A Limited Liability Company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the Company's capital. The time required to form a company will be approximately 1-2 weeks from the date of receipt of all the documents. and procedures and the breakdown of the cost can be given upon request.
The Majority of Companies with expatriate partners have opted for this Limited Liability Company, due to the fact that this is the only option which will give maximum legal ownership i.e. 49% to the expatriates for a trading license.
Fifty-one per cent participation by UAE nationals is the general requirement for the Limited Liability Companies. Therefore the normal shareholding pattern for an LLC will be:
Local sponsor(Partner) - 51% and
Foreign Shareholder (s) - 49%
Minimum capital required is AED 300,000 (US$ 82,000), and should be contributed in cash. Whilst foreign equity in the Company is not permitted to exceed 49%, profit and loss distribution can be agreed mutually.
Several steps are required to establish a Limited Liability Company in Dubai, and these will include the following:-
Selecting a commercial name for the Company and having it approved by the Licensing Department of the Economic Department.
Drawing up the Company’s Memorandum of Association and having it notarized by a Notary Public in the Dubai Courts.
Seeking approval from the Economic Department and applying for entry in the Commercial Register.
Once the approval is granted, the Company will then be entered into the Commercial Register and have its Memorandum of Association published in the Ministry of economy and Commerce’s Bulletin.The license will then follow, which will be issued by the Economic Department.
The Company should then be registered with the Dubai Chamber of Commerce and Industry.
Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local agents. Local agents (sometimes referred to as sponsors) are not involved in the operational side of the company, but merely assist in obtaining visas, labour cards etc, and are paid a lump sum and/or a percentage of the profit or turnover.
The main difference between a representative office and a branch office is that a representative office theoretically is limited to gathering information and soliciting orders and projects to be performed by the company’s head office. In this regard, representative offices also are limited in the number of employees they may sponsor (typically three or four). A representative office serves as an administrative and marketing center for the foreign company. By contrast, a branch office is a full-fledged business, permitted to perform contracts or conduct other activities as Specified in its license
To establish a branch or representative office in Dubai, a foreign commercial company should proceed as follows:
Professional firms are those which consist of professionals and practitioners and practice non-commercial activities. In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. The firms, which are registered as professional companies or firms may only practice specific activities and not extend that to any commercial business. These activities include the following services: