INTRODUCTION
Mainland Dubai has emerged as a strategic business hub for global investors. Establishing a company on the Dubai mainland confers significant advantages, from unfettered access to the entire UAE market to the credibility of operating under Dubai’s robust legal framework. The UAE consistently ranks high in investor confidence and financial stability. Dubai’s strategic location bridges East and West, with world-class logistics enabling access to half the world’s population. The city’s cosmopolitan environment (home to nearly 90% expatriates) and pro-business policies make it an ideal springboard into the Middle East, North Africa, and South Asia markets.
Mainland companies in Dubai enjoy significant advantages, including unrestricted market access across the UAE and the ability to bid on government contracts, benefits not typically available to free zone entities. Thanks to Federal Decree-Law Number 26 of 2020, many businesses are now eligible for 100% foreign ownership, eliminating the earlier 51% local sponsor requirement for most sectors. These companies also benefit from Dubai’s world-class infrastructure, no currency controls, minimal trade barriers, and a favourable tax regime, 0% personal income tax and a competitive 9% corporate tax with exemptions for small businesses. Additionally, mainland firms can sponsor unlimited visas (based on office space), open branches across the UAE or abroad, and scale easily. Supported by a stable and evolving legal framework that respects international norms, including arbitration under the New York Convention, Dubai’s mainland setup offers a powerful mix of operational freedom, scalability, and investor protection.
TYPES OF COMPANIES
Article 9 of the UAE Commercial Companies Law (Federal Decree-Law Number 32 of 2021) requires that any company established onshore adopt an approved legal form. The main types of companies allowed in mainland Dubai, as per the Commercial Companies Law, are as follows:
Limited Liability Company (LLC) Article 71 of the Federal Decree-Law Number 32 of 2021:
The LLC is the most common form for SMEs and general commercial businesses. It can have from 1 to 50 shareholders, with liability limited to each shareholder’s capital contribution. An LLC’s share capital must be sufficient for its purpose; the law no longer mandates a fixed minimum. Notably, LLCs may not offer shares to the public, though an LLC can convert to a joint stock company later if it wishes to list.Private Joint Stock Company (Pr.JSC) Article 257 of the Federal Decree-Law Number32 of 2021:
A Private JSC is similar to a corporation that is not publicly listed. It requires at least 2 shareholders (up to 200) and has share capital divided into equal shares. The minimum capital is AED 5 million, fully paid up, and the shareholders’ liability is limited to their shares. A Private JSC cannot offer shares via public subscription, but a private JSC can later convert to a Public JSC with regulatory approval.Public Joint Stock Company (PJSC) Article 105 of the Federal Decree-Law Number32 of 2021:
A PJSC is a company whose shares can be offered to the public and traded on a stock exchange. It is the form required for banks, insurance companies, and any company seeking public investment. A PJSC requires at least 5 shareholders (unless it’s a government-founded entity) and a minimum issued capital of AED 30 million. Founders must subscribe to a portion of the shares and then offer the rest in an IPO, with approval of the Securities and Commodities Authority. Shareholders of a PJSC have limited liability to their shareholding, and the company must append “PJSC” to its name.Limited Partnership Article 62 of the Federal Decree-Law Number32 of 2021:
It consists of at least one “general partner” with unlimited liability (often must be a UAE national or a UAE-owned company) and one or more who have liability capped at their investment. The limited partners are essentially passive investors and cannot participate in management; otherwise, they risk losing their limited liability protection. This structure might be used for certain investment or real estate ventures. As with general partnerships, this form is infrequently used by foreign investors due to the need for an unlimited-liability partner.General Partnership Article 39 of the Federal Decree-Law Number32 of 2021:
This is a partnership of two or more individuals who are jointly and severally liable for the business’s debts without limitation. In other words, partners’ personal assets can be used to satisfy business liabilities. Given this unlimited liability, such partnerships are typically restricted to UAE nationals or family members, and are rare for foreign investors. General partnerships do not have a share capital requirement since partners are personally liable, and the business name usually includes the names of the partners.Branch of a Foreign Company:
A foreign company can establish a branch office on the mainland to conduct business within Dubai without creating a new legal entity. The branch is legally part of the parent company, not a separate LLC and can engage in the activities of its parent company in the UAE. A branch cannot conduct trading activities on its account (import/export trading is limited to local companies), but it can provide services or act in the UAE on behalf of the parent. A representative office is similar to a branch, but is limited to marketing and liaison activities; it cannot generate revenue in the UAE. Branches and representative offices must also follow the Foreign Companies provisions of the Companies Law and register in the Foreign Companies Register.
