Civil company formation in Dubai

Last updated on December 31, 2021

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Civil company formation in Dubai

Anyone who is searching to do a civil company formation in Dubai is facing with several choices. You could pick to form in one of the Dubai many free zone; to benefit from zero per cent corporate as well as personal tax; 100% repatriation of profits along with 100% foreign owner ship. Alternatively, you can setup an LLC in Dubai main land. While this latter option does need handing over a 51% stake of your business to a local sponsor; it also offers complete access to the local UAE market; something free zone business do not.

There is also a third option for overseas entrepreneurs and that is civil company formation in Dubai. It includes 100% ownership, as well as access to the local market, but does involve unrestricted liability. A Dubai mainland company setup is open to qualified professionals in specialist sectors – such as doctors, accountants, lawyers and consultants as well as engineers.

Civil company formation in Dubai is available to professionals in some sectors; such as doctors, accountants, lawyers, IT, consultants as well as engineers etc.

While civil company set up do allow you to hold 100% ownership of your company; But there is still a rule for you to have a Local Service Agent (LSA) in the UAE; in order to form this type of a company in a Dubai main land. But note that, LSAs do not hold any stake in your business. The role of the LSA is simply to communicate with gov’t on your behalf; assisting with license approvals, work permit as well as visa applications; for which they are paid either an agreed fee or a percentage of company profits.

Civil company formation in Dubai

So, if you are a professional and looking to make a name in the local market; then it is important to understand whether Civil company formation in Dubai is the best option for you. Below is everything you must to know in order to make the right choice.

Quick and easy setup

The good news for those who are ready to take a step and form a company; is that the setup of a civil company formation in Dubai is both quick as well as easy. It is just a case of applying to the DED for your license. New the Gov’t has taken a step to make the entire process is very much simple; you just need to meet the eligibility criteria.

Working with a local service agent (LSA)

As I have already touched upon, civil companies are not mandatory to work with a local or corporate sponsor. However, you will have to involve the services of an LSA to liaise with government departments on your behalf. The LSA has no say over your business decisions, nor do they hold any stake in your company. A company formation specialist can support you to find a trust worthy LSA; to make sure the whole process goes off without a hitch.

100% liability vs LLC

Civil companies have 100% liability – so it is important to understand what that means when making the choice. With an LLC company formation in Dubai you are not accountable personally for any debts of the company. So there is great layer of protection. For a civil company, there is 100% liability (or ‘unlimited liability’) which, as it sounds; means creditors could potentially go after your assets as well as possessions should the worst happen. While the two different types of company may share some similarities in terms of structure; in the event of liquidation, the difference becomes clear.

It’s easy to sponsor dependents

As you are able to sponsor your employees for their visas, as a shareholder in a civil company; you can also sponsor your dependents for their residence visas. Providing you meet the application criteria; you can sponsor the visa for staff such as drivers or your spouse as well as other dependents. The process is comparatively easy; you need to apply for entry permit, change status and medical fitness test; then Emirates ID registration, and visa stamping. It is a good idea to get advice from an expert.

Affordable setup

New expat are often delaying due to the apparent costs of doing business in this part of the world. In reality, however, it is very much possible to establish a business in the Emirates for a minimal outlay. You need to apply for your professional license in Dubai to form your civil company; it will cost you around AED 17,000. What’s more, as there is no requirement to provide paid open share capital; when setting up a new civil company and total startup costs are very low.

Set up with multiple shareholders

Another good reason for this type of company set up; is that it allow you to form your firm with more the one shareholders. A Civil company formation in Dubai need a minimum of two shareholders; as well as a maximum of 50. These can be either individuals or it can be a corporate entity.

Apply for multiple visas

A Civil company formation in Dubai is mainly popular with larger firm; as it allow the owners to apply for more visas; in fact there is no upper limit for a main land firm. However, there is a catch; the more visas you apply for, the more office space you must have. The general rule of thumb is 100 sq. ft. of office space per visa. However, this visa rule may be negotiable with the DED. For example, if you have a huge remote work force of 500+ employees; then you are unlikely to be requires to take 50,000 sq. ft. of office space.

Easy to arrange your corporate bank account

Once you get your professional license and form your civil company; then it is speedy as well as easy to open your bank account. A company formation expert can advise on the best bank to suit your requirements; as well as even arrange meetings in-branch for you and should you wish. Though you are obviously also welcome to approach any local or international bank on your own.

How to setup a civil company in Dubai

A civil company holds a professional license in Dubai; civil company formation in Dubai is the only company set up option which is fully made for professionals. Simply to get a civil company in the UAE is a jump to a market; for which you are qualified and was hoping to enter. And this is even before looking to the other benefits such as 100% foreign ownership; ass well as a full access to the local market.

However, it is an approach that come with risk as compare to an LLC; As in this type of a setup you will hold the large responsibility of your company share. But at the same time, you need to take this very seriously. Because if you go for a not plain closing; then you as the owner of the firm will lose much more than just the company itself. This is a serious issue which need you to be careful; and in this case let me tell you that the advise of the consultant is key.

If you fit the bill; and you are aware of all the hurdle; which come in the way of being an owner of the firm; then there is nothing which stop you from full fill your dream. But we recommend you to get advice from one of the top set up consultant; so that to start your firm in a smooth way.