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Formation of a Limited Liability Company in Dubai

By Shivangi - 15 Dec 2021 Last Updated: 06 May 2022
Formation of a Limited Liability Company in Dubai

Dubai is one of the most rich and cosmopolitan cities in the Middle East, combining elements of the East and the West. It is one of the world's most appealing business destinations.

Dubai LLC Company Formation

A Limited Liability Company, or LLC, is one option to start a business in Dubai. In the United Arab Emirates, the most common business structure is an LLC. It can be formed by a minimum of two shareholders and a maximum of 50 shareholders, each of which is only liable for the amount invested in the company.

Many businesses choose an LLC with foreign partners because it is the only option that offers an expatriate the maximum legal ownership of a local business, i.e., 49%. Because a UAE national must be a partner in the LLC (with a 51 % shareholding), the potential investor can choose one UAE National (sponsor) to be a partner in the company.

LLC is adaptable, and mechanisms for profit sharing are also possible. Because a local partner owns 51% of the legal equity, it provides the overseas investor a significant advantage.

If you're considering in forming an LLC in Dubai, the Dhanguard will help you with everything from document registration to locating an investor-friendly zone.

Documents Required for Limited Liability Company in Dubai

To form an LLC in Dubai, you must follow the processes outlined below.

  • The Department of Economic Development in Dubai accepts company registrations.
  • Creating and notarizing the Memorandum and Articles of Association for the company.
  • Providing the Department of Economic Development with the relevant documentation and business license application forms.
  • The Dubai Commercial Register is where you go to register your business.
  • Registering one's employees with the Ministry of Laboure and the General Authority for Pension and Social Security after incorporation.

Fees applicable for Forming an LLC in Dubai

You need to pay for the Trade License that you will acquire in order to form LLC. Following is the list of Fees that you need to pay-

  • Fees for Commercial Licenses.
  • Fees for General Trading Activities
  • Fess for Non-Arabic Brand Name.
  • Fees applicable in the Open Market
  • Partner accommodation Fees
  • Name board fees
  • Service fees
  • Fees charged by the Chamber of Commerce
  • Ministry of the Economy Fees

Documents Required for LLC Formation

Below are the required documents for LLC Formation-

  • Compliance with the DED is achieved by completing the trade name application form as well as the warrant application form.
  • ‘If one or both members are companies, a copy of the Certificate of Incorporation, as well as a Memorandum of Association and a Board of Directors decision, are required to approve the LLC Formation.
  • It will also be necessary to have a Power of Attorney that authorizes someone to act on behalf of the LLC's shareholders.
  • Also included were copies of shareholders' passports, as well as suggestions for a general manager and directors.
  • The Department of Economic Development (DED) will thereafter grant an initial approval to this effect.

Depending on the LLC's anticipated operations, further approvals may be necessary.

The 2011 Licensing Law, also known as the "Law on the Organization of Economic Activities Practice in the Emirate of Dubai," streamlined the licensing procedure by allowing the DED to receive permits from the necessary ministries and departments.

The Power of Attorney holder must sign an LLC formation contract before a notary after receiving initial permission and approvals from the required ministries and/or agencies.

Read More: Benefits of Private Shareholding Company Formation in Dubai

Registration of LLC in UAE

If somebody chooses to form an LLC in UAE, the fees listed above are some of the most popular. The overall cost of forming an LLC in Dubai is estimated to be roughly AED 24,000.

LLC can be registered in the below mentioned areas-

LLC in Sharjah

Sharjah permits the registration of 7 different types of businesses, one of which is an LLC. Setting up an LLC in Sharjah is a smart move that comes with a slew of benefits. Because of its geographic location, it serves as a transportation and cargo hub for the Middle East and North Africa. As a result, it has a key trading position in the Gulf.

The most popular company creation in Sharjah is an LLC. The registration procedures are identical to those in Dubai. In Sharjah, a Limited Liability Company (LLC) must have at least 2 partners but no more than 50.

LLC in Ajman

Ajman is the smallest emirate in terms of area. The city's economy is based on fishing, agriculture, and trade, in addition to its oil deposits. Ajman offers a welcoming environment for investors.

Investors prefer LLC Company Formation in Ajman over other business structures. The setup process is the same, requiring two partners, one of whom will be a local partner with a 51 percent share. Ajman also has investor-friendly legislation.

LLC in Abu Dhabi

LLC For firms looking to start a business outside of the UAE Freezone, Abu Dhabi Company Formation is the most popular option. A UAE national or a firm completely controlled by UAE nationals must own at least 51 percent of a limited liability corporation's total shareholding. Other exclusions and rules apply to some businesses, which vary from one Emirates to the next.

Benefits of forming a business in Abu Dhabi are numerous:

The investor becomes a 100 percent tax-free shareholder in the company, there are no definite minimum capital requirements, and many other advantages.

Benefits of an LLC

The Advantages of a Dubai Limited Liability Company (LLC)

  • Dubai LLC provides unrivaled access to the UAE economy.
  • There is no requirement for a set amount of capital.
  • The business can be managed by the investors without the involvement of the local partner on a day-to-day basis.
  • Opening Business Bank Accounts is simple, and credit facilities are readily available.

This corporate structure is perfect for a company that wants to provide advisory services while partnering with an Emirati national. The cost of forming an LLC in Dubai is determined by the sort of activity you choose for your company.

Conclusion

The most obvious advantage to forming an LLC is protecting your personal assets by limiting the liability to the resources of the business itself. In most cases an LLC will protect your personal assets from claims against business formation of an LLC is not is not as difficult as it appears with the right guidance and support you would be able to setup your LLC in UAE connect to our experts at Dhanguard and learn more about the process.

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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