Dubai mainland offers various company structures to meet diverse business needs. The LLC is ideal for SMEs, providing limited liability and flexible ownership. Pr.JSCs and PJSCs cater to larger ventures, with PJSCs permitting public share offerings. Partnerships entail unlimited liability and are primarily used by UAE nationals. Foreign company branches facilitate local operations without the need to form a new entity, although they come with limited trading rights. Each structure balances liability, ownership, and scalability to accommodate different business goals.
REQUIRED DOCUMENTATION
Setting up a Dubai mainland company involves preparing a comprehensive set of documents for the authorities. The Department of Economy and Tourism (DET) and other regulators will require personal identification, corporate documents, and specific approvals depending on the ownership structure. The key documentation needed is as follows:
Identification Documents:
Passport copies of all individual shareholders and proposed managers are required. The passports should be valid for at least 6 months. If any shareholder or manager is a UAE resident, a copy of their Emirates ID and UAE residence visa must also be provided. Passport-sized photos are usually needed for the government records. UAE nationals will provide a copy of their Emirates ID.No Objection Certificate (NOC):
If a shareholder or manager is already on a UAE residence visa (e.g. employed by another company or under a spouse’s sponsorship), an NOC may be required from their current sponsor or employer. These letters ensure that all relevant parties are aware of and consent to the new business activity. No NOC is needed for foreign investors who are not UAE residents; instead, a copy of the entry stamp or visit visa might be used in the file.Local Partner Documents:
If the company has a Local Partner or Local Service Agent, it must include copies of that UAE national’s passport and Emirates ID, as well as the signed sponsorship agreement or local service agent agreement. In many cases, the local partner may be a corporate nominee (e.g. a local company owned by nationals). In such instances, the corporate partner’s trade license and incorporation documents are required.Trade Name Reservation Certificate:
Before finalising the company, the chosen company name must be approved by DET and reserved. The certificate of trade name reservation will be part of the documentation. It confirms the name is unique and meets Dubai’s naming rules. Trade name reservation is one of the first steps (discussed in the process section), and the certificate is valid for a set period (often 6 months).Initial Approval Certificate:
Similarly, the DET will issue an initial approval once it reviews the proposed ownership and business activity. The initial approval, sometimes called a pre-approval or investor approval, is essentially the government’s “no objection” to proceed with the company setup. It usually precedes steps like signing the Memorandum or signing a lease. This certificate is valid for a limited time (often 6 months) and must be included in the final documentation pack.Memorandum of Association (MoA):
The Memorandum of Association is the constitutional document of the company, detailing the company’s name, objectives, share capital, ownership structure, management, and governance rules. For LLCs and joint stock companies, an MoA (or Articles of Association) must be drafted and signed by all partners in front of a notary (or via e-signature if available). The MoA must adhere to the UAE Companies Law provisions, for example, listing the capital and each shareholder’s share. If a Local Service Agent (for a professional firm or branch), then an LSA agreement notarised contract with the local agent is required instead of an MoA. The notarised MoA/LSA is a critical document that will be submitted to DET. It officially forms the company’s legal basis.Tenancy Contract (Ejari):
Every mainland company must have a physical office address. A tenancy contract (lease) will be needed for an office or shop that meets the requirements for the license. The lease must be registered with the Dubai Land Department’s rental registration system, which then issues an Ejari certificate. A duly attested Ejari contract is required by DET to ensure the business has a legitimate premise. This is typically provided in the final stage of licensing. For initial approval, the lease is not needed, but it will be needed to collect the license. Dubai Municipality may inspect or approve the site for certain activities, e.g. a restaurant requires municipality health department approval for the premises, see external approvals below.Shareholder’s Resolution (for Corporate Shareholder, if any):
If any shareholder is a company (corporate investor) rather than an individual, it must submit that company’s board resolution authorising the investment, plus documents like the Certificate of Incorporation, Memorandum of that company, and a Power of Attorney for the person acting on its behalf. All foreign corporate documents must be attested by the UAE embassy and the Ministry of Foreign Affairs. This assures Dubai authorities that the foreign company has duly approved setting up the UAE entity and designating a representative.Additional Approvals and Permits:
