LLC(LIMITED LIABILITY COMPANY) FORMATION

LLC (Limited Liability Company) is the most common form of business setup in Dubai and across UAE. Setting up an LLC company in UAE or Dubai is the first choice for foreign investors as UAE or Dubai is tax free zones. In a LLC (Limited Liability Company), number of minimum shareholder is two (02) and maximum shareholders can be up to fifty (50). LLC companies are restricted for some business activities such as banking, insurance or money investment.

While setting up a LLC (Limited Liability Company) in Dubai or UAE, investors must require a local sponsor (Emirati) or you can say a silent partner in company with share of 51% and foreign investor will have 49% share. After completion of all the procedures of company formation, local sponsor can make an agreement with foreign investor in the court that He / She will not do any involvement in company and he will also not involve in company’s operational or any other kind of matters.

LLC License Issuing Authorities:

Dubai DED (Department of Economic Development)
Abu Dhabi DED (Department of Economic Development)
Sharjah DED (Department of Economic Development)
Other Emirates (Municipality / Chamber of Commerce)

Main Business Activities of LLC Companies:

Setting up business in mainland in UAE allows following business activities:

Single Trading
General Trading
Advertising Agency
Technical Services
Contracting
Transportation

Required Capital for LLC Company Formation:

In Dubai, the capital requirement for setting up a LLC company was cancelled by the Government of Dubai on 10th August 2009. So, investors can setup their LLC Business in Dubai without any capital requirement or bank deposit. While in other Emirates rules are bit different, in few business activities you have to show or deposit the required amount (as per Government policy). That is why LLC Company Formation in Dubai is much easier for foreign investors.

Legal Form of LLC Company:

Legal Form is a kind of details of your business, that which type of business you are formatting. When you will setup Business with DED this legal form will in your business type, activities of your business, numbers of owner, their Nationalities and also in ownership type. Every business activity has its own legal form.

Types of Legal Forms of LLC Company:

Sole Proprietorship – it is a business owned by a single individual, not a company. Owner of such business will hold 100% business ownership and Profit.
One Person Company (LLC) – it is a business which can be owned by one natural and one corporate body. Such company can only consist on one person. It is as same as Sole Proprietorship but the difference is that its liability is limited to the single partner’s share.
Civil Company - It is a company which is based on partnerships of professionals in well known fields like Doctors, Lawyers and Engineers.
Limited Liability Company (LLC) – It is a most common form of setting up business in UAE and it can be on two (02) to (50) shareholders. Every person in this form of business will be liable of his / her shares in capital of the company.
Private Share Holding Company – it is also known as Private Joint – Stock Company and in such form of company partners can be 02 – 200 and every partner will must invest minimum Dhs. 5,000,000 in the business.
Public Share Holding Company – is a company whose capital is divided into transferable shares of equal value.
Simple Limited Partnership – this company can be formed between two (02) partners and partner will be General Partner and other will be Limited Partner.
Partnership Company – it is a single business with two or more people can share the ownership. Each partner can be administrator of the company unless an agreement.
Branch of a Foreign Company – can perform professional, commercial and Industrial activities and can be 100% owned by parent company. And it must have a Manager who will represent the company and must be appointed by Board of Directors of the Company.
Representative Office – can only promote and do marketing of parent company’s business but they can not do any kind of business activities.
Branch of UAE based Company – must be 100% owned by parent company and must undertake one or all activities in the Company License. Branch Manager is must require in it.
Branch of GCC based Company - must be 100% owned by parent company and must undertake one or all activities in the Company License.
Branch of Free Zone Company – can perform commercial, professional and industrial business as long as their business activities is authorized in mainland.
SME License – can be given to those businesses which are 100% owned by UAE Nationals and can take any legal form.
Intelaq (Home based business for UAE Nationals) – can be obtain by only UAE Nationals and they can do almost every kind of professional, commercial or industrial business.

Local Sponsor:

If you want to setup your business in Mainland then you need a local Emirati as a Local Sponsor. It is must for every business to have a Local Sponsor or Service Agent. And if you are setting up a Free Zone business in UAE then Free Zone will be your sponsor.

Share of Local Sponsor:

The share of a Local Sponsor in a mainland company will be 51% whereas foreign investor can hold 49% share. But normally investors make a court agreement with Local Sponsor that Local Sponsor will only charge a yearly fee not 51% share of profit.

Service Agent:

Service agent is always attached with the companies who have professional license, in which professionals hold 100% of ownership of their businesses, for example Doctors, Accountants, Engineers etc. etc.

LLC Company Formation Procedure:

Choose legal structure of the company which you want to setup
Choose name and activities which will involve in your business
Name approval and Business plan approval
Finalize the location of your business
Translations and typing of different forms and documents
Compile and submission of required documents to DED
Some business activities need different approvals from relevant Government Departments
Submit tenancy contract of your business location
Get your business license and all other relevant business documents
Processing of residency visas, labor card, USB and other legal documents

Companies Which Required Special Approvals:

Travel & Tourism Companies
Healthcare
Engineering Consultancy
Architectural Consultancy
Educational Services
Shipping & Logistics Services
Companies in Dubai World Communities (Trakhees)

Required Documents For LLC Company Formation:

Three Proposed Trade names of the company (on the basis of your preference)
Valid Passport copy of Shareholder(s) and Manager(s) of the company
Visa Status:
1. Entry stamp page of the proposed shareholder, if new
2. Residence Visa Page copy along with No Objection Certificate from Sponsor, if resident of UAE.
Power of Attorney in the name of our consultant (optional)
Company Application Form (KYC)
Recent passport size photographs of Shareholder(s) and Manager(s) with white background

Advantages of a LLC Company in UAE:

No specific capital requirement
0% Tax
100% foreign ownership
In case of any loss, partners can extent their share in capital only and their personal assets will not be attached
Unrivaled access to Dubai and across UAE economy
Owners / Partners can get investors visa which will be valid for three years and can be renew and also, they can sponsor their families
There are some restrictions on some business activities but can get license for almost all activities
Strong physical presence in all over UAE
Open global / local bank account very easily
LLC companies can easily get credit / loan facilities from banks

What Easy Step will do?

Consultancy on Company Incorporation Procedures
Arranging Local Sponsor, if required
Trade name reservation & approval
Legalization and Initial Approval from Department of Economic Development
Drafting & Legalizing Local Service Agent Agreement
Court Notarization of Local Service Agent Agreement
RERA Approval
Documentation, Legalization and Submission of final approval toDepartment of Economic Development
Follow up and Collection of Trade License from Department of Economic Development
Documentation, Legalization and Registration of company with Chamber of Commerce
Introduction to Banker for opening Global / Local Bank Account