Dubai LLC Formation

Dubai LLC Formation | A Popular Legal Structure For Setting Up Local Business

Dubai LLC formation: Shareholding pattern, advantages, 7 categories of business organization and 3 business license categories

Dubai LLC formation: Foreign investors have fought shy of making a local company (LLC) because of the 51% ownership that must be given to local nationals. Not to worry.

You can still take advantage of using LLC without having to share your returns on the investments.

Please invest 2 minutes of your time to watch the Dubai LLC formation video below. It spells out how you can benefit. Or if you prefer to read, then feel free to skip the video and go straight to the text below:

Dubai LLC formation allows companies to come up with flexible, different profit-sharing arrangements with your local sponsor.

These can give you enormous relief, especially since the 51% local equity is a must for trading companies. However, you can also agree to pay a fixed amount to your sponsor regardless of the financial status of your company.

It’s not surprising, therefore, that the LLC is the most popular form of business organization in UAE.

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.

Most companies with expatriate partners have opted for this type of Dubai company formation, 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. Unless of course, you incorporate in a free zone.

While foreign equity in the company may not exceed 49%, profit, and loss distribution, is generally all yours. Responsibility for the management of a limited liability company can be vested in the foreign or national partners or a third party.

Dubai LLC Formation | Structure For Setting Up A Business

Dubai LLC Formation

Dubai LLC formation: Get a free quote by filling your details in the form on the right and get a legal structure for setting up a local company in Dubai

Therefore the normal shareholding pattern for a Dubai LLC formation will be:

  • Local sponsor – 51% and
  • Foreign Shareholder (s) – 49%

The following is an overview of the advantages of incorporating a Dubai LLC company, and whether this structure is the optimum solution to fulfill your international business needs.

Dubai LLC formation: Advantages

  • Offers unrivaled access to Dubai and the wider UAE economy. Through a Dubai LLC, international entrepreneurs obtain Trade Licenses from the Dubai government.
  • There are few restrictions on the activities of a Dubai LLC formation, and it is possible to obtain a license for all activities with the exception of banking, insurance, and investment activities.
  • Investors obtain a strong physical presence in Dubai. Although cost-effective office space is hard to find in Dubai, we offer license solutions to meet every activity and specifications.
  • Incorporating a Dubai LLC formation now faces no specific minimum capital requirements, after this formal requirement was abolished in the UAE. Companies may or may not be subject to minimum capital requirements, depending on the size, nature, and goals for the business set up in Dubai.
Dubai LLC Formation | Structure For Setting Up A Business

Dubai LLC Formation

Dubai LLC formation: Get a free quote by filling your details in the form on the right and get a legal structure for setting up a local company in Dubai

It is easy to open global corporate bank accounts following Dubai LLC formation set up

The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures.

  • General Partnership Company
  • Partnership-en-commendams
  • Joint venture Company
  • Public Shareholding Company
  • Private Shareholding Company
  • Limited liability Company (LLC)
  • Share Partnership Company

Out of these seven activities, LLCs are more commonly used by the foreign investors.

For a Dubai LLC formation, the minimum capital requirement is AED 300,000 (US$ 82,000), contributed in cash and can be withdrawn as soon as the incorporation is complete.

The time required to form a company will be approximate 1-2 weeks from the date of receipt of all the documents. The procedure and cost breakup will be given upon request

The basic requirement for all business activity in UAE is one of the following three categories of licenses:

  • Commercial licenses covering all kinds of trading activity
  • Professional licenses covering professions, services, craftsmen and artisans
  • Industrial licenses for establishing industrial or manufacturing activity

At Dubai LLC formation license for the majority of the activities are directly issued by the licensing authority – Department of Economic Development, Dubai.

Dubai LLC Formation | Structure For Setting Up A Business

Dubai LLC Formation

Dubai LLC formation: Get a free quote by filling your details in the form on the right and get a legal structure for setting up a local company in Dubai

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Dubai LLC Formation was last modified: September 29th, 2019 by Manu Raj

Manu Raj

Has a positive attitude towards the job, is friendly and a team player.

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