It is a dream for a lot of businessmen to set up companies in Dubai. Dubai mainland is a hub of business and it is the most established and cosmopolitan city in the Middle East. It is one of the most favorable business destinations to set up business in Dubai. It is mandatory for the mainland UAE legal entities to get licensed by the Department of Economic Development (DED) and governed by the UAE Commercial Companies Law (CCL).
All About Limited Liability Company
One of the most favorable ways to set up business in Dubai is through a Limited Liability Company or LLC. The Limited Liability Company is the most day-to-day kind of business in Dubai. The business is formed by a minimum of 2 and a maximum of 50 shareholders, the liability of whose shares are also limited in the business capital. the companies with foreign partners choose an LLC as it is the only option that gives maximum legal ownership. It gives 49% ownership to an entrepreneur for a local business.
The prospective investor has the option to choose as the partner of the company to the UAE national as it is a mandatory thing to have a UAE national as a partner in the LLC. The UAE national should have 51% shareholding in the company. It is possible to have different profit-sharing arrangements as LLC is a flexible kind of business and this gives the foreign investor a great opportunity as 51% of legal equity is with local partners.
What are the Features of LLC Company Formation in Dubai?
The features of a Limited Liability Company to set up business in Dubai are:
- It is the most prevalent type of business in the UAE.
- It requires a minimum of 2 members and a maximum of 50 shareholders to set up a company formation in Dubai.
- All the shares of the shareholders are limited to the business capital.
- LLC is a versatile kind of business.
- The provisions for mutual profit sharing are feasible.
Above all, It attracts the international investor a huge opportunity as a local partner has 51% legal equity.
How to start an LLC Company in Dubai?
Below are the steps to start an LLC Company in Dubai:
1. Select a trading name for the business
First, to start a business a catchy company name is required, So the very first thing which a person needs to do is to select the name of the company. The name should sound attractive and professional so that the customers are easily attracted to the company.
2. Choosing a location to set up business in Dubai
After the selection of trade names is done, it's time to select a posh location to start up the business. It is important to select the right location for the company. Choosing the right location is important as it helps the firm to get the right customers and clients and boost the business.
3. Getting a Local Sponsor
An agreement has to be made with the local sponsor who will own 51% of shares in the LLC business and the remaining 45% can be owned by the owner himself.
4. Documents Required to obtain the License
After getting the approval there are certain documents required which are mentioned below. These documents are mandatory to obtain a license for starting a company formation in Dubai. the documents have to be submitted to the DED.
5. Pay Fees and Get the License
A minimal fee is required to get the license. This fee has to be paid before getting the license.
How to Set up a Limited Liability Company in Dubai?
Here is the step-by-step process to set up a Limited Liability Company in Dubai.
- The Company registration in Dubai with the Department of Economic Development has to be done.
- After that, drafting and notarizing the company’s Memorandum and Articles of Association is required.
- Then, all the required documents and business license application forms with the Department of Economic Development have to be submitted.
- Registering with the Dubai Commercial Register is needed.
- Other than incorporation, registering one’s employees with the Ministry of Labor and General Authority for Pension and Social Security also has to be done.
What are the documents required to set up an LLC Company in Dubai?
The documents required for the LLC Company set up in Dubai are:
- A duly filled registration application form is required.
- The Passport copies of all shareholders and managers of the company.
- A Passport copy of the local sponsor is required.
- NOC from sponsor (if manager or partner has residence visa in UAE) is required.
- A Memorandum of Association is needed.
- The Registration of trade name and initial approval from DED is needed
- A Bank reference letter of each shareholder is required.
- Location plan and tenancy contract attested by Dubai Municipality’s Planning Department and Civil Defense Department is needed.
It would be easier for the entrepreneur to set up business in Dubai if all the documents are attested and notarized from the applicant’s home country and UAE consulate. As the notarization procedure takes a lot of time and also it should be done soon after taking a decision about business set up in Dubai.
What are the Advantages of setting up an LLC Company in Dubai?
The advantages of setting up an LLC in Dubai are:
- There are no territorial restrictions on business activities or the location for company formation in Dubai, unlike the Free Zones.
- A mainland company has the freedom to operate their business anywhere in the UAE or wider Gulf Cooperation Council (GCC).
- There is a far wider range of real estate options from which a person can choose his business set up in Dubai.
- The shareholder's liability is limited to the shares in the company's capital.
- A Limited Liability Company can start any kind of business activity except for banking, investment, and insurance.
What are the disadvantages of setting up an LLC Company in Dubai?
The disadvantages of setting up an LLC Company in Dubai are:
- The Employee visas are required to be renewed every 2 years.
- It takes a Longer time to establish than a Free Zone company. The time span required is typically 8 to 10 weeks.
- An External approval is required from UAE government ministries, which is chargeable and time taking.
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Danburite Corporate is an organization having skilled and experienced consultants who have been assisting businessmen in the company formation in Dubai. So what are you waiting for? Contact Us today and start your business in Dubai!
