As per the Federal Law, there are seven types of business entities that can be formed in Dubai. Of these, the Limited-Liability Company (LLC) is most preferred by businesses planning to establish a company in Dubai.
A Limited-Liability Company can be formed with a minimum of two and maximum of fifty shareholders whose liability is limited to their shares in the business’s capital.
LLC is a flexible and differential profit sharing arrangement is also possible. It is a general requirement for such a company to have 51% participation by UAE national. Hence, the formal shareholding pattern for an LLC is as follows:
Local Partner (UAE sponsor) – 51%
Foreign Shareholder(s) – 49%
Moreover, either of the foreign partner or the UAE nationals may be granted the authority of managing the organization.
In addition to this, Companies Law stipulates that an LLC may engage in any lawful business except in activities related to banking, money investment (on behalf of other parties), and insurance.
Six Steps to be undertaken for LLC formation in Dubai
Carvy Consultancy closely works with its clients and handles their LLC incorporation. The following six steps are undertaken for formation of an LLC in Dubai:-
Deciding upon a company name under which the company will conduct its business activities and applying for approval by the Licensing Department of the Dubai Economic Department.
Framing a Memorandum of Association (MoA) of the company and getting it attested in the Dubai Courts by a Public Notary.
Getting an approval from the Dubai Economic Department.
Upon granting of approval by the Dubai Economic Department, formal entry of the company is made in the company register followed by publication of company’s MoA in the Bulletin of the Economy and Commerce Ministry.
A license is then issued by Dubai Economic Department.
Finally, the company is registered with the Chamber of Commerce and Industry of Dubai.
We at Carvy Consultants offer the most comprehensive UAE Company formation and consultation services in the country. Our personalized business set-up solutions include:-
Solutions on Public shareholding and LLC company formation
Securing licensing for off-shore companies
Acquiring professional, industrial, and trade licenses
Offering full spectrum support service
Benefits of LLC in Dubai:-
Since foreign equity in the company is limited to 49%, profits and losses can be shared at a ratio different from share capital
UAE LLC offers unparalleled access to the vast Emirates economy
Investor becomes the partner in the company
No minimum capital requirements
Investor gets the investor visa under which they enjoy an investor’s status in Emirates
Investor can manage everyday activities of the business without the interference of the local partner
Investor has the option to commence branches
Capital and assets will be in the name of the company and not in the name of the local national partner
Few activities are restricted
Easy to open a corporate/global bank accounts and avail credit facilities.