Limited Liability Company (LLC) in Dubai

About

All mainland (onshore) UAE legal entities are required to be licensed by the Department of Economic Development (DED) and governed by the UAE Commercial Companies Law (CCL). The main advantage for foreign investors establishing a business in mainland UAE is that, unlike the Free Zones, there is no territorial restriction on business activities or the location of offices/premises. A mainland company therefore has the freedom to trade anywhere in the UAE or wider Gulf Cooperation Council (GCC) states, including all the Free Zones, and will have a far wider range of real estate options from which to choose.

Limited Liability Company (LLC)

The standard type of company in the UAE mainland is the Limited Liability Company (LLC). The DED is the government body authorised to issue all licences for LLCs and is responsible for classifying and regulating the types of economic activity that may be undertaken.

An LLC is not restricted on where it can trade in the UAE (unlike Free Zone companies) or GCC; furthermore there is no restriction on real estate ownership, or on the number of visas that can be obtained. There are no minimum share capital requirements. A mainland company is not required to pay the standard 5% customs duty on imported goods.

UAE Foreign Ownership

For foreign investors setting up an LLC in the UAE, you can now have 100% foreign ownership. In some cases, when setting up an LLC (depending on the business activity), the CCL prescribes that a % of shares must be registered to a UAE/GCC national sponsor (either a UAE/GCC national individual or a corporate entity 100% owned by UAE/GCC nationals), often referred to as a local partner. However, in most cases businesses in the UAE can be 100% foreign owned.

If cases where your business requires you to have a local partner, Sovereign has created a “corporate shareholder” model that allows clients to effectively maintain 100% ownership control of their business while remaining in full compliance with UAE companies law.

Connect with our consultant to guide you through LLC Set Up in UAE

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Sovereign Corporate Shareholder Model

Sovereign Corporate Services has created a number of 100% UAE-owned LLCs – e.g. a Sovereign Corporate Shareholder LLC – that it fully manages and controls through power of attorneys and other legal agreements. These companies can act as the 51% local partner (Corporate Sponsor) and, through a suite of risk mitigation documentation, pass all management control, financial control and the day-to-day running of the business back to the 49% shareholder in return for a “Fixed Annual Sponsorship Fee”.

Sovereign will not take any commercial role in the new company and its annual fee will be fixed such that there will be no variation dependent on increased turnover or profitability of the business.

The primary benefit of the Corporate Sponsorship model is that the investor will not be dealing with an individual person as a shareholder but rather with an international, fully licensed and regulated company that has no emotional ties to the business and no local vested interests.

Sovereign has multiple signatories who are available all year round and, as a company, a Sovereign Corporate Sponsor offers perpetual succession such that the business will not be affected by the ill-health or death of a local individual partner.

A Sovereign Corporate Shareholder LLC can also act as the local services agent even where a 51% local sponsor is not required – for example, for a Professional Licence, Branch or Representative Office.

Strategic Partnership with Government of Dubai

Sovereign Corporate Services has entered into a formal, strategic partnership with Dubai FDI, the dedicated investment development agency within the DED. Sovereign has signed a Memorandum of Understanding (MoU) with Dubai FDI that sets out a commitment to attract foreign companies to establish and grow in the region and to optimise the services offered.

This partnership with Dubai FDI not only guarantees that foreign investors receive the best service available, but will also ensure that they can be fast-tracked through setting up procedures and introduced to a wider audience in the region.

Steps to setting up an LLC:

01

Speak with one of Sovereign’s consultants who will advise on the correct legal structure based on the activities that a business intends to undertake in the UAE and its intended markets. A client may further choose to obtain a legal opinion to confirm Sovereign’s advice.

02

If a mainland (onshore) legal entity is the preferred option, then a UAE local partner will be required to hold 51% of the shares in the LLC. See the Sovereign Corporate Shareholder model above.

03

The required documentation will vary greatly depending on the type of business activity, including but not limited to:

Certified passport copies for all shareholders and managers;
Copy of the UAE residence visa, if applicable;
No Objection Certificate (NOC) from current UAE residence visa sponsor;
2 x Certified proofs of address for each shareholder;
1 x Signed Sovereign Application Form;
1 x CV for each shareholder;
1 x Professional / bank reference letter for each shareholder.

04

All documents are required to be notarised and attested in both the applicant’s home country and at the relevant UAE consulate. The notarisation process should be commenced as early as possible because it can take a significant time.

05

If the shareholder is to be a corporate entity, the required documentation will include: