Main Land Company Setup
Limited Liability Company (L.L.C.)
A Limited Liability Company can be formed by a minimum of two and a maximum of fifty shareholders whose liability is limited to their shares in the company’s capital.
Under the Commercial Companies Law or CCL (Federal Law No. 8 of 1984 Concerning Commercial Companies as amended by Federal Law No 1 of 1984 and Federal Law No 13 of 1988, Federal Law No. 15 of 1998), foreign investors are permitted to hold up to 49 % equity ownership in UAE companies, whereas 51 % of the equity must be owned by UAE National(s). Such companies are recognized as offering a suitable structure for foreign individuals or organizations interested in developing a long term relationship with the local business community.
The minimum equity participation by UAE national is 51%. Capital required to form a limited liability company in Dubai is AED 300,000 (US$ 81,744) contributed in cash or in kind. The capital shall not be less than three hundred thousand dirham’s divided into equal shares the value of each not less than thousand dirham’s.
However, in other Emirates viz., Abu Dhabi, Sharjah, Fujairah etc., the capital requirement is AED 150,000 (US$ 40,872). Profit or loss distribution can be prescribed and responsibility of management of an LLC can be vested in the foreign or national partners or third party. The shares of such company are not open for subscription by the public and they do not issue negotiable shares.
The following steps are required in establishing a limited liability company in Dubai.
- Select a commercial name for the company and have it approved by the Licensing Department of the Economic Department.
- Get initial approval for the activity from Economic Department.
- Draw up the company’s Memorandum of Association and have it notarized by a Notary Public in the Dubai Courts.
- Seek approval from the Department of Economic Development and apply for entry in the Commercial Register.
- Once approval is granted, the company will be entered in the Commercial Register and have its Memorandum of Association published in the Ministry of Economy and Commerce’s Bulletin. The license will then be issued by the Department of Economic Development.
- The company should then be registered with the Dubai Chamber of Commerce and Industry.
Note: Trade Names that cannot be reserved: Name of country, Name of Continent, Famous regions and Towns, Coloure (blue, red etc.).Foreign words and short words will be charged extra fee of Dh2000 per year.Sponsorship
When setting up a local company as per the UAE Companies Law and UAE Civil Law, the expatriate shareholders are required to nominate a local service agent or a partner (which are often called sponsors) when establishing a company. In the case of a Limited Liability Company LLC (i.e Commercial Trading entity) the local partner must hold the majority equity share holding of 51% or more. We at DIBN differ as we can now offer that local partner service as a ‘corporate nominee partner or entity’ rather than an individual UAE national. Therefore the shareholding of the 51% falls under this new entity DIBN General Trading LLC,rather than a local individual.
DIBN provides reliable UAE National Partner or Local Sponsor for any type of company formation in Dubai mainland. We help you to find a sponsor who has the skills and knowledge about your particular business and who can represent you in the best possible manner.Timelines and Procedure in business days
- Day 1 – Submit Documents requirements and make payment for Sponsor / DIBN Service fees.
- Day 2 – DIBN will submit necessary documents to Dubai DED. Timeline and the Memorandum of Association / Local Service Agent Agreement / Civil Works Agreement (whichever is applicable) draft will be received by the client.*
- Day 3 – Trade Name Reservation Certificate is obtained.
- Day 4 – Application will be submitted for the Initial Approval.
- Day 8 – Initial Approval Certificate is obtained.
- Day 10 – Submission of Commercial Lease Agreement and EJARI Certificate to DIBN. **
- Day 11 – Client approves the final draft of the Memorandum of Association/ Local Service Agent Agreement and/or Civil Works Agreement.
- Day 12 – Once the Memorandum of Association/Local Service Agent Agreement/Civil Works Agreement is approved by the client, the expatriate shareholder/s is required to personally be present along with the Local Partner/Local Service Agent or it’s representative to sign the incorporation documents before the Notary Public in Dubai.
- Day 13 – Upon confirmation that the lease is appropriate, the file is submitted to DED for Issuance of Payment Voucher. This will be the license fee of the company.
- Day 14 – Issuance of Payment Voucher.
- Day 14 – Trade License is released once payment is made.
Note: The Dubai DED reserves the right to refuse or amend your company name even after approval.
Note: Certain business activities require additional approvals from the government agencies. This can result in the timelines being extended by up to 45 days (depending on which government authority) and an additional PRO fee of 1500 AED will apply, excluding government fees.
