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Benefits of Civil Company Formation in Dubai

By Shivangi - 08 Dec 2021 Last Updated: 05 May 2022
Benefits of Civil Company Formation in Dubai

Table of Contents 

  1. 1. Options for International Entrepreneurs for Civil Company Formation in Dubai
  2. 2. Process for Civil Company Formation in Dubai?
  3. 3. Steps to Keep in Mind for Civil Company Formation in Dubai
  4. 4. What you should Consider Before Starting a Civil Company Formation in Dubai?
  5. 5. Conclusion

Anyone looking to establish a civil company formation in Dubai has a number of options. You could choose to form in one of Dubai's many free zones to benefit from 0% corporate and personal taxation, 100% profit repatriation, and 100% foreign ownership. You can also establish an LLC in Dubai's Mainland. While the latter option requires you to hand over a 51 percent stake in your company to a local sponsor, it also provides complete access to the local UAE market, which Freezone businesses do not.

Options for International Entrepreneurs for Civil Company Formation in Dubai

Civil company formation in Dubai. It includes 100 percent ownership as well as access to the local market, but it also includes unlimited liability. Qualified professionals in specialised fields, such as doctors, accountants, lawyers, and consultants, as well as engineers, can establish a company on the Dubai mainland.

While civil company formation allows you to retain 100% ownership of your company, there is still a requirement that you have a Local Service Agent (LSA) in the UAE in order to form this type of company in a Dubai main land. However, keep in mind that LSAs have no ownership interest in your company. The LSA's role is simply to communicate with the government on your behalf, assisting with licence approvals, work permits, and Visa applications, for which they are paid either an agreed-upon fee or a percentage of company profits.

Process for Civil Company Formation in Dubai?

A civil company in Dubai has a professional licence; Civil Company Formation in Dubai is the only company formation option that is completely tailored to professionals. Simply establishing a civil company in the UAE is a step into a market for which you are qualified and hoped to enter. This is before considering the other advantages, such as 100 percent foreign ownership and full access to the local market.

However, it is a highly risky approach than an LLC; because in this type of setup, you will bear the majority of the responsibility for your company's share. But, at the same time, you must take this seriously. Because if you go for a non-standard closing, you as the firm's owner will lose much more than just the company itself.

Read More: Foreign Branch Incorporation in the UAE

Steps to Keep in Mind for Civil Company Formation in Dubai

So, if you are a professional looking to make a name for yourself in the local market, you should consider whether civil company formation in Dubai is the best option for you. Everything you need to know to make the best decision is as followed:

Easy and Quick Setup

The good news for those who are ready to take the plunge and form a company is that establishing a civil company formation in Dubai is both quick and simple. It is simply a matter of submitting an application to the DED for your licence. The government has recently taken steps to simplify the entire process; you simply need to meet the eligibility criteria.

Collaboration with a Local Service Agent (LSA)

As previously stated, civil companies are not required to work with a local or corporate sponsor. However, you will need to hire an LSA to communicate with government departments on your behalf. The LSA has no say in your business decisions and has no stake in your company. A company formation specialist can assist you in locating a reputable LSA, ensuring that the entire process goes smoothly.

100% Liability Vs LLC

Civil companies have unlimited liability, so it is critical to understand what that entails before making a decision. With an LLC Company Formation in Dubai, you are not personally liable for the company's debts. As a result, there is an extra layer of security. There is 100 percent liability (or 'unlimited liability') for a civil company, which means creditors could potentially go after your assets as well as possessions if the worst happens. While the two types of companies may have some structural similarities, the difference becomes clear in the event of Liquidation.

It's Simple to Sponsor Dependents

As a shareholder in a civil company, you can sponsor your employees for Visas, and you can also sponsor your dependents for residence visas. You can sponsor a visa for staff such as drivers or your spouse, as well as other dependents, if you meet the application criteria. The procedure is relatively simple; you must apply for an entry permit, change your status, and take a medical fitness test, followed by Emirates ID registration and visa stamping. Getting advice from an expert is a good idea.

Affordable Installation

Due to the apparent costs of doing business in this part of the world, new expats frequently postpone their move. In reality, however, it is very possible to start a business in the UAE for very little money. To form your civil company, you must first apply for a professional licence in Dubai, which will cost you around AED 17,000 (approximately). Furthermore, because there is no requirement to provide paid open share capital when establishing a new civil company, total startup costs are extremely low.

Set Up with Many Shareholders

Another advantage of this type of company structure is that it allows you to form your company with more than one shareholder. A minimum of two shareholders are required for the formation of a civil company in Dubai, with a maximum of 50. These can be either individuals or corporate entities.

Apply for many Visas

A civil company formation in Dubai is popular with larger businesses because it allows the owners to apply for more visas; in fact, there is no upper limit for a main land firm. But there's a catch: the more visas you apply for, the more office space you'll need. The general rule of thumb is that each visa requires 100 square feet of office space. This visa rule, however, may be negotiable with the DED. For example, if you have a large remote work force of 500+ employees, you are unlikely to need 50,000 square feet of office space.

Easy to Set Up a Corporate Bank Account

It is quick and simple to open a Business Bank Account once you have obtained your professional licence and formed your civil company. A company formation expert can advise you on the best bank to meet your needs and even arrange meetings in-branch for you if you so desire. You are, of course, free to approach any local or international bank on your own.

What you should Consider Before Starting a Civil Company Formation in Dubai?

Things to Consider before starting a Business in Dubai are as follows:

  • It is critical to select the proper structure.
  • Expats can choose from a variety of ownership options.
  • Select an Office Space Option (This includes serviced offices, on-site offices, and free zone offices.)
  • Obtain a Tax Domicile Certificate (Tax Residency Certificate (TRS)) to take advantage of the double taxation treaty signed between the UAE and the foreign jurisdictions.
  • Operating a business on the Dubai Mainland necessitates the appointment of a local sponsor. He will own 51 percent of the company.
  • Business Strategy Consulting Is Beneficial

Conclusion

For professionals looking to start a business in the UAE, civil company registration is the only option. Simply operating a civil firm in the UAE indicates to the market that you are highly skilled and qualified in your chosen profession. That's before you consider the plethora of other benefits, such as 100 percent foreign ownership and complete access to the local market.

Dhanguard is dedicated to assisting clients with the formation of a company in the Dubai, providing guidance and assistance in all aspects of civil company formation in Dubai.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides the company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free offshore company formation services and company formation services in Mainland and Freezone in UAE.

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