The United Arab Emirates consist of 7 Emirates: Abu Dhabi the Capital of the UAE, Dubai which certainly the most popular Emirate, Sharjah, Ras Al Khaimah, Fujeirah, Um Al Quain and Al Ain. All of the Emirates have separate Economic Departments which deal with company registration in their Emirates. Dubai as the most popular Emirates certainly leads the way in the number of registrations as well as processes. Dubai is the benchmark for all other Emirates in implementing company law and modernizing the way business and registrations are done in the UAE.
There are 5 different type of companies that can be registered under the Dubai Economic Development:
Sole Establishments have to be owned by one physical person only. This person can be from any nationality. Therefore an establishment can be owned 100% by a foreign national. Establishments can be set up for Services licenses only, for example Information Technology services or Management Consulting. An Establishment cannot be set up for a Commercial activity such as Equipment Trading for example. A UAE national still has to be registered as an agent of the establishment. This type of company, has not Memorandum of association, no shares or limited liability to the owner. The Establishment has to appoint at least one manager who will be shown on the license of the Establishment. The manager can be the same person as the owner of the Establishment
Limited liability companies have a similar constitution to limited companies in other countries. Companies may have up to 50 shareholders, which can be physical persons as well as entities. It is compulsory for a UAE national to hold at least 51% of the shares for most licensed activities, especially commercial activities. There are a number of exceptions such as law offices or audit firms where the UAE shareholder may hold a small share. A Memorandum and Articles of association are drafted and notarised by Dubai Courts and then submitted to the DED for approval before the company is incorporated and a lisence is issued for the company. The company has to appoint at least one manager to manage the company. It is possible to appoint up to 11 managers who will be registered and shown under the license of the company.
A civil company is a business partnership which can be owned by two or more partners practicing a civil partnership such as a consulting firm or a beauty salon. Two foreign nationals may establish a partnership provided a UAE national is appointed as agent of the Civil company. There is a memorandum drafted for this type of company but no shares are issued, instead percentages are allocated to the partner of the company.
This is a popular option to set up activities for existing corporates in other jurisdictions as well as companies and individuals which are new to the UAE. This set up allows for 100% ownership although a UAE national has to act as an agent of the company. This set up is not a separate entity of the mother company and remains part of the mother company’s activities. The branch has to be VAT registered if the VAT threshold of 350,000AED per year is surpassed. An additional cost of about 3,000 USD has to be budgeted for when setting up a branch of a foreign company as a number of documents need to be legalized in the country of origin of the mother company as well as their UAE Embassy or the closest UAE embassy available from the country of origin of the mother company.
- Branch of Freezone Company or Brannches of Companies based in other Emirates – this enables Freezone companies to trade freely on the mainland as well as protect full foreign ownership
- DED Trader – This is an initiative to license traders on social networking sites such as Instagram and facebook
- Representative office – This type of company if appropriate for foreign companies looking to promote their products, however any transactions have to be made with the foreign company
- Limited Partnership – This is a company with one or more partner may be separately or jointly liable for the company’s liabilities
- Private Joint Stock company – email us to find out more
- Copy of shareholders and managers’ passports
- Copy of applicant residence permit or visa if applicable
- No Objection letter from the company that has issued the visa permit to the applicant
- Company’s articles if applicable
- Letter of Authorization from managing director or shareholders or POA
- Copy of parent companies incorporation certificate and MoA legalised in the country of origin
The cancellation of a license is permanent and irreversible and cannot be re-activated. All legal forms needs to submitted the following required documents:
- Required completed form
- Copy of License
- Cancellation of labour card and immigration card
- Signatures of shareholders and UAE national partner/agent
- FTA approval if the company was VAT registered
- Other government authority approval may apply for certain licenses