The above timelines are based on our past experience. If your chosen business activity requires additional inspections and approvals, timelines will vary according to the government authority involved.UAE Main Land Estimated Official Cost for Study Case / New Business Setup.
|Trade Name reservation||Govt. Agency||One time||610||100% Adv.|
|Initial Approval for your Business||Govt. Agency||One time||110||100% Adv.|
|UAE National – Sponsorship fee||You’re Business. Local Sponsor||Yearly||12,000||100% Later|
|MOA Typing – Legal Translation Services||Translation Services||One time||800||100% Adv.|
|Notarization of MOA for court (Depend on company share capital)||Govt. Agency||One time||2,000||100% Adv.|
|Licensing & Certificate of Incorporation Fees ( for specific Business activity )||Govt. Agency||Yearly||7,000||100% Adv.|
|File Opening -Immigration (Establishment Card)||Govt. Agency||One time||860||100% Adv.|
|Immigration Online Services||Govt. Agency||One time||4060||100% Adv.|
|File Opening – Ministry of Labour( Establishment Card)||Govt. Agency||One time||2,053||100% Adv.|
|DIBN Service Fees – Your Business registration Consultants Professional Fess.||DIBN||One time||5,000||100% Adv.|
- Referral to commercial Real Estate Broker Agency.
- Introduction to the Web Developing & Advertising Agency.
- Company bank account Set-up.
- Introduction to the Accounting Services Firm.
Dubai is one of the fastest growing cities in the world and the attractive low tax system of the emirate of Dubai makes it a perfect place to set up businesses in Dubai. The Professional License company can be setup with 100% foreign ownership in the Emirate of Dubai. However, a UAE national will be appointed as a service agent but he has no direct involvement in the business and is paid on an annual basis. The role of the Local Service Agent is to assist in obtaining license, visa, labour card, etc. There is no minimum capital requirement for a professional company in Dubai.
Professional licenses are awarded to skilled professionals; therefore it is necessary to obtain external approval from a corresponding government ministry before the license can be processed.
Branch & Representative Setup
Under Commercial Companies Act Number 8 of 1984 and Ministerial Decision Number 69 of 1989, a branch office of a foreign company does not have a separate entity. It merely represents the parent company and carries on business under its name. Usually, a branch office may promote and market the products of the parent company, enter into transactions and conclude agreements in the name of the parent company, and offer services to its customers.
With the exception of foreign companies licensed to operate from the free zone in the UAE, a foreign company may carry on its main activity or business in the UAE or establish an office or branch after a license is issued by the Ministry of Economy and Commerce. The license specifies the object or objects which the company is permitted to carry on. For the license to be granted the company must appoint a UAE national or a corporate body, the partners or shareholders of which are all UAE nationals, as agent of the company (a term which, under the Commercial Companies Act, does not include commercial agency). The duties of such agent to the company and third parties are limited to rendering the service necessary to the company without undertaking financial liability in respect of the business or activity of the company in the UAE or abroad; the agent is not entitled to claim any rights or authority in the business of the company. His rights in consideration of his services are determined by agreement.
The applications to set up a branch in the UAE must contain the trade name, legal form, address of headquarters of the foreign company and the country where it carries its activities, nature of activity intended to be exercised in the UAE, name of national agent (if the agent is a legal entity, then its legal form), capital, names of partners, their nationality, and addresses.
The Following documents are required:
- Certificates of registration of the foreign company.
- Resolution adopted by the authorized body in the parent company to setup a branch in the UAE.
- Power of Attorney for the company’s representative who submits the application.
- Original copy of the articles of association of the parent company, legalized by the competent authorities.
- Balance sheet of the parent company for the last two fiscal years and auditor’s report.
- Notarized copy of agreement between the parent company and the agent.
Establishment by GCC citizen
The states of the Gulf Cooperation Council (the UAE, Saudi Arabia, Sultanate of Oman, Qatar, Kuwait and Bahrain) signed the United Economic Agreement in Riyadh on 7th June 1981, with a view to coordinate and unify economic, financial, monetary, commercial and industrial legislations and UAE endorsed this agreement in 1982.
It is conditional as per the Federal Law No. 2 of 1989 concerning permitting the GCC citizen to conduct a business operation in UAE that the investor should be a natural person residing in UAE and practice the required activity by himself and have a license to practice the activity in his country of origin. Procedure overview of llc establishment.