Top Challenges and How to Avoid Them 

Building a successful mainland company requires anticipating and addressing the common hurdles below. In each case, strategic planning or professional support from experienced advisors like DBTA can help you navigate obstacles efficiently and stay on track. 

1. Choosing the Right Structure and Jurisdiction 

A major early challenge is selecting the proper business structure and location. Dubai, Abu Dhabi, Sharjah, and other Emirates each have their own economy departments and rules. Within Dubai alone you must choose between Mainland, Free Zone, or Offshore frameworks. While free zones provide 100% foreign ownership and tax advantages, they restrict direct trade within the UAE. Mainland setups, though subject to local regulations and office requirements, allow full access across all Emirates. 

For example, setting up a company in Dubai mainland means registering with the Department of Economy and Tourism and leasing local office space – allowing you to sell directly to mainland clients. By contrast, a free zone setup cannot trade directly with the UAE market without a local distributor. Selecting an unsuitable structure can significantly limit your business reach or result in higher operational costs. 

Solution: Carefully match your long-term business goals with the jurisdiction. If you need local market access or want to bid on government contracts, the mainland makes sense. If you need full ownership and export focus, a free zone might work. Engaging experts such as DBTA helps you select the jurisdiction most compatible with your company’s long-term strategy and market focus.” DBTA’s consultants will review your business plan and target markets to recommend the optimal structure and location for your mainland company formation in Dubai (or Abu Dhabi, Sharjah, etc.). This prevents costly missteps and ensures you aren’t restricted by a structure that doesn’t support your growth. 

2. Navigating Licensing and Regulatory Requirements 

Once you decide on a mainland setup, the next hurdle is understanding the UAE’s licensing regime. Mainland licenses in Dubai are typically Commercial (trading goods), Industrial (manufacturing) or Professional (services). The scope of each license is tightly regulated, meaning your chosen category must accurately represent all your intended business activities to ensure compliance. For example, if you apply for a Commercial License but actually intend to provide consultancy, your license won’t match your operations. 

Furthermore, certain activities require additional approvals from specific ministries. For instance, healthcare or education companies need clearance from the Health Authority or Ministry of Education, while construction firms may need Dubai Municipality approval. Overlooking required external approval can result in significant delays, rejected applications, or even legal penalties. 

Solution: Work with experts like Dubai Business and Tax Advisors who know the local regulations. They will help you select the appropriate license type based on your business activities and navigate the full regulatory approval process. DBTA’s team will verify your planned activities and ensure you apply for the right commercial or professional license. This prevents costly re-application or fines down the line. Their team handles all necessary approvals from government entities, ensuring your setup process remains smooth and fully compliant. 

3. Local Sponsorship and Ownership Issues 

For many years, a local Emirati sponsor owning 51% was mandatory for most mainland companies. Although recent reforms allow 100% foreign ownership in many sectors, identifying a reliable local partner or service agent remains a challenge, especially when legal and operational trust is essential. If the sponsor relationship lacks clarity or trust, it may result in conflicts over decision-making, financial terms, or legal responsibilities, disrupting business continuity. The sponsor’s role is to legally register the company and act on your behalf in official matters, so they must be trustworthy. 

Solution: Conduct thorough due diligence on any sponsor or agent. DBTA can help by offering corporate nominee services (where a corporate entity holds the share) or vetting candidates. Even if you don’t need a sponsor for ownership, DBTA will ensure your local service agent agreement is clear and fair. With their help, you avoid the pitfall of an unreliable sponsor and maintain transparent control over your Mainland company. 

4. Office Space Requirements and Visa Quotas 

A unique challenge of UAE mainland company setup is the mandatory physical office requirement. The Department of Economy and Tourism in Dubai (and equivalent bodies in other emirates) stipulate that every mainland company must lease real office space. In most cases, at least 200 square feet is recommended per license, although the exact requirement can vary depending on your business activity and the Emirate’s rules. This space requirement directly affects your visa quota—larger office areas qualify your company for a higher number of employee visas. 

Leasing an office can be costly, especially in prime locations. A 200 sq. ft. office in Downtown Dubai may run around AED 100,000 per year. The same office space rules apply across other Emirates, mainland setups in Sharjah or Abu Dhabi also require a physical address, although rental rates vary. 

