and a free zone license?
- A mainland license allows unrestricted UAE market access and government contracting; a free zone license offers 100% foreign ownership and tax benefits but restricts direct mainland trade without additional structure.
- Is a physical office mandatory for a mainland license?
- Yes, all mainland companies must maintain a physical office with a valid Ejari or equivalent tenancy contract; virtual offices are not permitted for initial licensing.
