What are the Types of Business Entities currently operating in Dubai?

Dubai is the hub of business in the UAE. In fact, the fame of the UAE as a business-friendly country is mainly due to the emirate of Dubai. For the past several decades, Dubai has been attracting foreign entrepreneurs for starting a company in Dubai is due to the numerous incentives and facilities it offers to all types of businesses.

The reason a variety of business setups is flourishing in Dubai is due to the opening of different types of companies in Dubai. UAE has been buzzing in the news recently with its latest milestone now ranking it among the most desired locations to work, invest and live. Since every business needs a unique structure to incorporate, UAE facilitates different legal forms to start a business in Dubai and helps companies establish, grow and prosper.

Establishing a business in the United Arab Emirates

When we look at how far Dubai has come in such a short span of time, it is easy to see why starting a business in Dubai is such an attractive prospect to many entrepreneurs.

In fact, Dubai’s Department of Economic Development (DED) reports a 13% year-on-year increase in new startups looking to do business in Dubai. Dubai’s growing economy presents many opportunities. The services, finance, trade, and real estate & properties are paying back profits. Furthermore, the city is one of the most cosmopolitan cities in the Middle East.

How many types of Business Entities are there in Dubai?

The following are the names and characteristics of different types of companies that can be established in Dubai:

1. Sole Proprietorship

A sole proprietorship is owned by a single individual who has control over all its operations and holds 100% shares to any profits. This business entity is the simplest form of corporate structure in the UAE and does not impose any special requirements other than having a residence permit in the case of a foreign citizen. Similarly, any debts or financial duties will be liable to its owner.

Although such legal forms are open to most business activities, some general rules must be obeyed before a sole proprietorship can proceed.

Features of Sole Proprietorship Business:

  1. An individual of any nationality can own a professional sole proprietorship.
  2. Only UAE and GCC nationals can own a sole proprietorship that is commercial or industrial which must be 100% owned.
  3. In case the owner is not a UAE national, an LSA or Local Service Agent is appointed for opening this type of company.
  4. The LSA is supposed to overlook license requirements and government-related matters for the business.
  5. A sole proprietorship has no minimum requirement for business capital.

2. Partnership Company

Under this type of business entity, the ownership is shared by two or more partners whose share profits and losses according to the decided ratio. There are two main types of partnerships. which are:

  • General Partnership
  • Limited Partnership

Features of a Partnership Business in UAE

  1. UAE nationals must be general partners in a simple limited partnership. Partners of other nationalities must be limited partners.
  2. There is no restriction on the share of ownership of general or limited partners.
  3. Limited partners should not intervene in the management or administrative issues of general partners. If they do so, they can become liable for all of the business obligations.

3. Limited Liability Company (LLC) in Dubai

Limited liability company in the UAE is the most preferred form of a business entity by individuals. The liability of the partners in an LLC is limited to the extent of their investment in the company. LLCs can conduct any commercial or industrial business activity in the jurisdiction.

What are the Features of an LLC company in the UAE?

  1. Professional or consultancy activities cannot be conducted by this form of the company except banking, insurance, or investment
  2. An LLC can conduct any industrial or commercial activity
  3. 51% ownership should be with the UAE national and the remaining 49% can be owner-owned
  4. LLC formation requires a UAE accredited auditor
  5. Minimum 2 and maximum 50 shareholders can invest in the company

4. Private Shareholding Company

This type of business is also called a Private Joint Shareholding Company in the UAE. It can be formed through a minimum partnership with at least 3 investors. Such legal structures are compatible with all sorts of commercial and industrial activities besides the professional business. A GCC national can own up to 100% of the shares.

Features of a Private Shareholding Company in the UAE

  1. An approval from the Ministry of Economy must be obtained to establish a private shareholding company.
  2. The company must appoint one manager
  3. A company can have more than one branch. Each may undertake one or all of the activities included in the main business license
  4. At least 51% of the shares must be owned by a UAE national

5. Public Shareholding Company

A public Share Holding Company is defined as a legal entity. A Public Shareholding Company is also called a Public Joint Stock Company (PJSC) in the UAE. During the company incorporation process, the trade name must not be from any partnering investors, except if the name is a patent of a shareholder or if the name is entitled to store belonging to the shareholder. 

Features of a Public Shareholding Company in the UAE

  1. Partners can practice any industrial, commercial or professional business activities in accordance with DED business regulations
  2. The company must have a maximum of 5 appointed managers as per DED business regulations
  3. A Public Share Holding Company must have at least 5 founding members who are UAE Nationals, owning between 30% and 70% of the capital shares
  4. A company can have more than one branch. Each may undertake one or all of the activities included in the main business license.

6. Civil Company

Recognized professions such as a doctor, accountant, engineer, and lawyer can open a civil company in the UAE. The company can have partners owning 100% shares and the activities allowed for the civil company can be only from a professional business.

More specifically, such activities are narrated as physical or intellectual, practiced by one or more natural persons under a defined capital. To open a civil company some rules must be followed for successful incorporation.

Features of a Civil Company in the UAE

  1. If a foreign company invests as a partner in a civil company, it must be from the same type of business activity
  2. Like in the case of a sole proprietorship, an LSA is required for the company incorporation process if the owner is a foreign national.
  3. Partners from any nationality can start this business
  4. If the company is involved in engineering activities, one partner should be a UAE national who owns no less than 51% of the business.

7. Branch of a Foreign Company

In simple terms, a branch office is a dedicated outlet of a company. Though physically apart, the branch office does not constitute a separate legal entity. As a functional means to expand and grow business reach across countries, branch offices serve as an operational vessel to establish company presence in new regions and enhance prospects of sales and revenue.

