Your LLC Company Formation in Dubai Made Easy

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The LLC company setup in Dubai is an excellent choice for investors who look to expand their businesses and are interested in great investment opportunities in Dubai. Investors prefer Dubai for their company formation because of its positioning and rate of market growth over the years. A Limited Liability Company (LLC) in Dubai is a legal entity which is registered under the Economic Department (DED). The LLC formation in Dubai is no easy task to go about. Without the proper guidance and advice, it takes time and lots of paperwork to establish a Limited Liability Company. Paso experts provide holistic assistance which ensures your license is ready within days.

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There are various types of LLC trade license in Dubai. The general trading license is the most common of them all. Investors prefer this type of LLC license because it encompasses all trading activities except those that require special approval by government authorities. The general trading license offers a great investment opportunity for investors including the import and export business in Dubai. The downside to the general trading license is the cost of acquisition compared to other activities. With the aid of Paso’s company registration experts, your general trading license will be ready in no time.

What an LLC Means in Dubai

An LLC or limited liability company is a corporate structure whereby the members of the company are not personally liable for the company’s debts or liabilities, it is the most common legal form in Dubai and UAE, An LLC must have between 2-50 shareholders, and it can have 1-11 managers for the business, At least 51% of LLCs must be owned by UAE Nationals, and can be owed by GCC nationals by up to 100%, it can be owned by partners of any nationality in accordance with DED regulations, it must have a name derived from its activity or from the name of one partner, it can have more than one branch, Each may undertake one or all the activities of the main license.

Where Can You Start a Limited Liability Company (LLC)

A limited liability company can be issued anywhere in UAE, this includes the seven emirates, each emirate has a separate economic department, or issuing authority which is authorized to issue the LLC license, Free zones can issue LLC licenses also. The Economic Department in Dubai has over 2000 activities, the majority of these activities can be used in an LLC, although the general trading alone includes all direct trading activities that require no special approval, the LLC company can have any commercial, industrial and tourism activity, besides most professional activities.

Steps to Setting Up an LLC Company in Dubai:

  • Select the activity according to the Dubai economic department. Each trade license in Dubai can hold a specific group of activities.
  • Getting the initial approval and acquisition of trade name from Dubai Economic Department (DED).
  • Acquisition of special approvals for some license activities if needed. This should be done before signing any agreement. This is to avoid any problems during the company formation process.
  • All documents must be translated into Arabic by an official translator before they can be presented to the authorities in the UAE.
  • Preparation of the MOA, all the partners should be present to sign it in front of the Notary Public. If any of the partners can’t come to sign, the partner can give a power of attorney to any person and the person would be able to sign on his/her behalf.
  • Acquisition of tenancy contract.
  • Submission of the papers to DED.
  • Finally, issuing the Dubai LLC license.

LLC Company Formation in Dubai Free Zones

Many Free zones in UAE issue LLC licenses, starting an LLC company in a Free zone is easier than mainland in some cases, foreigners can have 100% ownership, besides some free zones are exempted from VAT, The Free Zone LLCs are great for import and export business, there are no custom fees for importing and exporting products, but the business activities are limited to the Free zone areas, if you decided to expand the company operations inside Dubai, you have to use a commercial partner or open a branch inside Dubai.

Advantages of Setting Up an LLC In Dubai:

  • No corporate or personal income tax
  • The Dubai LLC formation offers unrivaled access to the wider UAE economy
  • Liability of the shareholders is limited to their shares in the company’s capital
  • The shareholders will have no personal Liability for the LLC’s Debts
  • LLC may conduct any type of activity
  • LLC can legally trade anywhere in the UAE, including the Free Zones
  • Investors can get a residence visa without paying any bank or security deposit
  • No restrictions on the number of visas that can be obtained
  • No restrictions on the location where the company can rent/buy office premises
  • The government has permanently waived any paid-up capital requirements.
  • Can easily open a corporate bank account and get credit facilities
  • Can own a real estate or buy shares in other companies

Disadvantages of LLC Registration in Dubai:

  • Takes more time to establish except the instant license
  • Costly and time-consuming special approvals may be required from UAE authorities
  • Requires a local partner to have 51% of the shares

Dubai Instant License

The Department of Economic Development in Dubai launched in 2017 a new type of license, the new license called instant license, this license can be issued by only one step, no need for a memorandum of association or a tenancy contract for the first year, anyhow the memorandum of association and the tenancy contract should be done and be ready at the renewal time, this license can have any activity without special approval, and can be of any legal form.

