How to set up a Business in Dubai(Part 2)

How to set up a Business in Dubai

(Part 2)

Selection of the Legal Form

Suitable for the business project as per the type of business activity, which will be practiced, the amount of invested capital and other important considerations already referred to in this section in the light of which the firm’s deed is prepared, signed by the concerned parties, and attested by the Notary Public.

Table1. Legal Forms of Establishment

Legal form	Legal liability	Minimum capital	Number          of         persons required
Joint Liability	Joint	None required	Two or more UAE partners
Limited partnership	Limited to shares	None required	One or more joint partners all from UAE
Particular Partnership	Personal unlimited liability	None required	Two or more parties
Public Joint Stock Company	Limited to shares	AED 10 million	Minimum 10 founder members
Private Joint Stock Company	Limited to shares	AED 2 million	Minimum 3 founder members
Limited Liability Company	Limited to shares	None required	2 and not to exceed 50
Partnership Limited with Shares	Joint liability	AED 500.000	General and participating partners
Branch of a foreign company	Same legal identity of parent company	-	Must have UAE service agent

1.1.2 Ownership Requirements

All companies to be established in Dubai require 51 percent UAE nationals’ ownership. Exception to this requirement is applied to the following categories:

•    Companies set up in the different Free Zones

•    Foreign companies registering branches or representative office

•    Activities allowing 100% GCC ownership

•    Professional Companies are permitted to have 100% foreign ownership on condition to their compliance with appropriate local regulations and laws.

•    Instances where the law requires 100 percent local ownership.

Table (2) below shows the business activity according to the ownership structure

Table2. Business activity by ownership structure

Business Activity	UAE National	GCC National	Foreign National	Foreign Company
Sole proprietorship	9	9	9 Requires a UAE national service agent	9 Acts as a representative office and requires a UAE national service agent
Limited Liability Company	9	9 If GCC national has one or more foreign partners, then at least one UAE national partner is required. Foreign ownership should not exceed 49%.	9 At least one UAE national partner required. Foreign ownership should not exceed 49%.	9 At least one UAE national partner required. Foreign ownership should not exceed 49%.
Private Shareholding Company	9 Requires a minimum of 3 UAE national partners.	9 Requires a minimum of 3 UAE national partners. If GCC national has one or more foreign partners then the foreign ownership should not exceed 49%.	9 Requires a minimum of 3 UAE national partners. Foreign ownership should not exceed 49%.	9 Requires a minimum of 3 UAE national partners. Foreign ownership should not exceed 49%.
Public Shareholding Company	9 Requires a minimum of 3 UAE national partners.	9 Requires a minimum of 3 UAE national partners. If GCC national has one or more foreign partners then the foreign ownership should not exceed 49%.	9 Requires a minimum of 3 UAE national partners. Foreign ownership should not exceed 49%.	9 Requires a minimum of 3 UAE national partners. Foreign ownership should not exceed 49%.
Civil Business Company/ Professional Services	9	9	9 Requires a UAE national service agent.	9 Requires a UAE national service agent.

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