How to Set Up a Limited Liability Company in Dubai and the UAE
The UAE has emerged as one of the world’s finest destinations for business set up. The region gives investors the flexibility to open their company in the mainland, free zone, or offshore depending on their business activities. Moreover, Dubai has robust transportation services, and companies get easy access to harbors, airports, etc. All these reasons make LLC company formation in Dubai ideal. The LLC company structure has picked up pace in the past few years because of favorable laws established by the UAE’s government. The investors and business partners can enjoy the benefits of a corporate structure combined with a hassle-free business partnership model.
What is a limited liability company?
Limited Liability Company (LLC) is the most common form of business in UAE. A Limited Liability Company can be formed by a minimum of 2 and a maximum of 50 shareholders whose liability is limited to their shares in the business capital. Therefore, the business laws in Dubai offer shareholders full personal protection from liabilities.
You have an increased business domain under an LLC set up, i.e., a larger pool of business activities for company establishment. Whenever you form a limited liability company in Dubai, it’s mandatory to partner with a local sponsor (UAE national) who’ll have 51% company ownership. The expatriate, in this case, would have control over the remaining 49%. Reliable local sponsors act as silent partners for your business and allow you to have 100% operational ownership.
Steps to start an LLC company in Dubai and the UAE
You need to follow the steps given below to open an Limited Liability Company in the UAE. Ensure that you adhere to all legal frameworks and follow the business guidelines established by UAE’s government before, during, and after your company’s formation. Here’s how you can open an LLC:
- Understand all business activities involved in your venture to the core and select them carefully from the list maintained by DED and other authorities.
- Reserve a trading name for your business. Ensure that it doesn’t breach any naming convention law maintained by the government.
- Finalize the business location and obtain the initial approval certificate from DED. You won’t get this certificate if your trade name is rejected.
- Complete all the required documentation, including MoA and LSA agreements. Partner with a reliable local sponsor who’ll help you with legal compliance.
- Obtain the trading license for your business. You’ll receive the same for successful verification of all the documents you submitted to the authority.
- Apply to the labor registry to obtain the labor cards and manage your visa alongside the visas of your partners. Once done, you’re ready to run a legal LLC company in Dubai.
Cost of LLC company formation in Dubai
The cost of setting up a limited liability company in Dubai for most economic activities is almost the same. The only factors that may change the costing is the number of visas applied for, the chosen medical insurance, additional approvals from relevant governmental authorities, and foreign trade name.
Below are some of the mandatory services that are chargeable:
The cost for an LLC license (with the mandatory services) in Dubai would AED 25,500 approximately for company formation. While among the additional charges, foreign trade name / non-Arabic name will be an extra AED 2,000. The LLC license renewal cost in Dubai is around AED 8,000 to AED 15,000.
Why invest in an LLC company setup in Dubai?
Budding entrepreneurs and new-age investors want to be sure of their investment decisions. One mistake can cause unnecessary loss of resources and time. Therefore, we have compiled a list that runs you through the advantages of LLC formation and why you should also invest in it:
- Affordable company formation
“Affordable” isn’t the word that comes to mind when people think of business setup in Dubai. However, it’s when you understand the region’s business dynamics and jurisdiction that you come to terms with the cost-effective company establishment model in Dubai. An LLC company formation in Dubai is affordable since there aren’t any overhead application costs, and you can also avoid double taxation.
Furthermore, the governing authorities never impose undisclosed charges, and you don’t have to pay anything extra when you form an LLC here. An estimate for Dubai LLC formation cost is around AED28,000, but a lot also depends on your business’s nature. Some business activities require exclusive approvals and certificates from the authorities, which increases the formation cost.
- Limited liability protection
An LLC is always considered a separate legal entity. This business structure separates the finances of the business partners from that of the business. Therefore, no shareholder is personally held responsible for the losses incurred by the LLC. It comes down to the total capital invested in the business, and no personal assets of any shareholder can be seized under the LLC agreement.
This protection for business partners has empowered the growth of LLC business setup in the UAE. Many entrepreneurs prefer to have limited liability protection when they establish their business, and that’s what they get with an LLC formation. Hence, the shareholders are only liable to the extent of the amount they have invested in the company.
- Broad range of permissible business activities
Unlike other company structures, LLC permits you to choose from a large pool of legal business activities in the UAE. The Department of Economic Development (DED) maintains a list of more than 2,000 business activities that are legal under an LLC formation. The activities might vary in nature and jurisdiction, depending on the company’s business location.
You can establish your limited liability company in the field of agriculture, finance, technology, and many more. The registration process for an LLC formation is more optimized than ever in the UAE. When you submit the right documents to the concerned departments, you can obtain a trade license for your business activity in a very short time.
- Freedom to choose the preferred business location
An LLC company formation in Dubai empowers you to select any legal location for your business. If your business activity demands access to Dubai’s local market, go for mainland company formation. You can compare various office spaces and choose the best ones for your business.
An experienced business advisor in Dubai can help you find the ideal location for business setup in the UAE. Selecting the right location is critical to avoid overhead expenses pertaining to your business activity and the area’s jurisdiction applicable to your venture.
- Opportunity to apply for multiple visas
When you form an LLC in Dubai, you become eligible for an investor visa. You get the investor status in the UAE, and this entitles you to stay in the UAE as a resident for a term of three years. You can apply for multiple visas for your family members, employees, etc. The standard rule requires you to have a 100 sq. ft. of business space for each visa application.
If you’re applying for multiple visas, it’s recommended to discuss with DED, and the department won’t disappoint you. Therefore, you have the opportunity to stabilize your work life and personal life in the UAE by obtaining visas for employees and family members.
Here are the key steps to an LLC company formation in Dubai:
- Determine the type of legal entity.
- Choose a trading name.
- Apply for a business license.
- Choose an office space.
- Get pre-approvals, register your business and get your license.
Connect with Shuraa Business Setup
An LLC company formation needs you to have an in-depth understanding of several business dynamics in the UAE. Our business consultants educate you about various LLC company requirements and how to manage them. We can become your silent local partners and give you 100% operational ownership. Shuraa has already helped 35,000+ companies establish in the Dubai marketplace. Are you ready to form your limited liability company in the UAE? Connect with Shuraa, and we’ll do it together.
To book a free consultation, call on +971 44081900. You can also send a WhatsApp message on +971 50 777 5554. To connect over email, send us your query at [email protected]