How can I set-up Dubai LLC Formation

Limited-Liability Company (LLC)

The minimum and maximum number of shareholders in a limited liability company are two and fifty, respectively. Shareholders’ liability is restricted to their capital shares. Except for insurance, banking, and money investment, the corporation is allowed to engage in any form of activity. The minimum capital requirement law was repealed in the UAE on August 10, 2009. The following must be stated in the memorandum of association.

Trade name of the company, its goals, its headquarters, its duration, the shareholders’ names, nationalities, addresses, and residences; the names and nationalities of the company managers; the amount of capital, each shareholder’s share, and a statement of capital paid in kind (if any); the distribution of profits and losses, which may not always be in the same proportion as the capital; and the chosen method of notification.

The capital deposit rule has been abolished in Dubai. It is possible to incorporate a Limited Liability Company without a bank deposit certificate and an auditor certificate. The required minimum capital in Abu Dhabi is Dh150,000. As soon as the incorporation is finished, the manager of the firm will be able to administer the account. The Company’s Manager, who may be more than one, shall have complete administrative and financial authority. A shareholder may sell all or a portion of his or her shares of the business to another shareholder or to a third party. No more than five authorized managers, who need not be employees of the organization, are in charge of management. Up to 49 percent of an LLC may be owned by non-UAE nationals.

Silent Partner

A greater percentage of Dubai Limited Liability Companies use the local UAE sponsor as a “silent partner.” The local UAE sponsor often receives an annual “sponsorship fee” under this structure in exchange for ceding management control of the business to the international investor.

Steps of forming a Limited-Liability Company (LLC)

1. Name reservations can be made at Al Tawar Center in Qusais or through the Department of Economic Development (DED) or Tasheel Center. Service fee included in fees of Dh741. At the time of license renewal, there will be an additional fee of Dh2,000 for using short terms, abbreviations, and foreign or English words. Along with first licensing payments, first time fees must be paid. Trade names such as “blue,” “red,” and other colors cannot be reserved, nor can “country” or “continent” names.
2. Department of Economic Development (DED) or Tasheel Center first approval for the activity. To be paid at DED is the $300 first approval cost.
3. Initial approval documentation requirements include: completed application, copies of partners’ passports, copies of local partners’ naturalization books (Jinsiyya), No-objection letter from the sponsor for foreign partners is required (visa holders should attach a copy of their visa even though NOC is not necessary).
4. Preparing Memorandum of Association (LLC Agreement)
5. Memorandum of Association attested by a notary public. The court agreement must now be typed by a legal translator, or it must have the legal translator’s stamp and signature if it was produced at a regular typing facility.
6. Tenancy Contract: Before leasing a space, it is advised to make sure it is appropriate for the business by calling the counter of the Dubai Municipality’s planning department at the Department of Economic Development at (04-2020105) or the Municipality’s telephone at (04-2063788). Obtain planning department approval for the lease from the Dubai Municipality at DED.
7. Send the Department of Economic Development the Initial Approval, Name Reservation Certificate, Attested Memorandum, and Tenancy Contract.
8. Payment vouchers will be sent at the same moment or after two days, they can be downloaded from the DED website.

Special approval required for certain business activities from the concerned authorities:

• Tourism businesses: For inbound tourism, a bank deposit of Dh100,000 is required. A bank deposit of Dh200,000 must be made for outbound tourism. Until the license is revoked, these deposits are final.
• Travels: Dh100,000 is to be deposited at the Department of Tourism & Commerce Marketing for Travels For Travel Agency. Until the license is cancelled, this deposit is final.
• Businesses engaged in construction: When obtaining a license for a building contracting company for the first time, the Department of Economic Development will charge an additional Dh10,000. Minimum office space requirements are 1500 square feet.
• Dubai Customs: Would accept a deposit of Dh50,000 from the customs broker. Until the license is cancelled, this deposit is final.
• RTA Activities (after paying costs for initial RTA approval)
  1. Rent a Car: 5000 dirhams
  2. Rent a bus for $1000.
  3. Renting a bus to transport passengers costs Dh1000.
• Trading in telephones and telecom equipment: Requires a payment of Dh5500 to the Telecommunications Regulator Authority (TRA). The cost is one-time only.
• Security services: include individual guarding, party security, and property guarding.
  Department of Protective Systems, Dubai, gave initial permission. Tel. 04-2048312
• Activities connected to oilfields: and natural gasinitial endorsement by the Ruler’s Court
• Money Transfer: initial endorsement from the Department of Protective Systems and the Central Bank of the UAE
• Trading mobile SIM cards: creating stamps and seals, and jewelry Department of Protective Systems’ initial clearance

Frequently Asked Questions

Q: What’s the maximum number of managers allowed in the memorandum of association?

A: Maximum five, minimum one. According to Article No. 235 of the Commercial Companies Law, “A LLC shall be managed by one or more managers, who shall be selected from the partners or otherwise, provided that they do not number more than five. The company’s memorandum of association or a separate contract must be used to designate managers, who may be appointed for an unlimited amount of time.

In accordance with Article 236 of the same law, if a manager is appointed in the Memorandum of Association without restriction to a specific time period, in such a case, the manager shall remain in the company for the duration of the company, unless the Memorandum of Association provides for the possibility of removing the individual.

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