Last updated on July 13, 2022
LLC company formation in Dubai
Opening a company is not an easy task in any part of the UAE. While the business site here in the UAE is certainly accepting various types of companies; but LLC company formation in Dubai is the most commonly use structure. To set up an LLC company can seem a little puzzling; mostly for those who are going to set up company for the first time in Dubai.
LLC Company is among the most common forms of business in Dubai. There are minimum of two and maximum of 50 shareholders for LLC company formation in Dubai. One advantage of having an LLC is that it is very flexible as compare to other structures. This structure is also popular because the owner of the company can retain complete control of the company; despite of having 51% of share allocated to local sponsor. The owner of the company is awarded with a share of the profit as well.
The liability of each owner in the company is limited to the amount of their shares in the capital.
Most expat in the UAE pick LLC company formation in Dubai; as this company structure will allows them to get the maximum legal percentage of ownership; and it grants the company a trading license coming directly from the gov’t of Dubai.
I have talked in the past about the various benefits of free zone versus mainland setup. What I want to look at today is one specific mainland option – the LLC.
So let’s get right into it.
How to set up an llc company in Dubai
So, now you are equipped with the whole thing you need to know about LLCs, the next question is – How to set up an llc company in Dubai mainland?
The first couples of step are very straight forward; the first step is to choose a business activity and reserve your company name. We will provide you a list of allowable business activities; you just need to simply choose the one that best suitable for your business. Our specialist of LLC company formation in Dubai can help you decide on the most appropriate.
Once you choose the activity then it is the time to choose a name for your company. There are a few things you need to keep in mind; offensive language is forbidden, company names cannot have religious words; or any references to any known organizations (anything from ‘FBI’ to ‘Mafia’). Both first name and last name are required if you are using your personal name as your company name. When your company name is in different languages, all names must be written as they are sounded out, rather than translated.
LLC company formation in Dubai
A local sponsor is mandatory for any foreign investor want to set up a Dubai llc. Local sponsors own 51% of the business and foreign investor will hold 49%. However, profits are not split down in the same way and full control always remains with the expat investors. Sponsors must be professionals, business owners or government employees and citizens of the UAE. As this process can be complex, it is wise to involve the services of a business setup consultant at this stage.
Now you are ready to apply for Dubai LLC company formation. To do this, you need to provide the DED with certain documents that will include your license application; MOA detailing local sponsor arrangements and percentage of all the partners; also a certificate of incorporation (if one or more shareholders are corporates), the board resolution approving the LLC, and passport copy of each shareholder and visas copy. You can also apply for your immigration card and any additional visas that may be required at the same time.
The process is usually take 2 to 3 weeks to complete; and once you get your license you will be ready to open your company bank account and set up your office anywhere in Dubai main land.
Advantages of LLC company formation in Dubai
Dubai LLC company formation is the most common type of business in UAE. It is an independent legal entity which allows multiple shareholders to form it in the UAE main land. It has low setup costs along with full access to the wider UAE market.
Following are the main advantages of Dubai LLC company formation.
Affordable Dubai LLC company formation
Many entrepreneurs who are looking for LLC company formation in Dubai; they are thinking that LLC Dubai is an expensive way of doing business. But in reality it is the easy and cheapest way of doing business in Dubai; because the cost of forming and running an LLC is less than a free zone company. The starting price for license applications is around AED 10,000 and; but depending on the exact nature of your business.
Quick and easy setup of Dubai LLC company formation
One of the most important reasons why Dubai LLC company formation; remain the most popular type of business setup out here is the Quick and easy setup process. In many cases, there are smaller number of loops to jump through; when setting up an LLC than forming in a free zone. In fact, new rules have made the Dubai LLC company formation process so easy that, it can be done in a week time. And you will be up and running with no worry.
Opportunity to apply for multiple visas of Dubai LLC company formation
The beauty of llc company setup in Dubai main land is that it allows you to apply for a numbers of visas. But there is a slight limitation, however: the number of visas is depending on the more office space; you must need to acquire more space if you want more visas. The general rule of thumb is that you need 100 sq. ft. of office space for one visa. There are some cases, where this may be negotiable with the DED. For example, a cleaning company may have 500+ employees working outside of the office – and therefore they do not require taking 100 sq. ft. of office space for each visa.
Carry out a wide range of business activities through Dubai LLC company formation
As free zones have limits on number of activity they allow; unlike free zone LLCs have no limits on the type of business activities they can carry out. Companies are allowed to trade in any of the activities listed by the DED; across industries as diverse as agriculture, construction, manufacturing, hospitality, and finance.
Option to trade with the larger UAE market through LLC company formation in Dubai
The number one reason why LLC company formation in Dubai are the most popular company type in the UAE; is that they allow you to trade with the entire local market directly; this is something which is not possible from any free trade zone. What is more, main land LLC is also allow to bid for gov’t projects. That is a big chance here in the UAE, where government project are in the billions of dollars each year.
No requirement for paid up share capital and setup anywhere
LLC company formation in Dubai is really affordable. As well as minimal application costs, there is also no requirement to put advancing paid upfront share capital. The first requirement of a LLC is to take on office space. The upside of this is that, unlike other methods of company formation, as an LLC you are able to take on office or warehouse space anywhere throughout the UAE.
LLC Company setup allow to sponsor dependents
When opening an LLC company, you are entitling for an investor visa; under which you will get an investor status in the UAE. This will not only allow you to stay as a resident in the UAE for up to three years; but you can also sponsor your family and domestic staff as well. Whether you require a visa for a spouse, child, maid or driver, the process is straightforward; that is entry permit, status change, a medical test, then Emirates ID registration as well as visa stamping. As this is such an essential process; it is a good idea to get advice from an expert to ensure that before starting an application; both you and those you are hoping to sponsor meet the entry criteria.
Open branch offices of LLC Company
Forming as an LLC is one of the most effective ways to gain as well as to grow a business in the UAE. It will allow you to trade throughout the local UAE market; you will also be able to open further branch setup in UAE to get a more nationwide presence.
LLC Company setup allow multiple shareholders
Every LLC must be form with at least two shareholders; and there is an official upper limit of 50 shareholders; which is quite a lot as compare to free zone company. Shareholder can be either individuals or corporate entities.