Choosing the right company formation in UAE has long-reaching repercussions. It can impact your personal liability, as well as the type of regulations and rules your firm must follow.
A Limited Liability Company (LLC) is the most common form of business in the United Arab Emirates. You can form an LLC with a minimum of 2 and a maximum of 50 shareholders. Your liability is limited to the shares in the business capital. The minimum capital requirement law was abolished in 2009, thus, making LLC Company Formation in Dubai less burdensome than some free zones where capital deposits are mandatory.
An LLC may carry on any type of activities except insurance, banking, or financial investments. An LLC gives you the freedom to trade anywhere in the UAE thereby giving you access to a large pool of sites for your business. LLCs do not have restrictions on real estate ownership either. With an LLC, you will pay the standard 5% customs duty on imported goods. Your firm also qualifies for a Tax Residence Certificate from the Ministry of Economy.
Foreign Ownership
The UAE Commercial Companies Law (CCL) requires that at least 51% of shares in an LLC are registered to a UAE national partner. Some expat investors feel uneasy about relinquishing control of their company to a local partner. We can advise on the best type of agreements you can have in place to protect your rights.
Documentation for an LLC
The documentation for your LLC will vary greatly depending on the nature of the business activity (we have made a list of the most common):
- Obtain a local partner or work with a business consultancy firm to acquire one;
- Passport copies for all shareholders and managers;
- Copy of the UAE residence visa (if applicable);
- No Objection Certificate (NOC) from current UAE residence visa sponsor (if applicable);
- Proof of address for each shareholder;
- CV for each shareholder (if applicable);
- Lease agreement or title deed for the business site.
In case you are interested to know the difference between FZE and FZ LLC
If the shareholder is a corporate entity, the required documentation will include:
- Business license;
- Memorandum and articles of the company;
- A board resolution agreeing to incorporate a new LLC;
- A power of attorney (POA) to the General Manager to incorporate the new LLC.
Once you receive final approval from the Dubai Department of Economic Development (DED), your company enters the Commercial Register. We recommend that your company should then register with the Dubai Chamber of Commerce and Industry.
Unlike other jurisdictions, you will need to ensure that you renew your business license every year. This will require you to have a valid lease, meet statutory requirements as per the business activity, and pay the “annual fee” to your local sponsor.
Speak to one of our experienced consultants today on how we can help you launch and maintain your LLC in Dubai.
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