Mainland LLC setup in Dubai is one of the most sought out company formation solutions to establish a general trading or services company in UAE. LLC owners enjoy a range of benefits such as fast visa procurement, cost-effective office space provisions, limitless access to local market and exposure to UAE’s vast economy.
What is Limited Liability Company?
LLC is one of the most popular forms of company registration in Dubai, offering an array of advantages for foreign business owners. An LLC can be formed from a minimum of two and a maximum of fifty shareholders, where the foreign investor shares partnership with an Emirati local or GCC National as Sponsor. The sponsor is entitled to a minimum of 51% shares leaving the remaining ownership of shares to the investor.
The UAE Cabinet recently approved 100% foreign ownership of UAE based companies to be implemented by the end of 2018. This announcement will further boost business investment in the country and provide an ideal business setup choice for innovative technology-based companies.
Steps to Setting Up an LLC
- The first step is to decide an appropriate legal structure for your business venture
- Select your business activity. You can choose from over 2000 business activities offered by DED
- To legitimize your business presence register trade name with DED to gain legal status
- Select a suitable location and lease office space to start your business operations
- Present all legal documents to acquire Trade License from Dubai DED
- Secure approval from Ministries and Gov. bodies in-case of special activities
- Collect your official Trade License, Certificate of Incorporation, MOA, Share certificates, and Tenancy Agreement of Dubai office space
- To secure legal residence in Dubai, proceed to LLC Dubai visa processing and other legal documents
Benefits of Setting Up an LLC in Dubai
- As a LLC owner it reduces the risk of your loss as it would be divided among the stakeholders against the extent of their shares in the capital
- You get the ultimate flexibility of conducting business all across UAE and GCC states unlike offshore or freezone company formation
- DED allows over 2000 business activities to choose from with no limitation on the number of visas
- As an international investment marketplace, you get a specialized environment and diverse business community to nurture, grow and prosper
- Businesses also get access to top tier logistics support, excellent infrastructure and versatile workforce available in Dubai
- Our partners will assist you in providing the right local sponsor for LLC Dubai formation with full disclosure and legal support
- With a standing record of the lowest crime rate in the world, UAE gives a safe zone with access to healthcare facilities, intellectual property protection laws and company liquidation facilities etc
Sponsorship Agreement During LLC Company Formation
In LLC formation structure, an Emirati or GCC National sponsors the business venture, holding a minimum of 51% shares making the foreign investor entitled to the remaining 49% shares. Although the sponsor holds majority shares, the company name is registered on the name of the foreign investor and the sponsor has to interference with the company daily administrative, financial and legal affairs. This agreement is attested by the court during LLC formation in Dubai.
Role of Sponsor in LLC
The sponsor gives the foreign prospect a legal standing in Dubai, adhering to UAE’s legislation and providing further assistance in documentation done in UAE’s native language Arabic. Most legal documents are still typed in Arabic which creates a language barrier for expats who are new to UAE’s culture. Sponsors and Service Agents/PROs help investors in interpreting these documents, signing it for them and representing them in the court during LLC Company formation process.
Types of Sponsors
There are three types of local sponsorships investors can avail in UAE, individual sponsorship, corporate sponsorship and Local Service Agent (LSA) as explained below.
- Corporate Sponsorship
In a Corporate sponsorship structure, an Emirati-owned company or a GCC company owns 51% shares of a company that is owned by a group or an individual of foreign origin. Since the foreign-owned business is sponsored by a company, trading Companies, Manufacturing units and other Dubai mainland LLC businesses can benefit from the corporate sponsor in terms of professionalism and transparency.
- Individual Sponsorship
Individual sponsorship is where an Emirati national over the age 21 sponsors a company owned by an individual or a group of partners of foreign origin in his/her own individual capacity. Such sponsorships are quite common in UAE where the Emirati National can be a business owner, a professional or a government employee and own 51% shares of the company, or transfers the power of attorney to the foreign partner depending on the terms and conditions discussed.
- Local Service Agent
Local Service Agent liaisons with the government departments as the company’s representative but will not own 51% shares or any liability of the company. An LSA is required when a foreign professional, artisan, engineer or doctor plans to set up business in UAE and offer his/her professional expertise. As per the commercial agreement, the LSA will be paid a fixed annual fee in most cases; however, it may also depend on the agent’s social and family prominence in UAE. Other than professional licenses, an LSA can also be appointed for a branch of foreign companies and representative offices.
Dubai LLC Formation Fees
|Indicative Starting Prices*|
|STEP 1: SELECT ACTIVITY TYPE||Initial Approval fees||Local Sponsor fees*||License fees*|
|Service / Consultancy||1,000||8,000||8,000|
|* Please note that the pricing (Sponsorship fees, License fees) varies with the nature of the business Activity chosen.|
STEP 2: SELECT OFFICE SPACE
Acquiring physical office space is mandatory in order to obtain a Dubai mainland business license except in the case of an Instant License. Please note that the pricing indicated above will vary with the chosen Office size & Visas required (min. Office size: 200 sq.ft.).
5% – 10% Additional Market fee is applicable on office rent
|STEP 3: Additional Charges||Details||Validity|
|Investor Visa||AED 3000 per investor*||3 years|
|Employee Visa||AED 9650 per employee*||2 years||*depends on labour category|
|License amendment||AED 3,000||1 year|
|Additional Activity||AED 2,000*||1 year|
Dubai LLC Company Setup Documents
- Get certified passport copies of all the shareholders, directors and managers
- Obtain NOC letter from current sponsor if the investor is UAE resident
- Acquire registration application from the DED
- Trade name reservation concerned departments
- Secure Initial approval from DED
- Documents such as Tenancy Contract and Location Plan with attestation from Planning Department and Civil Defense Department of Dubai Municipality
- MOA duly attested from the public notary
- Shareholders’ bank reference letter