What are types of Business license entities in Dubai/UAE?
The principal forms of business structures are:
· -Limited Liabilities Company.
· - Professional License.
· -Industrial License
The main key differences between LLC License &
Professional License
The difference between the two forms of license is as
following:-
a) L.L.C.: Owners
have limited personal liability for the debts and actions of the LLC. Other
features of LLC are more like a partnership, providing management flexibility
and the benefit of pass-through taxation. A Limited Liability Company can be
formed by a minimum of two and a maximum of 50 persons whose liability is
limited to their shares in the Company's capital. The time required to form a
company will be approximately 1-2 weeks from the date of receipt of all the
documents. and procedures and the breakdown of the cost can be given upon
request.
b) Professional License: A Professional License
is a type of company formation structure in Dubai whereby the foreign investor
or foreign owner has 100% ownership of the company. It is compulsory to appoint
a local UAE agent not the sponsor for this type of company also, with the only
exception being that the local UAE sponsor does not own any equity in the
company. Professional firms are those which consist of professionals and
practitioners and practice non-commercial activities. In setting up a
professional firm, 100% foreign ownership, sole proprietorships or civil
companies are permitted. The firms, which are registered as professional
companies or firms may only practice specific activities and not extend that to
any commercial business.
These activities include the following services:-
· - Legal practice and consultancy
· -Auditing, Organizing and keeping accounting
records and books
· -Civil engineering and architecture
consultancies.
· -Managerial and economic consultancies and
studies
· -Technical services
· -Medical and curative services
· - Educational services
No, limited liabilities companies are restricted to trading
and industrial activities, and civil business companies are established for
practicing professional activities.
What are the
formalities for registration of the Business?
·
Initial approval from economic department
·
Trade name approval
·
Court Document (depend on company share capital)
·
Typing LLC contract (Arabic & English)
·
Ministry of economic fees
·
Sponsorship Fee
Do I need a local
sponsor?
Yes, to operate any kind of business we need local sponsor for
commercial license and Agent for Professional license in U.A.E.
How many partners can we have in the Company?
We can have minimum of 2 partners and maximum of 42 partners
in the co. (U.A.E. Sponsor 51% + Expat 49%
Do I need an office
for registration?
Yes, to operate any type of business and to get trade
license, tenancy contract of the office is required
Why Sponsor have 51%
Shares in the Company?
Federal Law
stipulates a total local equity of not less than 51% in any commercial company
and defines seven categories of business organizations which can be established
in the UAE. It categorises and defines the requirements in terms of
shareholders, directors, minimum capital levels and incorporation procedures.
It further lays down provisions governing conversion, merger and dissolution of
companies.
The seven categories of business organizations defined by
the law are:
·
General Partnership Company
·
Joint venture Company
·
Public Shareholding Company
·
Private Shareholding Company
·
Limited liability Company
·
Share Partnership Company
Of
the entities listed above, most foreign businesses choose the limited liability
company
as foreigners can exert significant control over them and it
requires a relatively small
amount of minimum capital to start up. Previously limited
liability companies in Dubai
were required to have a minimum share capital of AED 300,000
and those in other
Emirates required a minimum of AED 150,000. However,
following an amendment to
Article 227 of the Companies Law,8 shareholders now have the
right to determine the
share capital of their limited liability companies, provided
that such company will have
sufficient capital to achieve its objects.9 Such an entity
may, however, be inappropriate to
achieve certain business goals. For example, businesses
involving banking, insurance
or investment activity on behalf of third parties may only
be conducted by a public joint
stock company, and limited liability companies may not offer
their shares for public
subscription, which is a central feature of the public joint
stock company.
The key limitation on entities incorporated under the Companies
Law is that 51 percent
of the capital of a company must be owned by a UAE
national.10 However, it is possible
for the constitutional documents of a limited liability
company to contain the following
provisions designed to protect the interests of a foreign
minority shareholder:
• the foreign shareholder may appoint all of the directors;
• the foreign shareholder may appoint the general manager;
• the foreign shareholder may veto major decisions of the
company;
• the foreign shareholder may be entitled to all of the
assets of the company on winding
up; and
• the foreign shareholder may be entitled to more than 49
percent of the company’s profits.11
How much time does it
take to establish a Company?
It takes approximately 5-7 working days depending on the
availability of required documents from you.
You need to renew your trade license after every one year
based on Annexure-2. Normally the license is issued for one year and the same
has to be renewed every one year. But if you have a tenancy contact valid for
to 2 year you can also get your license valid for 2 years.
What is the Benefit of registering the L.L.C. COMPANY from A
Free Zone Company?
· You are eligible to trade any were comparing to
Free Zone you can only trade with the free zone its self, if you trade out of
free zone you are subjected to 5 % of the custom duty
· You can operate without the interference of the
local ?
All business activities carried out in Dubai are tax free at
corporate and personal level. Docs, required for formation of Co.
-Passport Copy of the investors.
-Min 3 names to be provided for registering Trade name.
-Tenancy contract of the Office which need to be attested from the Land department
What are the benefits
of business setting up in Dubai?
United Arab Emirates 0%
Corporate Tax Rate
Corporate Tax Rate
United Arab Emirates 0%
Sales Tax / VAT Rate
No taxes of any sort and no tax department
No filing of accounts
No tax exchange agreements with ANY country
No public record of directors or shareholders
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