LLC Company Formation in Dubai, United Arab Emirates

The Limited Liability Company (LLC) remains to be one of the popular legal structures for the investors who wish to set up a business in Dubai to cater to their customers in the local market. Unlike the free zones, the LLC offers the investors a real benefit of conducting business within the UAE market directly. By choosing LLC company formation in Dubai, the investors get personal protection from liability. In the event of any unforeseen events, the entrepreneur’s liability is limited at the amount he or she invested in the company.

LLC is known for its beautiful blend of partnership and corporate structures. What makes the LLC company formation in Dubai distinct from the free zone business setup is that LLC can deal in Dubai mainland without any restrictions and are also allowed to deal within freezone and outside UAE and also LLC company needs to comply with the requirement of a local sponsor who holds at least 51% of the shares in the company. The LLC needs to have 2-50 shareholders where each of them is liable to the volume of shares they hold in the capital. The investors can also change the LLC into any other legal form.

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    Steps for Forming an LLC Company in Dubai

    1) Select Business Activity

    The investors need to select a business activity that corresponds to the LLC legal structure from the DED list of permissible activities. The DED permits more than 2000 business activities in Dubai related to industrial, commercial professional and tourism sectors.

    2) Reserve Trade Name

    The trade name should follow the DED guidelines and should match with the license type of the business. The trade name can be reserved with the DED through the online mode, but this could be done with the help of the best business setup consultants in Dubai. The trade name would be cancelled or changed by the DED if it is found to be identical to other existing business or brand names.

    3) DED Initial Approval

    After reserving the trade name, the investors need to get an initial approval certificate from the DED. The certificate expresses the DED’s consent for starting the LLC in Dubai. The initial approval is a green signal for the investors to move further into the business setup process.

    4) Prepare Memorandum of Association

    For starting an LLC company in Dubai, the investor and the business partners are required to draft and sign a Memorandum of Association (MOA). Drafting an MOA needs to be duly attested. Business setup consultants in Dubai could guide the investors in this process.

    5) Renting Office Space

    The LLC businesses in Dubai need to have a physical address. For this, the entrepreneur can sign the tenancy contract with the landlord and register the contract with Ejari for attestation. The attested contract should be submitted to the DED to proceed further with the license issuing procedure.

    6) Issuance of License

    After renting an office space, the entrepreneurs can submit all the documents to the DED. It should be noted that along with the required documents, the DED initial approval receipt and duly attested MoA need to be submitted. The company formation specialists in Dubai, UAE will ensure that all the documents are properly submitted. If everything is in order, the DED will issue the trade license for the LLC company.

    Also read: 5 Fundamental Factors to be Considered Before Setting up a Business in Dubai

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    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).

    Also read: Why LLC Company is Still a Preferred Choice for Businessmen in Dubai?

    a) Activities

    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.

    b) Ownership

    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.

    c) Manager

    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.

    d) Capital

    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.

    f) Branch

    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.

    Also read: Instant License Dubai – Start Your Business in Just 5 Minutes in UAE

    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

    LLC Company Formation Consultants in Dubai

    Several confusions are likely to arise in the mind of an investor while pondering over the company formation opportunities in Dubai, UAE. A strategic decision has to be made between LLC company formation in Dubai mainland and the free zones. The lack of right guidance about the complexities of the procedures and regulations would take the businessmen the wrong way. That is why thousands of businessmen have put their faith in a reputed business setup service provider like Jitendra Business Consultants (JBC). JBC’s highly qualified business consultants can guide the investors through every step of the LLC company formation right from the registration to the company incorporation. With JBC’s assistance, the investors need not to worry about the burdens of documentation or DED regulations. JBC will take care of every requirement of the LLC business setup process and the investors can plan their business strategies with peace of mind.

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