Depending on the business activity, extra documentation from relevant ministries may be needed. For example, professional qualification certificates (attested diplomas, etc.) for certain professions (doctors, teachers) are required to get approval from bodies like the Dubai Health Authority (DHA) or the Knowledge and Human Development Authority (KHDA). For trading in pharmaceuticals, the Ministry of Health approval is needed, etc. Dubai’s system will notify of these external approval requirements, which often entail providing specialised documents.Proof of Fee Payment:
Finally, evidence of having paid the various government fees (trade name reservation fee, initial approval fee, etc.) may be required for record-keeping. In practice, once the payment is done, receipts are generated in the system, but it’s wise to keep copies of payment receipts in the application bundle to avoid any doubt.
Ensuring all these documents are prepared and in order will make the company registration process much smoother. Missing or improperly attested documents are a leading cause of delays or rejections.
STEP-BY-STEP PROCESS TO REGISTER
Setting up a mainland company involves multiple stages across different authorities. Below is a step-by-step guide integrating the requirements of Dubai’s Department of Economy & Tourism (DET) and other relevant bodies like the Ministry of Human Resources & Emiratisation (MOHRE) and Dubai Municipality.
Choose the Business Activity and Legal Structure:
Begin by clearly defining what business activity will be conducted, as per the official UAE activity list. Dubai has hundreds of specific business activities, and the company license will be issued in line with these. Ensure that the activity is permitted on the mainland. Along with the activity, decide the appropriate legal structure (LLC, branch, etc., as discussed above) that suits the ownership and liability preferences. This is a crucial first step because many subsequent requirements for a local partner, a capital amount, and external approvals depend on the chosen activity and structure. For instance, a consulting service might be best as a civil company with 100% foreign ownership, whereas a trading business would be an LLC. Dubai’s Business Activity Guide on the DET website can help identify if the chosen activity needs special permits.Reserve a Trade name:
Select a unique name for the company and apply for trade name reservation with DET. The name must comply with UAE naming rules: it cannot violate public morals or include prohibited terms, it should not contain names of government or religious entities, and if it includes a person’s name, that person must be a partner in the business. The name also must include the legal form abbreviation (e.g. “LLC” or “FZE”) as a suffix. The name can be reserved online via the DET e-services portal or through approved service centres. If the name is approved, DET issues a Trade Name Reservation Certificate, usually within a day or two.Apply for Initial Approval:
With the trade name in hand, the next step is to obtain initial approval from DET. Initial approval is the formal No Objection Certificate from the Dubai government to the proposed company. It confirms that the authorities have no objection to setting up the business, the chosen activity is generally acceptable, and (if applicable) the foreign investors are cleared to proceed. To apply, fill out the initial approval application either online via the Invest in Dubai platform or at a service centre, and submit the passport copies of owners, proposed shareholding structure, and a brief description of the business. If any owner is a UAE resident, include their visa/Emirates ID and NOC as needed. If the company is 100% foreign-owned, DET may require a simple acknowledgement that the activity is not on the restricted list; if a local partner or LSA (Local Service Agent) is involved, their details are included. The government will run a security check on foreign individuals (standard procedure); hence, sometimes, initial approval is called “Investor Security Approval.” Certain nationalities or sensitive activities might take a bit longer as they go through security clearance. Once approved, DET issues the Initial Approval Certificate. This certificate is typically valid for 6 months, during which the remaining steps should be completed.Obtain Special Permits or External Approvals:
Depending on the chosen activity, additional approvals may be needed from other government ministries or authorities before the license is finalised. These are commonly known as external approvals or NOCs.MOHRE (Ministry of Human Resources & Emiratisation) Approval:
If setting up an employment agency or recruitment company, approval from the Ministry of Human Resources & Emiratisation would be needed.Dubai Municipality (DM):
