The predominant business structure in the UAE is the Limited Liability Company (LLC). Oversight and licensure of LLCs fall under the jurisdiction of the Department of Economy & Tourism (DED) in Dubai, which also categorizes and oversees permissible economic activities.
Unlike companies based in Free Zones, LLCs in Dubai aren’t confined to a specific zone and can freely engage in business across the UAE.
They are also not subject to limitations regarding property ownership. Dubai LLCs are eligible to bid for and undertake government contracts, which can be a significant source of business.
While both LLCs and Free Zone companies can sponsor employee visas, companies with business licenses issued by the DED generally have less restrictive policies regarding the number and type of visas that can be issued.
Foreign Ownership of Limited Liability Company
Under the amendments of Federal Decree-Law No. 26 of 2020, foreigners can own 100% of LLC companies in the UAE. This law revision eliminates the previous mandate for commercial entities to have an Emirati shareholder or agent, thus allowing complete foreign ownership for non-Emiratis of all nationalities in LLC companies they establish.
Over a thousand commercial and industrial activities are eligible for 100% foreign ownership in Dubai. The industries excluded from the 100% foreign ownership provision encompass those involved in oil exploration, drilling, refining, production, and transportation within the energy sector (in all its variations), as well as activities related to electricity generation, gas production, and water desalination, including their transmission and distribution.
Steps to Establishing an Limited Liability Company (LLC) in Dubai
Please consult with one of the best legal consultants in Dubai for advice on the appropriate legal structure based on the business activities planned and target markets.
The documentation required varies with the business type and includes, but is not limited to:
- Passport copies of all shareholders and managers;
- UAE residence visa copy, if available;
- No Objection Certificate (NOC) from the sponsor of the current UAE residence visa, if applicable;
- Business plan, if applicable.
If a corporate entity is a shareholder, the following documents are required:
- Company’s memorandum and articles;
- A board resolution to establish a new LLC in Dubai;
- A power of attorney for the General Manager to set up the new LLC in Dubai;
- A certified translator should translate all documents into Arabic for submission.
All documents must be notarised and attested in the applicant’s home country and at the UAE consulate or embassy; subsequently, they must be attested at the UAE Ministry of Foreign Affairs.
Trade Name Selection: Pick a company name adhering to UAE naming conventions and trade activities. You’ll receive a trade name certificate necessary for the DED license application.
Obtain Preliminary Approval from DED: Submit necessary information and documents to DED for initial approval. This step is relatively quick and helps procure other required documents for the business license.
Secure Commercial Space: Lease or buy a commercial space in Dubai. You’ll receive tenancy documents, including EJARI.
Final Documentation Submission: Submit the below documents required by DED for LLC license issuance, including:
- Trade name certificate and preliminary approval
- Tenancy contract approved by Dubai Municipality (EJARI)
- Memorandum of Association
- Governmental approvals (for particular business types)
Note: If you are looking for any type of legal services or advice, don’t hesitate to contact one of the best law firms in Dubai.
Cost for Registering an LLC Company in Dubai
The cost of obtaining an LLC license in Dubai can significantly vary. Since each business has unique financial considerations, providing a precise cost estimate without understanding specific details is challenging.
Factors influencing the total cost include the expenses for initial approval, attestation fees for legal documents, and the rental cost of the commercial premises. Given these variables, the price for a Dubai LLC license typically ranges from AED 12,500 to AED 50,000, fluctuating based on the decisions made during the incorporation process and any additional incurred costs.
Please get in touch with us for a precise and current cost estimate tailored to your specific business needs. Our business setup consultants in Dubai will offer a personalized quote that accurately reflects the scope of your intended business activities. Consulting with experts ensures you get a thorough breakdown of all the expenses associated with setting up your LLC in Dubai.
Keeping your LLC License Valid
Your initial LLC license will be valid for one year. To renew an LLC license in Dubai, the application can be filed at least 30 days before the license expires. Failing to renew your license could result in a penalty of AED 200 per month. The following documents are essential for this process:
- Ejari Registration Certificate and lease agreement: A valid Ejari registration and lease agreement is mandatory for license renewal.
- Copy of Previous Trade License: A copy of your existing trade license is required.
- BR/1 Form: This is the official license renewal form. It must be filled out, signed by all current partners, and submitted to the DED for approval.
- Passport Photocopies of Business Partners: Submit photocopies of passports for all business partners to identify the stakeholders in your business.
You have the option of applying either online or offline. After the DED verifies your application for LLC license renewal, they will issue a payment voucher for you to settle the renewal fees. Once you receive this voucher, your next step is to pay and finalize the registration process. After completing your payment, the DED will issue the renewed trade license, effectively updating it. The typical cost for renewing a trade license ranges from AED 8,000 to AED 15,000.
We offer free consultation for any type of business setup in Dubai or anywhere in the UAE. Contact us today.
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