/ Blogs / Company Formation / Process Of Private Shareholding Company Formation In Dubai

What is the Process of Private Shareholding Company Formation in Dubai?

By Shivangi - 21 Dec 2021 Last Updated: 06 May 2022
What is the Process of Private Shareholding Company Formation in Dubai?

Dubai is a country of opportunities. Many economists and business professionals have identified this city as the ideal area to establish a firm because of its world-class infrastructure, dependable connectivity, qualified people, cosmopolitan workplace, and incentives to spend more.

The Dubai Economic Department (DED) has granted licence to all private business entities and their members to conduct commercial activity on the Dubai Mainland. Multinational grocery stores, consumer products companies, vehicle manufacturers, and other similar businesses are perfect places for a foreign business owner to work.

Ownership for Private Shareholding Company Formation in Mainland

A foreign owner can only own up to 49 percent of a firm established on the mainland, according to UAE business formation rules, and a UAE citizen must own 51 percent of total shares, save in the following circumstances:

  • 100% ownership of activities in the service industry ( IT services, Technical Services, Marketing Management )
  • Companies from the Gulf Cooperation Council (GCC) have partnered with UAE nationals in the past.
  • Where the law mandates local ownership to be 100 percent.
  • Companies based in Freezones

Starting a business in Dubai Mainland is a good idea. The following elements of the market setup in Dubai Mainland tempt a potential investor to spend more:

  • Minimum capital requirements are subject to fewer constraints.
  • There will be no annual auditing.
  • There are no limitations on how legal documents are processed.
  • There are no limitations on recruitment.
  • There is no taxation at all, whether it be corporate or personal.
  • There are no restrictions on obtaining work visas, and the recruitment procedure is simple.
  • Import duties are low.
  • Obtaining a low-cost Office Space with a flexible rent or lease in any location is simple.

Process of Forming a Private Shareholding Company in Dubai

The procedure is simple and quick, just like any other UAE incorporation. Here's how to register your business on the Mainland of Dubai:-

  • Select the type of business you wish to start in Dubai.
  • Recruit a Local Service Agent to hold 51 percent of the company's stock.
  • Examine the suitability, accessibility, and cost of the place.
  • Obtain initial permission from Dubai's Department of Economic Development.
  • Office space is required on Dubai's mainland. A registered office address is required for the issuance of a Trade Licence. Information concerning an ownership agreement or tenancy might be supplied as verification of a registered address.
  • If you match all of the aforementioned criteria, you can apply for a Dubai mainland licence. In Dubai, United Arab Emirates, the Dubai Economic Department (DED) is in charge of providing mainland licences.
  • Submit the required documents for Company Formation, as well as the relevant licence fee, to the Commercial Registration Department and the Department of Economic Development.

Read More: Comprehensive Guide on Opening an Investment Company in Dubai

Documents Required for a Company to Be Established in Dubai's Mainland

Individual and corporate shareholders have different paperwork requirements:

Individual Stockholders

  • Passport copies of expat owners, directors, and managers, as well as the Visa page and entry stamp (when shareholders enter UAE)
  • If the shareholder/manager is on a work visa with any firm in the UAE, the employer must provide a No Objection Certificate (NOC).
  • a copy of the national ID card of the UAE National Partner

For the benefit of Corporate Shareholders

  • The UAE Embassy's Certificate of Incorporation and Memorandum and Articles of Association have been legalised.
  • No objection certificate from the Free Zone/Offshore Authority is necessary if the corporation is a shareholder in the proposed LLC.
  • The firm's original Board Resolution, as well as a notarized and legalised Power of Attorney from the UAE Embassy.

Registration of Trade Name for Formation of Private Shareholding Company

A trade name separates one company from another. It also represents the company's nature and structure. An investor can apply for a trade name through each emirate's economic department's website or mobile application.

Provisions for deciding on a trade name include:

  • The business structure acronym (legal form of the firm) must be followed by the trade name, such as LLC, EST, PJSC, PrJSC.
  • not to transgress the country's public morals or public order
  • be compliant with the desired type of activity and the company's or business entity's legal status
  • Not contain the names of any religions, governing authorities, or foreign organisations' names or logos
  • Not have previously been registered

License for Private Shareholding Company Formation in Mainland

A mainland licence, also known as an onshore licence, permits persons to conduct business without limits both within the UAE and internationally. The Department of Economic Development (DED) in the UAE is in responsibility of issuing these permits.

Business Entities that can be Registered as Mainland Company

Mainland businesses are business entities that can be registered in the United States.

Branches of the Foreign Office

Branches of the Foreign Office: Investors looking for a place to expand their business can find opportunities in Dubai. Consider integrating your branch office in Dubai Mainland if you're seeking for a place to expand.

Firms of Professionals

They're also known as civil firms, and they're dedicated to a single discipline in order to carry out relevant work in their sector. Unlike LLCs, professional corporations are not restricted by the 51 percent shareholder limit.

Limited Liability Corporation (LLC)

An LCC, which is one of the most common types of corporate entities, can have as few as two owners or as many as 50. The real shareholding ratio determines the proportion of respondents that each partner must bear.

Representative Office

The UAE allows international investors to operate a representative office without the participation of a shareholder. A representative office is less concerned with the company's day-to-day operations and is instead focused on marketing research and promotion.

Conclusion

The Department of Economic Development has given private enterprises permission to conduct any commercial operations in the Dubai Mainland. The Department of Economic Development is in charge of the judicial procedures that are evaluated for the establishment and development of firms on Dubai's mainland. According to trade analysts, incorporating a mainland firm in Dubai is the next crucial milestone for all new entry enterprises. Dubai's market has long been the most lucrative for multinational enterprises and talents; in other words, you needed perfect talent and your clients were happy with your selection.

All you need is a local sponsorship set up under a Dubai LLC corporate structure, which Dhanguard can help you with as well. All mandatory permits and company creation are handled by the Department of Economic Development.

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.

Get Instant Advice