Dubai Municipality’s relevant department must inspect and approve the facility for health and safety compliance for businesses like restaurants, food trading, or salons. In practice, DM approval for a restaurant involves submitting kitchen layouts and obtaining a food permit. Similarly, a construction contracting company might need a DM Building Department approval and to register an engineering manager with the Municipality.Sector Regulators:
Various industries have their regulators. For example, real estate brokerage businesses must get RERA (Real Estate Regulatory Agency) approval; travel agencies need DTCM (Department of Tourism and Commerce Marketing) approval; legal consultancies require a license from the Ministry of Justice; financial investment firms might need Central Bank or Securities Authority approval, and so on.Other Emirates’ Approvals:
If the company operates in a regulated sector at the federal level (like medical supplies, telecom, education), approvals from federal bodies like the Ministry of Health, TRA (Telecom Regulatory Authority), or KHDA (Knowledge & Human Development Authority) might be needed.Drafting the Memorandum of Association and Notarising it:
With initial clearance given, the company’s constitutional documents can be formalised. Prepare the Memorandum of Association (MoA) for the company, in Arabic. Dubai’s DET provides standard MoA templates for LLCs, which include all required clauses (shareholding, capital, profit share, management, quorum, etc.), and these can be generated through authorised typing centres or the Invest in Dubai portal. If the default template is used, simply fill in the variables (names, addresses, shares, capital, etc.) and ensure all partners or their legal representatives are present to sign. All shareholders or their power of attorney holders must sign the MoA in front of a public notary in Dubai. The MoA is then stamped and notarised, making it legally binding. For a sole proprietorship or civil company, instead of an MoA, a signature on a Local Service Agent (LSA) Agreement with a UAE national agent will be required. After notarization, the original notarised MoA and a notarised copy will be received and will go into the application file.Leasing Office and Registration of Ejari:
By law, every mainland business must have a physical address in Dubai that meets the requirements of the license. Rent a commercial space appropriate for the business activity. Once the tenancy contract is signed with the landlord, register it with Ejari so that an Ejari certificate is issued. The Ejari registration essentially records the lease with the Dubai Land Department; DET coordinates with that system.Final Submission of Documents to DET:
At this point, all the documents need to be compiled, such as the trade name certificate, initial approval, notarised MoA (or LSA), Ejari certificate and lease, copies of all partners’ passports/IDs, and any external approval letters obtained. Submit the complete incorporation application to DET (through the counter or online). DET will verify that all required documents are in order. If everything is satisfactory, DET will issue a Payment Voucher or invoice for the license fees. This is essentially an instruction that the license is approved pending payment. In summary, the final submission step is where the DET gives the green light that all conditions are met to establish the company.Pay the License Fee and Collect the License:
After final approval, payment of the required government fees is necessary to obtain the license. The fees will include the license issuance fee, name reservation fee, initial approval fee, registration fees, and possibly Dubai Municipality market fees. Once payment is made, DET will issue the Trade License, which is the official document (a certificate) that states your company name, license number, activity, owners, etc., and confirms you are legally registered. Along with the license, the Dubai Chamber of Commerce certificate of membership is received, and the company’s commercial registration (CR) number in the DET system.Post-Incorporation Registrations:
After obtaining the trade license, there are a few additional steps to operationalise the business:Register with MOHRE:
This creates a Labour Establishment Card for the company, enabling it to hire employees in the UAE. Open a profile for the company in the MOHRE system to get a unique company code. This is required to apply for work permits for any staff. Every mainland company should be registered with MOHRE, because even partners need labour cards to take up an active role.Register with GDRFA (Immigration Department):
Open a file with the General Directorate of Residency and Foreigners Affairs to get an Immigration Establishment Card. This allows the company to sponsor residence visas for owners and employees.Tax Registration:
If the business’s taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 annually, it is necessary to register for VAT (Value Added Tax) in the UAE. VAT compliance is crucial as it involves accurate record-keeping and timely submissions to avoid penalties.Other Post-License Steps:
These include opening a company bank account, UAE banks will require a trade license, MoA, passport copies, etc., for obtaining any operational permits.
