Limited Liability Company Formation in Dubai

Limited Liability Company (LLC) in UAE is the most common type of company set up in Dubai. For an LLC, the number of shareholders may range from 2 to 50, with the liability of a shareholder limited to one’s share in the capital. An LLC may conduct any type of business activity except banking, insurance, or money investment. An expatriate shareholder may own a maximum of 49% of the shares of an LLC in Dubai, with the company requiring an Emirati local sponsor, also referred to as a silent partner, with 51% of the stock. However, profit and losses can be shared at a ratio different from the share capital. Trading LLCs are allowed to carry out business in their local emirate and export and import freely.

In Dubai, the Department of Economic Development (DED) is the government body authorized to issue licenses for LLCs. It is responsible for classifying and regulating the types of economic activities that may be undertaken by such a company.

Advantages of LLC Formation in Dubai

  • No restrictions on real-estate ownership
  • A limited liability business is exempted from paying the standard 5% customs duty on imported goods.
  • An LLC business can legally trade anywhere in the UAE, including the Free Trade Zones.
  • No restrictions on the number of visas that can be obtained.
  • No restrictions on the location where the business can rent/buy office premises space.
  • The government has permanently waived any requirements for paid-up capital.

Things to Know before Setting up an LLC in Dubai

  1. An LLC business in Dubai will require a minimum of two and a maximum of fifty shareholders.
  2. A local sponsor or a UAE national must own the majority shares in the business.
  3. The liabilities of the company are limited to the number of shares of a shareholder in the business. The shareholders are not personally liable for the company’s liability.
  4. The minimum capital requirement to form an LLC in Dubai is AED 300,000. However, the capital requirement in other emirates is AED 150,000
  5. LLC business is not permitted to offer banking, insurance or investment service on behalf of others
  6. Any legal, commercial activity can be set up as an LLC in Mainland Dubai.
  7. Renting an office space or a shop is mandatory. However, DED Dubai has recently approved instant licenses were renting an office is not required.
  8. Trading LLCs are not permitted to conduct business within the Emirate as well as export/import goods freely.
  9. All ex-pat shareholders are eligible to get residence visa valid for three years subject to a minimum holding AED 72000 share capital in the company. Expat shareholders can also sponsor their family, parents, and made subject to the fulfillment of documents.
  10. Any number of employees can be recruited in LLC subject to fulfilling requirements from the Labour department.

Procedure to Set up an LLC in Dubai

Limited Liability Company formation is the most widely adopted legal entity for businesses/entrepreneurs seeking to enter the UAE market. The steps to register this business are -

  1. Select a business activity as directed by the DED Dubai
  2. Get an initial approval and acquisition of a trade name from the department.
  3. Get special approvals for some license activities if needed. This must be done before signing any agreement and to avoid any problems during the business incorporation process.
  4. Prepare a Memorandum of Association. All the partners must be present to sign it in front of the notary public. If any of the partners don’t approve, the partner can give a power of attorney to any person, and the person would be able to sign on his/her behalf.
  5. Acquire the tenancy contract
  6. Submitting the documents to the DED
  7. Pay fees and obtain a business license.

To set up an LLC in Dubai, the following details are required:

 
  • Trade name of the company
  • Registered office location
  • Names, nationalities, and addresses of the shareholders
  • The share capital of each shareholder
  • Names and nationalities of the company managers
  • Scheme of distribution of profits and losses, which may not necessarily be in the same proportion as the share capital

 

If you are looking to start a company in Dubai, do get in touch with us for guidance or advice.

Registering an LLC Dubai is approximately 1-2 weeks from the date of receipt of all the documents.

How can we help?

When it comes to company incorporation in Dubai, an LLC is a commonly preferred option, suiting most businesses. Commitbiz Management Consultants helps corporates and entrepreneurs set up their business in Dubai. Our business consultants can help you out with company registration, licensing, taxation, accounting, bookkeeping, and company secretarial services.

For setting up an LLC firm in Dubai, we assist in -

Getting approvals and clearances from different departments, Drafting Memorandum of Association and other important agreements Finding local partners Opening bank accounts Finding a proper office location Handling other documentation formalities