How to Open LLC Company in Dubai?

UAE is undoubtedly one of the finest destinations for business formation. The country provides investors the flexibility to open their companies in various jurisdictions based on their business activities. Moreover, due to the robust transportation system, easy access to harbors and airports, and good revenue percentage, foreign investors consider UAE as the most remarkable and economical spot for conducting business. This is why a Limited Liability Company in Dubai is the most common form of entity preferred by most entrepreneurs. Furthermore, the favorable laws of the UAE government have facilitated the rapid growth of LLC companies in the UAE market.

Now, let’s explore other details about this structure.

Limited Liability Company(LLC)

An LLC is the most popular form of business in the United Arab Emirates. It requires 2-50 shareholders for its formation, whose liability is limited to their shares in the business capital. And therefore, shareholders are subject to full protection from liabilities as per the business laws in Dubai.

Additionally, LLCs in Dubai are required to have a UAE national as a partner or sponsor with 51% shareholding, wherein the rest 49% stays with the foreign investor, the owner of the LLC. Nonetheless, the authorities have brought several amendments to this rule, but they are limited to specific business activities.

Characteristics of a Limited Liability Company

• LLCs can have a minimum of 2 and a maximum of 50 partners/shareholders.
• There is a requirement for a local sponsor for an LLC formation in Dubai.
• A Limited Liability Company in Dubai must have a minimum of one and a maximum of five managers.
• The owners of the company have limited liability towards the shares, i.e. up to their input to the share capital.
• Improved day-to-day procedures and financial services.
• Permission to carry out trade in both local and foreign markets.
• Branches of LLCs can be incorporated in other Emirates as well.
• Dubai allows LLCs to carry out any industrial and commercial activity, except professional activities like legal consultancy, consultancy services, accounting, auditing of financial statements, insurance, etc.
• The name of the established LLC must resemble the activity chosen for the operation.
• The shareholders of the LLC must sign a separate agreement in the presence of two witnesses. This agreement is to safeguard the profit and loss as well as the shares in the company.
• Office spaces are available easily.
• There are no limitations on visa applications.
• It is quite achievable to open a corporate or international bank account in the UAE. This would further help in obtaining credits.
• LLC formation offers optimal chances to profit from the UAE economy.
• The owners of the LLC cannot offer the company shares to the public subscription in order to increase capital.
• As per the revised Commercial Companies Law, certain categories of businesses can have 100% ownership of their LLC business.
• Lastly, there are no limitations on real estate possessions.

Benefits of establishing an LLC in Dubai

Here is a breakdown of the benefits of implementing a Limited Liability Company in Dubai –

• Market accessibility – An LLC has lesser constraints on accessing the Dubai Market. This thus helps in expanding the customer base.
• Tax levies – Unlike free zone companies, LLCs have to pay a certain amount of taxes. However, these tax rates are minimal and ideal for companies established on the Mainland.
• Easy management procedure – An LLC is easy to operate as it has a straightforward organizational structure and involves minor paperwork.
• Range of business activities – There is a wide range of options for commercial activities available for LLCs. Hence, the business owners can select the desired activities and et them approved during the license application.
• Budget-friendly choices – Dubai offers affordable ways to establish a business, and Limited Liability Company in Dubai is one such example.
• No geographical restrictions – The UAE government hasn’t placed any restrictions on trade for LLCs. Hence, they are allowed to conduct operations in as well as out of the country.

Other added advantages:

• The most popular form of entity in Dubai
• Supreme access to the UAE economy
• No requirements for minimum capital
• Access to investor visa without any security deposits
• No interference by the sponsor in the daily activities of the company
• World-class infrastructure
• Flexibility in profit sharing
• Better and simpler rules for business
• Quicker to obtain a license
• Affordable business setup
• Freedom to choose the preferred location

Requirements for the formation of an LLC in Dubai

For individual:

• Application form of registration
• Certified passport copies – Shareholders and Managers
• UAE residence visa - Shareholders and Managers
• NOC from the current sponsor (if required)
• Three suggested company names
• Location plan
• Tenancy contract for the Office /warehouse /showroom (attested by the Dubai Municipality)
• Initial approval from the Department of Economic Development
• Bank reference letter of each partner

For corporate entities:

• Certificate of Incorporation
• MOA and AOA of the company
• Board Resolution
• Credentials of the appointed manager of the new company

Procedure to set up an LLC structure in Dubai

Setting up a Limited Liability Company in Dubai involves planning, making crucial business decisions, and wrapping up several legal processes. So, here are the key steps to start an LLC in Dubai –

• Determine the legal form of the entity
• Finalize a trading name
• Get the initial approvals
• Draft and submit MOA and LSA
• Find an ideal location
• Apply for a business license
• Submit the required documents
• Pay the requisite fees and collect the license

Types of licenses for LLC formation in Dubai

An LLC license is mandatory to successfully form a Limited Liability Company in Dubai. It’s an authorized document that certifies a company’s legal status in the country. So, if you want to trade in Dubai legally, you need to have a business license in order to confirm that your activities are in line with the UAE’s Commercial Firms Act.

The various types of licenses available for an LLC formation are as follows:-

• Commercial license

Companies involved in different kinds of trade activities related to goods and services such as car rental, logistics, real estate brokerage, etc. can acquire a commercial license.

• Professional license

Individuals or firms engaged and qualified in a specialized field can apply for a professional license. This particular license allows them to form a business entity and provide professional services in which they hold expertise. For example, repair services, printing & publishing, beauty salons, consultancy services, carpentry, computer graphic designing, etc.

• Industrial license

An industrial license allows entrepreneurs and investors to establish manufacturing or industrial activity in the UAE. These activities may include assembling and processing goods, importing raw materials, and exporting finished products. An industrial license is ideal for the business of textile, food, petroleum products, paper, metals and equipment, engines, etc.

• Agricultural license

Individuals or firms that are involved in cultivation activities such as pesticide trade, crop harvesting, greenhouse installation, etc. must acquire an agriculture license from the authorities.

• Tourism license

Since Dubai is a central attraction of tourism, several businesses offer tourism activities such as hotel rentals, cruise boat rentals, guest houses, and other travel services. These tourism companies need to have a tourism license to operate lawfully in Dubai.

Cost of LLC formation in Dubai

The LLC company cost in Dubai depends on varied factors, such as company registration cost, business location, number of visa applications, additional approvals, and so on. Besides, the cost is different for different businesses and industries.

For an estimated cost or accurate number, connect with the experts of Shuraa who can provide you with the exact LLC company cost in Dubai.

Shuraa Business Setup can help you with your LLC formation in Dubai!

The professionals at Shuraa are equipped with dedicated industry knowledge and global reach. Moreover, their sincere approach to offering informed advice and getting an LLC license enables the clients to start a business with ease and in no time.

So, book a free consultation to start a Limited Liability Company in Dubai with Shuraa. Call on +971 44081900 or email [email protected].