By following these steps, the Dubai company formation process will be effectively done. The government has also launched initiatives to streamline this, such as the Invest in Dubai portal, which provides a one-stop online interface for many steps. In fact, in some cases, an investor can complete the entire registration online for a simple license.
TIMELINE FOR COMPANY REGISTRATION
The standard mainland licensing steps can be completed quite rapidly if all documents are in order. The typical time frames for each stage of the process, assuming a straightforward LLC with no major external approvals required:
Trade Name Reservation (1–2 working days):
In many cases, online trade name approval is granted within hours, but allows a day or two in case of high volume or if the name requires review. If the first name is rejected and you apply for another, that could add another day.Initial Approval (1–3 working days):
For most investors, initial approval is quick, often within 1 day if no complications. The process might stretch to a few days if there are multiple foreign partners, each requiring clearance or if the application is submitted right before a weekend.MOA Drafting & Notarization (1–2 days):
Preparing the MOA can be done in a matter of hours at a typing centre. The timing mainly depends on coordinating all partners to sign. If all partners or their attorneys are available in Dubai, the notarization itself takes only about an hour at the notary public.Tenancy Contract & Ejari (1–3 days):
This can vary widely. If you have already identified an office and negotiated the lease early, you might have this done in parallel with other steps. Ejari registration itself is quick (same day). The time-consuming part is finding the right premises and signing the lease, which can take anywhere from a day to a couple of weeks, depending on your requirements.External Approvals (if applicable) add 1–2 weeks (average):
This is a wild card: some special approvals are quick, a NoC from an authority could be 2-3 days, while others are more involved. A Ministry of Finance approval for a Money Exchange license could take a couple of months due to stringent checks. However, for the majority of businesses that don’t need such approvals, this is not a factor.Final Submission and Payment (3–7 working days):
Once you have the MoA, lease, etc., you submit to DET for final processing. DET’s verification and preparation of the license typically is done within 1-2 days. Payment can be made immediately once the voucher is issued. The license issuance after payment is often the same day or the next day.
In total, a straightforward mainland company can be up and running in approximately 1 to 2 weeks. Many investors indeed form their Dubai companies in about 10 business days. On the other hand, if external approvals or complex documentation are involved, or if the investors are overseas and not immediately available to sign, the process can extend to 3–6 weeks. If any external NOCs are needed, those might be initiated around Day 2-4 and completed by Day 10-15, with the final DET submission happening thereafter.
COST BREAKDOWN
Dubai mainland company, it’s essential to budget for the various costs involved. These include government fees for registration and licensing, as well as related expenses like notarization, visas, and, if applicable, local agent fees or capital requirements. The cost breakdown is as follows:
Trade License Issuance Fees:
This is the primary fee for the business license itself, paid to the Dubai Department of Economy & Tourism. The amount can vary based on the type of license (commercial, professional, industrial) and the activity. A commercial license costs around AED 24,500 in government fees. A professional license for a civil company or sole proprietorship tends to be a bit cheaper, starting around AED 10,000 for a simple single-owner professional firm. An industrial license usually costs more, partly because of additional clearances and potentially larger MOHRE fees. These figures include various sub-fees such as the registration fee and license fee.Name Approval & Initial Approval Fees:
These are relatively minor one-time fees. Reserving a trade name might cost in the range of AED 620 (approx), depending on the name (if it’s a foreign language or contains certain words, extra fees apply). Initial approval issuance, similarly, might be a few hundred dirhams. Often, these are paid upfront during those steps and are reflected in the payment voucher. They are not large amounts, but should be noted.Notarisation Fee for MoA:
The Dubai notary public charges a fee for notarising the Memorandum of Association or Local Service Agent agreement. For a standard LLC with nominal capital, the fee might be on the order of AED 1,000 – 3,000. If the share capital is high, the fee can increase as it’s partly based on capital, usually 0.25% of capital if the capital is above AED 50,000, with some caps. Many LLCs keep the capital modest, like AED 100,000, to avoid huge notarisation fees. A civil company LSA agreement notarization is typically a fixed few hundred dirhams. This is a one-time cost at incorporation.Local Service Agent / Sponsor Fee:
