Dubai Company Incorporation | 6 Ways To Form A Company
Dubai company incorporation: Guide to the regulations of the six different company registrations available in Dubai
Dubai company incorporation: The procedures involved in setting up companies in Dubai are quite similar to those applied when establishing a new business or nonprofit firm anywhere else in the United Arab Emirates (UAE).
To begin with, the prospective entrepreneurs have to choose from among the different Dubai company incorporations.
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Dubai company incorporation: 6 Ways of incorporation
1. General partnership
This type of business incorporation is available to UAE nationals only.
- It is established by two or more partners who are responsible for your company’s annual “profit-and-loss” performance, and more specifically, are liable (in common and separately) for the debts of your company
- The actual partners’ names are the only ones allowed and approved for inclusion in your company name
- A partner’s interest can be conveyed in either of two ways: by approval of the other partner/all partners or as expressly indicated in the partnership agreement documents
- The individuals comprising the management must all be UAE nationals. Said managers may either be partners or not
- Anyone of the following four conditions may cause a partnership to be dissolved: withdrawal of a partner; bankruptcy; the insanity of a partner; or death of a partner
- The partnership may, however, be continued in the event the rest of the partners unanimously decide on it in a meeting. Such decision, in this case, must be duly entered in the Commercial Register by the appropriate governmental authority
2. Limited partnership
This type of business incorporation is also known by another term – Partnership in Commendams
- It is made up of two types of partners: general and limited
- The general partners, who must be UAE nationals, are liable for the partnership’s debts
- The limited partner, on the other hand, is liable for its debts only up to the value of his contribution to the capital
- Furthermore, the limited partner can neither be part of the management nor have his name included in the partnership’s name
3. Public shareholding company
This is one of the Dubai company incorporations that allow for the most number of participants or shareholders in its structure
- In fact, it is required that a public shareholding company must have no less than 10 founders. The exception here is when a government entity is involved, in which case the required number of founders may be less than ten
- The minimum number of directors that must compose the Board of Directors of a public shareholding company is 3, while the maximum is 12. The Chairman and majority of the directors must be UAE nationals
- At least 55 percent of the shares must be made available to the public
- Of the AED 10 million required the minimum amount of capital, 25 percent is required to be paid for the subscription
- The liability of a shareholder is limited to a value approximate to the value of his capital contribution
- All share, which has equal rights, is entered in a share registry. Issuance of shares is guided by the nominal value – that is, the nominal value is pegged as the minimum price
- In case of considerable financial loss, such as when a company loses 50 percent or more of its capital, a general meeting of shareholders must be called by the board of directors. Said meeting is aimed at tackling the pressing issue of whether to continue with your company or dissolve it altogether
- Failure of the board of directors to call a meeting or failure of the shareholders to arrive at a decision at the meeting is enough grounds for an interested party to file a case before a competent court to seek your company’s dissolution
4. Private shareholding company
Similar to a public shareholding company, a private shareholding company is required to have no less than 3 shareholders
- Its minimum capital is set at AED 2 million
- Obviously, in this setup, shares are not to be offered to the general public. This is the reason why it is required that the incorporating papers of a private shareholding company expressly rule out in advance, any offering of shares to the public
5. Limited liability company
Of the different Dubai company incorporations, the limited liability company is considered the most common
- At least 2 but not more than 50 persons can set it up
- A shareholder’s liability is hedged against the value of his shares. In Dubai, the required minimum capital for this setup is AED 300 thousand (elsewhere in UAE like Abu Dhabi, Ras Khaimah or the Jebel Ali free zone, it is AED 150 thousand)
- Foreign ownership of shares is allowed, which must not exceed more than 49 percent of your company’s capital
- Also, a limited liability company is allowed to undertake any legal activity except banking, insurance, and such other activities involving money investment on behalf of other parties or entities or investors
6. Joint venture
This is the last of six Dubai company incorporation options
- It is also sometimes referred to as “consortium”; two or more legal entities or natural persons form a joint venture
- Its terms and objectives are governed by a contract, which may either be oral or in writing (may not be notarized, in case of the latter)
- Also, registration of the agreement in the commercial register is not required
The carrying out of a joint venture may be done only under the private name of one of the partners, who must be a UAE national
It must be highlighted that in any of these 6 Dubai company incorporations, the participation of UAE nationals must never go below 51 percent.
An important factor for those planning to put up a company in UAE is to carefully consider the advantages and disadvantages of each of the Dubai company incorporations and choose the one they think will best suit their business needs.
Professional agents/consultants are available to assist you and provide details and information regarding the regional economy, fees payable and the laws that govern that jurisdiction.
These international representatives make your decision-making process simple by helping you with your corporate and trade plans, advising you on which zone to choose and processing all your paperwork.
They are conveniently located online and interact with you, the customer, in a timely fashion via email.
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