Salient Features of LLC Business Set Up in Dubai Mainland
While the free zones in the UAE put multiple restrictions on the activities, the LLC company formation attracts the investors with the flexibility to choose from more than 2,000 business activities permitted by the Dubai Economic Development (DED).
Investors who form an LLC in the Dubai mainland are allowed to conduct business in broad categories of activities under industrial, commercial, professional or tourism. The investors need to select their business activities from the list of activities permitted by the DED. However, certain special activities such as medical, transport, construction etc require approvals from the concerned authorities that regulate them. These authorities include the DHA, RTA, Dubai Municipality, etc.
The DED mandates that at least 51% of the shares in the LLC should be owned by a UAE national who acts as the local sponsor. The foreign shareholder, individual or corporate can be 49% shareholders in the LLC business setup. UAE National (called the sponsor) are usually not active and get annual fixed sponsorship fees as against any share of profit.
The entrepreneurs can appoint up to 11 managers for the LLC business setup in Dubai. The partners of the company are allowed to become managers. The manager has full powers of administration subject to the clauses in the Memorandum of Association. Within the scope of his or her powers, the manager’s actions and commitments are binding to the business.
The DED mandates that the investors need not specify the capital ( AED 300,000 minimum in Dubai and AED 150,000 in Sharjah) but it must get a mention in the Memorandum of Association. The LLCs are not allowed by the DED to offer its shares to the public. Dubai Mainland LLC, therefore, cannot have a public subscription to establish or increase its capital or secure loans, and it may not issue any negotiable stocks or shares.
e) Trade Name
Reserving a trading name with the DED is one of the first steps in LLC formation. Dubai Mainland LLC’s trade name should be based on its activity or it could be derived from the name of its partners. The company’s name should have the term “with limited liability” suffixed to it.
The LLC company formation allows investors to open one or more branches. Each of the branches can carry out activities of the main trade license. The investors are also allowed to sell and waive the LLC branches to any party.
Benefits of Establishing an LLC in Dubai
a) Easy Business Setup Process
Most of the foreign entrepreneurs prefer the LLC business setup in Dubai due to the lesser number of hurdles in the company formation process
. The DED has taken plenty of efforts to make the LLC company formation quicker and easier. The procedure of registration can be done online and with the introduction of the instant license system, the entire process has become more investor-friendly.
b) Opportunity to Trade with the Larger UAE Market
The LLC company formation provides a great opportunity for entrepreneurs to trade with the entire UAE market directly. On the contrary, free zones are incorporated within a designated jurisdiction of the emirate where the company is allowed to conduct business inside the same free zone. This is one of the top reasons why the Dubai mainland LLC company formation remains to be more popular.
c) Benefits of Multiple Visas
Choosing the Dubai mainland LLC setup, the investors get the freedom to apply for unlimited visas, depending on the volume of office space they have rented. The general space requirement is 100 sq. ft. of office or warehouse space per visa.
d) Limited Restriction on Business Activities
An LLC company in Dubai offers the freedom to conduct a wide range of business activities. This is a sharp departure from the business setup in the free zones where there is a restriction on the permissible activities. For the companies concentrating on activities like audit, banking, restaurants and travelling an LLC on Dubai mainland is the best option.
e) Branches in the Other Emirates
By setting up an LLC company, the businessmen get a cost-effective way to expand their presence in the UAE. An LLC established in Dubai mainland is allowed to open branches in other emirates as well.
f) Sponsoring of Dependents
While setting up an LLC company in Dubai, UAE, the entrepreneurs become eligible for an investor visa, which grants them the investor status in the UAE. This allows the investors to sponsor family members and domestic staff for their visas as well. The process for a visa for a spouse, child, maid or driver, is almost straightforward.
Documents Required to Start an LLC Company in Dubai, UAE
- Initial approval form duly signed by all the partners
- Trade Names
- Passport copies of all the shareholders
- MOA duly attested
- Tenancy Contract of office Minimum office space required 500 Sq.feet.
- Details of the Shareholdings
- Address & Contact nos. for preparing MOA
- NOC from the current Visa sponsor if the foreign shareholders/Manager is UAE resident