If a Local Service Agent or a local nominee partner is engaged, the UAE national will usually charge an annual fee for their service. This is a privately negotiated amount and is not stipulated by the government. For simple professional licenses, LSA fees might range from AED 5,000 to AED 15,000 per year, depending on the stature of the agent and the nature of the business. For local partner arrangements where the UAE local is a 51% shareholder on paper, often a fixed annual sponsorship fee is agreed could be anywhere from AED 20k to AED 100k+ for prominent local sponsors or complex businesses. These costs can vary greatly, but must be budgeted as a recurring expense if your business model requires local participation. Fortunately, with 100% foreign ownership now allowed in most cases, many investors can avoid this cost entirely.Share Capital:
Unlike some countries, Dubai does not impose an up-front capital deposit for LLCs in practice. However, for certain types of companies, capital must be paid up and evidenced: e.g., a Public JSC must have its AED 30 million capital fully paid and bank-certified before the IPO; a Private JSC’s AED 5 million must be fully paid.Branch of Foreign Capital:
If the company is a branch of a foreign company, in addition to the normal license fees, a bank guarantee of AED 50,000 must be lodged with the Ministry, which is refundable upon closing the branch. And if the business requires bank guarantees or deposits for regulatory purposes, those funds need to be set aside.
To summarise, typical government fees may be roughly around AED 10k-15k to DET for a basic license (inclusive of name, initial approval, license, and small miscellaneous fees). Add AED 2k for notarization and attestation expenses. Office rent is separate could be AED 15k–30k for a small startup space. So, many startups see an initial outlay in the range of AED 30k–50k all-in to get fully licensed and set up, including rent.
WINDING UP AND INSOLVENCY PROCEDURES
Dubai and the UAE federal law provide a clear framework for winding up (liquidating) a company, as well as a modern bankruptcy regime to handle insolvency and restructuring. Below, we outline the key points for closing a mainland company.
Voluntary Liquidation:
If the shareholders decide to close the company, the company’s trade license must be formally cancelled, and the company liquidated. It’s not enough to simply stop doing business; failing to cancel the license can result in fines piling up over time. The license cancellation process on the mainland depends on the legal form of the company:For Sole Establishments and Civil Companies:
The process is relatively simple. Apply to DET for cancellation and obtain clearances from relevant departments (a final audit of obligations). Specifically, get an NOC from MOHRE confirming all employee relations are settled and the labour establishment card is cancelled, and from GDRFA confirming any visas under the company are cancelled. There is a need to close utilities and lease agreements. Once clearances are obtained, DET will cancel the license. There is no need for appointing a liquidator since these forms don’t have share capital to liquidate; it’s essentially deregistering the license.For LLCs, Joint Stock Companies, Partnerships (any company with share capital or multiple partners):
The process is more involved and happens in two stages:Stage 1 - Resolution and Liquidation Notice:
The shareholders must pass a notarised resolution (e.g. a board or general assembly resolution) deciding to liquidate the company and appointing a licensed liquidator. A liquidator can be an audit firm or an insolvency practitioner authorised to operate in the UAE. Obtain an official letter from the chosen liquidator accepting the appointment. Then, submit the resolution and liquidator’s acceptance to DET with a license cancellation application. DET will issue a Liquidation Certificate, also known as liquidation approval. Publish a notice of the company’s liquidation in two local newspapers (in Arabic and English). This notice announces that the company is being dissolved and invites any creditors to present their claims. By law, a liquidation notice must give 45 days for claims.Stage 2 - Clearance and License Cancellation:
After the 45 days have elapsed with no objections (or after resolving any claims that were submitted), the liquidator prepares a liquidation report and a statement of account showing that all assets have been sold, liabilities paid, and any remaining assets distributed to shareholders. The liquidator and the partners then sign a declaration that there are no outstanding objections or claims. Obtain all required clearances: this includes MOHRE (close the labour establishment and show all employees are cancelled/transferred), GDRFA (cancel all visas under the company), utility providers (DEWA, etc., to ensure no dues), leasing (terminate Ejari), and any others relevant. If it’s a specialised company, there is also a need for clearance from, say, the Ministry of Finance or Central Bank if that was relevant, or the Securities and Commodities Authority (SCA) if it’s a public company (indeed, SCA approval is needed to cancel a PJSC). Once all are in hand, submit the final liquidator’s statement and clearances to DET. DET will then calculate any final fee. On payment, DET issues the final License Cancellation Certificate, effectively deregistering the company. The above process typically takes 2-3 months, mostly due to the 45-day notice period. During liquidation, the company should cease conducting new business (except what’s needed to wind down). The liquidator’s role is to pay off debts and distribute any leftover funds. If the company’s assets are not sufficient to pay liabilities, then the company is insolvent; in that case, liquidation might transition into a bankruptcy proceeding (next section) rather than a straightforward voluntary liquidation.
