Company Formation

Built for trade. A Gateway to International Trade and Growth.

Mainland, or onshore companies, can operate internationally and within the UAE’s onshore market i.e. outside of Free Trade Zones, including contracting with government entities. Whilst they can be incorporated anywhere within the seven Emirates of the UAE, the license will be issued by the licensing authority in each Emirate; in Dubai, this is the Dubai Economy, more commonly referred to as the ‘DED’ Additional approvals may be required from government bodies for specific business activities, such as construction, healthcare and/or sports-related activities.

There are benefits for establishing a business as a mainland company. Mainland companies offer location flexibility and a broad scope of trade with zero trade restrictions. A mainland company can also open multiple branches, driving opportunity to scale across the Emirates.

Incorporating a Limited Liability Company (LLC)

Foreign investors can conduct business through a Limited Liability Company (LLC).LLCs are generally incorporated to carry on trading and other commercial activities, although may now be incorporated for some professional activities.

An LLC can be incorporated with a minimum of two and maximum of fifty shareholders, in many cases, not less than 51% percent of the company shares must be held by a UAE national.

An LLC must take a lease of suitable office premises from which to operate and be managed by a General Manager who must be or become a resident of the UAE. There is no minimum share capital for an LLC, but the capital must be adequate for the activities to be carried on e.g. some insurance-related activities command a higher share capital.

Given its limited liability status, an LLC is one of the most preferred corporate structures adopted by foreign investors and entrepreneurs wishing to establish a solid foothold in the region.

Some LLCs can now be 100% foreign-owned depending upon the activities to be carried on. In this instance, the General Manager must be a resident of the UAE prior to incorporation and will be responsible for maintaining the LLC’s labour and immigration accounts (which enable it to hire and provide visas for its people).

CBD can carry out licensing feasibility to determine the most up-to-date ownership requirements.

Establishing a Branch of Commercial Companies

A branch of a foreign company is typically set up to carry on professional or services-related activities. A branch is an attractive prospect to some foreign companies as they can retain 100% legal ownership. However, this may have tax implications in their home jurisdiction so taking proper tax advice is crucial.

A branch must have suitable commercial premises from which to operate, which could include a ‘hot desk’ in a Business Centre depending upon the scale of its operations. Some branches no longer need to engage a UAE national as their national services agent, although there are still many practical benefits to this arrangement.

Branch offices must obtain an operating license from the relevant Emirates’ Department of Economic Development.

Establishing a Representative Office of Foreign Commercial Companies

If you are a foreign company which has appointed a distributor or commercial agent in the UAE and are looking to grow your business, you may wish to elect for this type of corporate structure. It is a useful vehicle which enables foreign investors to have a legal presence in the UAE to market and promote their goods or services but they are not allowed to trade.

Establishing a Representative Office of Foreign Commercial Companies

An Establishment (sole trader) or Civil Company (professional partnership) may be set up by individuals wishing to operate in professional or consultancy-related fields, such as engineers, lawyers, doctors, and/or accountants.

A UAE national local services agent must be appointed in each case but does not have any management or other control and is not liable financially. The personal assets of the owners may, however, be at risk as these corporate structures do not offer any limited liability protection.

LIVING AND WORKING IN DUBAI

Once your UAE business is established, it must be registered with the Labour and Immigration authorities in order for it to sponsor its people and their families. CBD’s experienced labour and immigration team will ensure that this process is handled in a timely manner so that new, or existing, businesses have the resources they need for unrestricted operations.

Establishing an entity in a UAE Free Trade Zone

The UAE has over 40 specialised free trade zones which offer many advantages to foreign investors, including 100% foreign ownership, exemption from customs duties on imports and re-exports and a 50-year moratorium on corporate taxation.

Each Free Zone has a specific licensing authority, laws and regulations which govern the registration and operations of a Free Zone business. Free Zones can operate in ‘mainland’ Dubai but only through a commercial agent/distributor which holds the specific licence granted by the Economic Department in the territory in which they are registered.