Advantages of Dubai Instant License:

  • No need for MOA for the first year
  • Not required to have a tenancy contract for the first year
  • You can get 2-3 visas in the first year
  • You can get your LLC license immediately

Disadvantages of Issuing Dubai Instant License:

  • Most of the banks in Dubai will ask for the memorandum of association to open a bank account
  • You cannot have unlimited visas, and expand your business without an actual office
  • An extra AED3,000 will be added to the license cost according to DED as market fees
  • Some nationalities need security approval and cannot apply for this license
  • The MOA and tenancy contract should be submitted for any amendment in the license
  • You cannot have activities with special approvals

Protect your LLC Company in Dubai

Starting an LLC in Dubai can have few risks, your LLC in UAE free zones will be owned by you 100%, but in case you wish to start your LLC company in Mainland you should consider a few things, according to the law 51% of DED companies’ shares should be owned by local sponsors, this can risk your investment in the long run, especially if you disagree with the local sponsor, or if he decides to keep the shares, so how can you protect your business in Dubai?

  • Use a professional company to do your LLC company setup and find a local business partner for you
  • The local should be trusted and should be in the business of the company’s sponsorship
  • Protect your company by signing extra legal agreements between you and the sponsor
  • Get a power of attorney from the local sponsor to control the full shares and represent the company
  • Keep a good relationship with the local sponsor and try always the friendly solutions in case of disagreement
  • You can add an extra layer of protection by issuing a good liability insurance policy to protect your LLC and personal assets
Paso has a long experience of forming LLC companies in Dubai, our priority is to protect our client’s business and investments, we will guide you step by step in the process to protect your company, the local partner role will be limited to signing documents and assisting to get government approvals.

How to Convert Your Company to LLC

If you are an owner of a DED company in Dubai, and if your current legal form is a sole establishment or a civil company, you can convert your company legal form into a limited liability company (LLC), you will have all the LLC benefits without changing your current business activity or trade name, there are few conditions to successfully change your company into an LLC:

  • The Economic Department in Dubai should approve the legal form change.
  • Your company activity shouldn’t be a consultancy such as management consultancy, IT consultancy…etc.
  • There must be no remarks or court cases against the company, all remarks should be cleared before the DED approval.
  • You must add a local sponsor and to have 51% shares of the company, the actual shareholders will divide the rest 49% between them.
  • A new memorandum of association should be signed in front of the notary public in Dubai.
  • You can use the same trade name after adding the word “LLC” after the current company name.
  • If you don’t have a company manager or director you must hire one, a shareholder can be the manager also.
  • All the debts and liabilities on the current company will be automatically transferred to the new LLC.
  • The manager will be in charge of all the bank accounts and signing the cheques.

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The Required Documents to Form an LLC Company in Dubai

For individual Shareholders:

  • Application form signed by all the shareholders
  • Passport copy + EID copy of all the shareholders
  • Passport copy + EID copy + Family book copy for the local
  • NOC from current employer for all nationalities except locals and GCC nationals
  • In case the shareholder arrived visit visa, a copy of the visa + entry stamp
  • All shareholders and the manager must be 21 years old or above
  • If the shareholder is below 21, the legal guardian should sign the official documents
  • The shareholders and the manager must enter the country to get the approval

For Corporate Shareholders:

  • License copy or certificate of incorporation
  • Board resolution for the company to be a shareholder
  • All documents must be attested by MOFA and legally translated into the Arabic language
  • Manager passport copy and visa copy + entry stamp
Note: Some nationalities may require a security approval at the time of submission, for these nationalities the shareholder is required to be present, additionally the shareholder should bring the original passport and 6 months bank statement from the resident country.

According to the Department of Economic Development, the LLC ownership rules and requirements are:

First Party Second Party Ownership Rule Requirements
U.A.E National U.A.E National Any ownership percentage
U.A.E National GCC National Any ownership percentage
U.A.E National Foreign Partner At least 51% must be owned by the UAE national
U.A.E National UAE national company Any ownership percentage Corporate in UAE
U.A.E National UAE national company Any ownership percentage Corporate in GCC
U.A.E National UAE national company At least 51% must be owned by the UAE national Corporate in a foreign country
U.A.E National GCC national owned company Any percentage Corporate in UAE
U.A.E National GCC national owned company Any percentage Corporate in GCC
U.A.E National GCC national owned company Any percentage Corporate in a foreign country
U.A.E National Foreign Company At least 51% must be owned by the UAE national Corporate in UAE or GCC
U.A.E National Company owned by a foreign partner and a UAE national who owns less than 68% At least 51% must be owned by the UAE national Corporate in UAE or GCC
U.A.E National Company owned by a foreign partner and a UAE national who owns less than 68% Any ownership percentage Corporate in UAE

Our company formation professionals at Paso corporate services are well-specialized in the setting up of LLC Companies. We fast track your LLC company formation in Dubai and get your company license in a few days only, contact us to start your company today.