Special Cases – Freezing a License:
Dubai offers an option to freeze a license (keep it dormant) for up to 3 years instead of cancelling it. This involves paying a freezing fee and proving that you have no employees or outstanding commitments. This is usually done by companies that think they might restart business later and want to avoid the reincorporation cost. However, after 3 years, the license must either be reactivated or cancelled. Freezing is not a permanent solution, but can be a strategic pause.
Restructuring Procedure:
If a company anticipates financial difficulties but is not yet insolvent (or even if insolvent but wants to avoid liquidation), it can apply to the court for a preventive composition. This is essentially a court-supervised rescue plan where the debtor retains control of the business (debtor in possession) but works with its creditors to reach a settlement agreement. The new law continues to offer this, giving distressed businesses breathing room to reorganise. For example, the debtor may propose to repay a portion of the debts over an extended time, subject to creditor vote and court approval. This procedure aims to keep the company operating and avoid outright bankruptcy. The 2023 amendments likely streamline this process and clarify the timelines, as the old law gave 45 working days for the debtor to file a draft plan after the court’s decision. The goal is to encourage restructurings that can save businesses and jobs where possible.Bankruptcy:
If a rescue is not viable or the business is hopelessly insolvent, a formal bankruptcy can be declared by the court. In this process, a court-appointed trustee (liquidator) takes over, assets of the company are sells them, and the proceeds are distributed to creditors according to statutory priority. The law sets out the priority of claims (secured creditors, preferred debts like employee wages up to a limit, etc., and unsecured creditors). The new 2024 law creates specialised Bankruptcy Courts at the federal and local levels to handle these cases, aiming for more efficient outcomes. A company or its creditors can initiate bankruptcy if the company is unable to pay its debts for over 30 business days after they fall due, or if the company is balance-sheet insolvent. Notably, under UAE law, directors have to file for bankruptcy within 30 days of becoming insolvent.
Dubai offers structured and legally defined pathways for business exit or recovery. Voluntary liquidation allows companies to formally close operations and avoid future liabilities, with simpler procedures for sole establishments and more detailed steps for entities with share capital, like LLCs or JSCs. Alternatively, license freezing offers a temporary pause for up to three years. Restructuring procedures provide financially distressed but viable businesses with a court-supervised way to reorganise and avoid collapse. When recovery is not feasible, bankruptcy proceedings ensure orderly asset distribution under judicial oversight, with new dedicated courts improving efficiency. These frameworks ensure businesses can exit or recover responsibly while protecting stakeholders.
