Limited Liability Company (LLC) in Dubai

Steps to Setup a Limited Liability Company in Dubai

by Vishakha Agarwal 18, Jan 2024

A business setup, whether it's any type or structure, is highly beneficial in Dubai. This emirate is strategically located, has a business-friendly environment, and has a developed infrastructure. It is an attractive and thriving center for business owners, investors, and companies. Limited Liability Company in Dubai is one of the most popular and favourable business models. It provides the benefits of access to local markets with a blend of international business opportunities. This write-up is a complete guide on Dubai LLC company formation, including the benefits and steps of setting up. 

Benefits of Setting Up a Limited Liability Company in Dubai

The formation of an LLC in Dubai offers various benefits, making it the most favourable and affordable business type for entrepreneurs and investors worldwide. The following benefits will provide a clear idea about LLC company in Dubai –

a) The Liability Protection:

The liability of the members of the LLC company in Dubai is protected, and their personal assets are not at stake because they are shielded from the company’s liabilities. The members are not personally liable in situations of business debts or legal issues of the company. It offers a highly beneficial level of security to the members. 

b) Flexibility:

The LLC company in Dubai is the most favourable business entity because Dubai’s business environment encourages flexibility in the ownership structure. This allows foreign investors to own up to 100% of the LLC, which allows freedom in control and major decision-making and offers a business-friendly environment.

c) Access to the Wide Marketplace:

The economy in Dubai is known for its diversity. This economy caters to numerous types of growing sectors, such as finance, real estate, tourism, and technology. An LLC in Dubai permits businesses to engage with this wide marketplace and access customers on an international level. 

d) Ease of Doing Business:

The procedure of Dubai LLC company formation is constantly ranked high in global ease of doing business and functioning with the formalities. The policies, compliance, documentation, etc., are not time-consuming and can be done easily with the guidance of a consultancy firm. They provide a complete guide on how to set up a Limited Liability Company in Dubai, and a company is established because of their services and dedication.

e) Trading:

Trading is another essential benefit while setting up an LLC company in Dubai because this allows the ability to trade anywhere in the UAE, including free zones and the GCC region.

Therefore, these benefits are the primary reasons to set up an LLC in Dubai. They act as a motivation for the business owners and members of the company, helping them plan in such a way that these benefits are optimised and helping them make effective decisions. 

Read more about the benefits of the LLC Company Formation in Dubai.

 

Steps of Setting up a Limited Liability Company in Dubai

Select Business Activities and Company Structure:

This step involves the selection of legal structures and business activities while setting up an LLC in Dubai. Understanding the legal framework and deciding the jurisdiction among the mainland, freezone and offshore is an essential factor because each structure has its own benefits and legalities. The jurisdiction and business activity must be selected on the basis of the nature, scope and suitability of the company.

 1) Choose a Business Name:

The next step is to select a business name for the company because a name signifies the purpose and objectives of the company and defines its business goals. The entrepreneur must choose a name that is –

  • A unique name.
  • It must not be similar to the existing names.
  • The name must adhere to the standards issued by the government.
  • This name must not be uncertain and vague.

 2) Engage a Local Sponsor:

In the next step of the limited liability company formation in Dubai, an entrepreneur must engage with a local sponsor because it is highly helpful to the company's foreign investors. According to UAE laws, any individual who wants to be a local sponsor must hold at least 51% of the shares in the share capital of an LLC. They are recognised as local service agents. 

 3) Documentation:

The business owners of the company must prepare the necessary documents, including the Memorandum of Association (MoA) and Articles of Association (AoA) and submit them to the relevant authorities. These documents must include the business goals, objectives and other necessary business-related information. 

 4) Initial Approvals:

The above documents help in obtaining initial approval from The Department of Economic Development (DED) to proceed with the further steps of setting up a limited liability company in Dubai.  

 5) Obtain a Business License:

This step is about obtaining approvals and licenses for the establishment of the LLC in Dubai. These licenses are important to function in certain business activities, and they hold a lot of benefits for the company.

 6) Registration with the Chamber of Commerce:

The company must register the LLC with the Chamber of Commerce in Dubai. Registering the limited liability company in Dubai gives recognition of the entity in the market, helps increase networking and gains opportunities in areas of the business. 

 7) Open a Bank Account:

An entrepreneur of an LLC company in Dubai must choose a local bank and create a bank account because this helps manage business transactions, facilitate financial operations, and maintain books of accounts.

 8) Certification:

Lastly, after successfully completing these steps above and ensuring compliance with the laws, the governmental bodies and authorities will issue a certificate and approve the setting up of the limited liability company in Dubai.

Therefore, setting up a limited liability company in Dubai requires planning, research, strict follow-up of the legal procedures and professional guidance from a consultancy firm. With brief and detailed assistance, business people can follow the procedure and steps easily and form a successful limited liability company in Dubai.

However, it is suggested to contact a consultancy firm like Commitbiz because their expertise, uniqueness and services can smoothly lead entrepreneurs into the formation of the company, ensure compliance and offer innovative business ideas. You shouldn’t overthink and start your dream company today!

FAQs

How to form an LLC or mainland company in Dubai?

A trade name is required to establish an LLC or a mainland company. The business owner/ investor has to obtain some approval related to the products or services along with the trade name. Memorandums of the Association of the enterprise have to be submitted with a lease contract and another necessary document in DED.

What is the minimum capital to form an LLC in Dubai?

A minimum capital of AED 300000 (USD 81,810) is required in Dubai.

What are the benefits of setting up an LLC company in Dubai?

The primary benefits include –

  • An LLC can conduct any type of business activity, excluding insurance, banking, and investment.
  • There aren't any restrictions on the number of visas that can be obtained.
  • The investors of an LLC company can avail investor's visa under which they can get investor status in the Emirate along with their family.
  • An LLC is exempted from paying the standard 5% customs duty on imported goods. Also, restrictions are not imposed on real estate ownership.

How many members must an LLC have?

Under the new UAE Commercial Companies Law, an LLC may be formed with a single shareholder. Still, it is common practice for foreign investors to have a minimum of 2 shareholders to meet the UAE foreign ownership requirements.

Is a Registered Agent required?

There is no requirement for a Registered Agent. Still, due to foreign ownership restrictions, a foreign investor must seek advice and use a firm with extensive experience and expertise in setting up UAE mainland LLCs.

Does forming an LLC offer any tax benefits?

Yes. An LLC is permitted to trade anywhere within the UAE and GCC. In addition, an LLC can obtain a Tax Residence Certificate from the UAE Ministry of Economy.

What types of the licence can an LLC hold?

An LLC can operate under the following licence types:

  • Commercial – covering all kinds of trading activity
  • Professional – covering professions, services and crafts
  • Industrial – covering industrial or manufacturing activities

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