  1. A branch office is incorporated by filing an application with the help of a local service agent through the Ministry of Economic and Commerce.
  2. Approval must be secured from the respective authority after a permit letter is issued regarding business activity from the Ministry of Economic and Commerce.
  3. The local Economic Department will register the branch office after which the business license will be handed to the company.

Conclusion

It all comes down to what type of business you want to start in Dubai. If you need help in choosing the right business structure, Contact us today- we at Danburite Corporate would be happy to assist you.

Recent Posts

Getting Back to Basics: Step-by-Step Guide on Starting a Company in Dubai Mainland

Getting Back to Basics: Step-by-Step Guide on Starting a Company in Dubai Mainland

September 28, 2023
Discover key info about the tailored Golden Visa for artistic individuals like you!

Discover key info about the tailored Golden Visa for artistic individuals like you!

August 21, 2023
Welcome to Danburite Corporate's checklist!

Welcome to Danburite Corporate's checklist!

August 14, 2023
Understanding Dubai Green Visa

Understanding Dubai Green Visa

August 07, 2023
PRO Services in the UAE.

PRO Services in the UAE.

June 19, 2023
Unveiling the Process: A Comprehensive Guide to Company De-Registration for Businesses in Mainland UAE

Unveiling the Process: A Comprehensive Guide to Company De-Registration for Businesses in Mainland UAE

June 05, 2023
Involuntary Loss of Employment Scheme

Involuntary Loss of Employment Scheme

May 29, 2023
Know More. Learn more: Introducing Corporate Tax

Know More. Learn more: Introducing Corporate Tax

May 20, 2023
Getting a 10-year UAE Golden Visa for a property investment in Dubai? Here's how!

Getting a 10-year UAE Golden Visa for a property investment in Dubai? Here's how!

May 01, 2023
Getting a 10-year Golden Visa with an AED 30,000/- salary!

Getting a 10-year Golden Visa with an AED 30,000/- salary!

April 20, 2023
Empowering Women Entrepreneurs: The Rise of Female-Led Businesses in the UAE

Empowering Women Entrepreneurs: The Rise of Female-Led Businesses in the UAE

April 13, 2023
How to Ecommerce - Your Ultimate guide for creating your very own Ecommerce Empire

How to Ecommerce - Your Ultimate guide for creating your very own Ecommerce Empire

August 22, 2024
What to Know About Bank Account Opening in UAE?

What to Know About Bank Account Opening in UAE?

April 12, 2023
UNLOCKING A GOLDEN FUTURE WITH THE UAE GOLDEN VISA

UNLOCKING A GOLDEN FUTURE WITH THE UAE GOLDEN VISA

January 23, 2023
Golden Visa UAE -  How to get Golden Visa In UAE

Golden Visa UAE - How to get Golden Visa In UAE

January 30, 2023
Top 10 Fastest Growing Business Sectors and Leading Industries in the UAE 2022

Top 10 Fastest Growing Business Sectors and Leading Industries in the UAE 2022

February 01, 2022
Business Opportunities in Dubai 2022 and Cheapest Business Setup in UAE

Business Opportunities in Dubai 2022 and Cheapest Business Setup in UAE

January 28, 2022
Wanted to Start a Business in Dubai: Get to Know of Setting a Business, Recent Trends, and Investment Opportunities in UAE

Wanted to Start a Business in Dubai: Get to Know of Setting a Business, Recent Trends, and Investment Opportunities in UAE

January 25, 2022
What Is the Cost of Setting Up a Company in Dubai? Business Setup Toolkit

What Is the Cost of Setting Up a Company in Dubai? Business Setup Toolkit

January 21, 2022
What Are the Key 8 Legal Steps to Setup Business in Dubai?

What Are the Key 8 Legal Steps to Setup Business in Dubai?

January 18, 2022

You can also read

All You Should Know About Business Setup in Dubai and Company Setup in UAE

January 25, 2022

Read More

Import and Export Business Opportunities in Dubai 2023

October 20, 2023

Read More

What is dropshipping?, and How to start a dropshipping company in Dubai?

November 10, 2022

Read More

Top 5 Reasons Why Dubai Is an International Convention and Exhibition Centre?

December 31, 2021

Read More

Growing Top 10 New Business Ideas in Dubai 2022

January 04, 2022

Read More

How Can a Business Setup Consultant in Dubai Help Me in Setting Up a Business?

November 15, 2022

Read More

Top 10 Best Home Based Business Ideas in Dubai for 2022

December 28, 2021

Read More

How to Register a Business in Dubai as a Foreigner?

January 10, 2022

Read More

50 Profitable Businesses to open in Dubai for 2022

December 09, 2021

Read More

Top 6 Ways to Get Residence and Free zone Visa in the UAE 

November 15, 2022

Read More

Can company owners get 100% ownership in Dubai mainland?

November 09, 2021

Read More

List of 20 Best Profitable Small Business Opportunities in Dubai

April 05, 2023

Read More

What are the Top 6 Easy ways for Company Formation in Dubai?

November 02, 2021

Read More

How to Get Funding for Your Business in UAE?

October 29, 2021

Read More

All you Want to know about Free zone Visa Cost in Dubai

August 08, 2023

Read More

What are the documents I need to obtain a professional license in the UAE?

August 29, 2024

Read More

How to set up a Limited Partnership Company in Dubai?

October 20, 2021

Read More

How to Setup a Joint Venture Company in Dubai?

January 06, 2022

Read More

What is the procedure to set up a Limited Liability Company in Dubai?

October 12, 2021

Read More

What is the Procedure for starting a Public Shareholding Company in Dubai?

October 08, 2021

Read More

Our Services For Company Setup in Dubai

Danburite Corp specializes in all aspects of company formation, management and liquidation.

Learn More

Book a free consultation with our experts

Whatsapp chat
Please verify yourself to continue