DISPUTE RESOLUTION MECHANISM
Mainland companies in Dubai have access to multiple avenues for resolving disputes, including the local court system and a range of Alternative Dispute Resolution (ADR) options such as arbitration and mediation. Below are the main dispute resolution forums and mechanisms available, referencing Dubai’s courts and arbitration centres:
Dubai Courts:
By default, a mainland company falls under the jurisdiction of the Dubai Courts for any civil or commercial disputes. The Dubai Courts are part of the UAE’s civil law judicial system (separate from the DIFC courts) and apply UAE federal and local laws. For most contract disputes, the Court of First Instance will issue a judgment typically within 6-12 months (complex cases can take longer), which can then be appealed. Dubai has specialised court circuits for certain matters – e.g. commercial circuit, labour circuit, personal status, etc. Importantly, Dubai and Ras Al Khaimah maintain independent court systems separate from the UAE federal judiciary. This means Dubai’s courts are managed by the Dubai government with its laws on court fees, etc., though the substantive commercial laws are federal. If your contract does not specify otherwise, any lawsuit would generally be filed in the Dubai Courts, assuming the dispute is within their remit.Arbitration:
Arbitration is a highly popular method for resolving commercial disputes in the UAE, especially for international contracts and disputes involving foreign parties. It offers a private forum where parties can choose neutral arbitrators, select the governing law, and have flexibility in procedure. Dubai is a regional arbitration hub, with institutions like the Dubai International Arbitration Centre (DIAC) and formerly the DIFC-LCIA (London Court of International Arbitration) providing services. DIAC is the primary arbitration centre in Dubai, and it introduced new DIAC Arbitration Rules in 2022 to modernise its procedures. If the contract has clauses naming DIFC-LCIA, those clauses remain enforceable; the law provides that they are deemed to refer to DIAC unless parties agree otherwise. Arbitral awards (decisions) are generally easier to enforce internationally than local court judgments. It’s common for shareholders' agreements, joint venture contracts, large supply or construction contracts involving mainland companies to include an arbitration clause naming DIAC or ADGM Arbitration Centre.DIFC Courts:
By Dubai law, parties (even non-DIFC companies) can opt into DIFC Courts jurisdiction by contract for their disputes. This means a mainland Dubai company and, say, a foreign counterparty could agree that DIFC Courts instead of Dubai Courts will hear any disputes. For mainstream business contracts, opting into DIFC Courts is an option if both parties agree, but if not specified, you’d default to Dubai Courts. Using the DIFC Courts can be seen as a middle ground between local courts and arbitration.Mediation:
Dubai promotes alternative dispute resolution. The Centre for Amicable Settlement of Disputes (CASD), attached to Dubai Courts, handles certain civil claims (especially small claims) by attempting mediation before litigation can proceed. If they settle, an amicable settlement agreement is signed and ratified by a judge to have the force of law. If not, the case goes to trial. If they settle, an amicable settlement agreement is signed and ratified by a judge to have the force of law. If not, the case goes to trial. Outside the courts, parties can also engage in private mediation. DIAC and other organisations offer mediation services. However, you can’t force the other side to mediate unless a contract requires it. For certain disputes, like labour disputes, MOHRE mandates an attempt at mediation: an ex-employee must file a complaint with MOHRE, which mediates between the worker and the company. Only if unresolved does it get referred to court.
Dubai offers multiple dispute resolution avenues for mainland companies. By default, disputes are handled by the Dubai Courts, part of the UAE’s civil law system. However, parties may opt for arbitration, a favoured method in international contracts, through centres like DIAC or the ADGM Arbitration Centre, offering privacy and enforceability. Alternatively, parties can contractually opt into the DIFC Courts for a common law approach. Mediation, both court-affiliated (e.g., CASD) and private, is encouraged to resolve disputes amicably before litigation. These options provide flexibility, efficiency, and enforceability in handling commercial disputes.
CONCLUSION
Setting up a company in Mainland Dubai is a rewarding endeavour given the region’s booming economy and pro-business climate. By carefully adhering to legal requirements and staying informed of local regulations, investors can fully leverage Dubai’s opportunities while mitigating risks. Starting and running a business in mainland Dubai is relatively straightforward, with streamlined platforms like the Invest in Dubai portal, which allows entrepreneurs to complete setup procedures in one place. While the Department of Economy and Tourism (DET) offers flexibility, it’s crucial to select the correct license type and activity to ensure long-term compliance. Once established, maintaining accurate corporate records, renewing the license annually, and formally cancelling it are essential to avoid penalties. Legal and regulatory compliance is an ongoing obligation that businesses must follow the UAE labour laws, immigration laws, VAT filing if applicable, and sector-specific rules like health requirements for food businesses.
