How to open the LLC in the UAE


The United Arab Emirates (UAE) is one of the richest countries in the world, known for its loyalty to foreign investors and an open policy of conducting international business. The reputation of the UAE as a world economic center attracts the attention of many foreign businessmen, and the variety of schemes for opening and promoting a company in the UAE allows choosing the most appropriate option in each specific case.

In the United Arab Emirates, for all types of companies, there are three types of licenses for doing business: commercial (for all types of trade), production (for production or industry) and service (for services), as well as two types of property that involve independent business or establishment of a company with the help of a local partner.

Establishment of a local company in the UAE
If the company is initially focused on doing business in the UAE or you intend to participate in government tenders and enter into contracts with local companies, the most profitable is the creation of a resident (local, offshore) company.

There are three main types of offshore companies in the UAE outside the free economic zones for legal entities: a limited liability company, a branch / representative office and a professional company. In each case, the company receives a license to operate in the emirate in which it is located.

Limited liability company (LLC) is the most common legal form of the company outside the free zones among non-residents of the UAE. This is the only option that assumes the maximum ownership of the company for expatriates in the territory of the UAE. An expatriate can act as the head of an enterprise and fully manage the affairs of the company. Local shareholders do not have the right to a share of the profits of the business, unless the directors have decided to pay dividends to shareholders.

Most of the LLC in Dubai is using local sponsors of the UAE as a “passive partner”. In this case, the local sponsor usually pays an annual “sponsorship fee” in exchange for refusing to manage the company in favor of a foreign investor.

Formation of the company takes approximately 1-2 weeks from the date of submission of all necessary documents. Staff can consist of at least two and a maximum of 50 people. The starting capital required for the opening of a limited liability company is 300,000 dirhams (about $ 82,000), which should be paid in cash.

It is extremely important for the LLC to have registered auditors to meet the requirements of the Commercial Companies Act.

In order to establish LLC, it is necessary to reserve the commercial name of the company with subsequent approval in the economic department of the emirate and notarize to sign the agreement of the partners. After compliance with all formalities, the company will be entered in the register with the subsequent publication of the constituent instrument in the Ministry of Economics and specialized periodical. The process ends with the registration of the company in the Chamber of Commerce and Industry of the emirate.

It should be noted that this organizational and legal form (LLC) does not imply the conduct of banking, investment and insurance activities, for which a mandatory establishment of the Public Joint Stock Company is required.