Solution: Consider flexible workspace solutions. DBTA can recommend cost-effective options like co-working spaces or virtual office packages that meet the minimum requirements while saving money. DBTA manages all lease documentation to ensure compliance with the Department of Economy and Tourism’s requirements, which directly impacts your visa eligibility. By ensuring your workspace setup meets all legal and documentation standards, DBTA prevents regulatory hold-ups that could jeopardize your company launch. 

5. Estimating Setup Costs and Budgeting 

Another common oversight is underestimating the cost of mainland company formation. Many entrepreneurs concentrate solely on the license fee, overlooking additional setup expenses that significantly affect the total budget. Typical cost components include DED registration fees, trade name reservation, initial approval, and the trade license fee itself. Key costs to consider include state charges, office leasing, and visa fees. The total cost of forming a Dubai mainland company, even for a basic trading license, can easily exceed AED 30,000 once all required fees are included. A general trading license in Dubai costs roughly AED 28,000–32,000 (including DED and MOA fees). 

Table 1: Approximate costs for Dubai mainland company setup (in AED). 

Solution: Build a detailed budget from day one. DBTA can provide a personalized cost estimate for your specific business activities and visa needs. They also help you uncover “hidden” fees (like PRO charges, insurance, or municipal fees) that are easy to overlook. With expert guidance, you avoid cash surprises that could derail your launch timeline. 

6. Corporate Banking and Financial Requirements 

Despite successful company registration, securing a corporate bank account can be challenging, banks impose rigorous due diligence before approval. Each bank has its own policy on documentation and may take weeks (or even months) to approve a new account. Common requirements include detailed business plans, shareholder information, and proof of activities. 

UAE banks now apply strict “Know Your Customer” rules. Many banks demand a full ownership chart all the way up to the Ultimate Beneficial Owner (UBO), with notarized documents for every intermediate entity. As a result, the volume and complexity of banking compliance documents can exceed those required during business registration. 

Solution: Advance preparation and professional support are key to navigating the UAE’s complex banking requirements. DBTA’s financial advisors will gather and vet all required documents before applying. They can also recommend banks that best match your profile (some banks are more startup-friendly). With DBTA’s guidance, the application process becomes more efficient, minimizing delays and ensuring all regulatory criteria are met. DBTA will stand by you when liaising with the bank, minimizing delays and ensuring compliance with UAE banking rules. 

7. Hiring Employees and Immigration Compliance 

For a growing mainland business, managing UAE labor and immigration procedures requires in-depth knowledge of visa rules, documentation, and employer obligations. Each employee needs a valid work visa (normally sponsored by the company), and visa quotas depend on your license type and office size. The visa application involves multiple steps: obtaining an entry permit, stamping the visa, medical tests, and Emirates ID issuance. Additionally, UAE law mandates that employers provide health insurance and may require housing or education allowances. Missing legal requirements such as insurance or documentation can stall visa processing and disrupt your hiring timeline. 

Solution: Use a reliable PRO (Public Relations Officer) service. DBTA offers PRO services to handle all visa paperwork, renewals, and labor card issues. Their team will guide you through the quota system and ensure you sponsor the correct visa category (e.g., employment, investor, or partner visa). By outsourcing this to experts, you avoid compliance mistakes.  

8. Market Research and Cultural Awareness 

Lastly, launching a mainland venture without sufficient market insight is risky. The UAE market is diverse and competitive, a strategy that appeals to one market segment might fail in another, highlighting the need for sector-specific market validation. Entering Dubai’s market without sufficient research can lead to missed opportunities. You must understand customer preferences, local competition, and demand for drivers in your industry. 

Equally important are cultural business norms. UAE’s business culture values personal relationships and patience. For example, initial meetings may focus on building rapport rather than jumping straight into business. Negotiations can take time, and decisions may not follow the Western one-meeting-one-deal model. Overlooking cultural norms may result in broken trust, prolonged negotiations, or failed collaborations. 

Solution: Invest in local market analysis. DBTA can help with industry research or refer you to market specialists. Drawing on deep regional knowledge, DBTA advises clients on how to localize pricing, marketing, and outreach efforts to connect effectively with target audiences in the UAE. By blending cultural sensitivity with market data, you’ll position your mainland company for acceptance and growth.