Dubai is one of the Middle East’s most cosmopolitan and affluent cities, having characteristics of both Eastern and Western countries. Giving start-ups a good revenue percentage, several business owners consider this destination as the most attractive and economical spot in the world for business. This is exactly why several Limited Liability Companies are the most common form of business in the UAE. Let’s explore in detail these companies and how much does it cost entrepreneurs to form them in Dubai.
What is an LLC Company?
A Limited Liability Company is a business structure that offers the personal liability protection of a corporation. The liability of the company limited to the company only or upto the shareholder capital of the company. It can be formed by at least 1 shareholder to maximum of 100 shareholder as per the new amendment of law no 2 of 2015 in UAE commercial companies. These members have limited liability to their shares in the business capital. In such companies, now days from June 2021 foreign national or any individual person or the corporate entity can become 100% owner of the company without appointing UAE national in the company as 51% shareholder of the company. LLCs are the most common type of company in the UAE mainland.
The Department of Economic Development (DED) government issues licenses for the LLCs and is accountable for categorizing and regulating the types of economic activities that may be undertaken. Such companies do not have any minimum share capital requirements. Such companies are an easy way to structure the business to secure your personal goods. They have a flexible management structure, offer liability protection, and have certain tax advantages as well.
Why Setup an LLC Company in Dubai?
LLC offers several advantages to business owners as a standard. However, the benefits become greater when such companies are formed in Dubai. Therefore, several smart entrepreneurs prefer forming an LLC company in Dubai due to the following advantages:
- A Limited Liability Company provides the advantage of limited liability to the shares in the capital.
- LLCs have the leverage to conduct any business activity except for banking, insurance, and investment.
- LLCs can legally trade anywhere in the UAE including the free zones.
- There are no restrictions on the location where the company buys or rents office premises.
- LLCs can obtain several visas as there are no restrictions on them.
- The DED government has officially waived off paid-up capital requirements on LLCs.
- Easy process of opening bank account of the company
- Maximum visas under the company even with small or virtual office.
- International recognition of the company.
What Are the Requirements to Setup an LLC company in Dubai?
Documentation is one of the mandatory requirements of setting up an LLC company in Dubai. Below are the required documents to form an LLC. We have presented the standard ones as the requirements greatly vary depending on the business nature.
- Certified passport copies for all shareholders and managers
- Copy of the UAE residence visa (if required)
- NOC from current UAE residence visa sponsor
- Three Name choice for company name reservation
- If a corporate entity becomes a shareholder, the business owner will also have to submit the below documentation.
- Certificate of incorporation
- MOA/AOA of the company
- Board of resolution of the company
- Appointment of manager in proposed company
- All above documents must be notarized in the country of origin and get attested in UAE Embassy of that country.
How does LLC Company Formation in Dubai Works?
Entrepreneurs who choose to start their LLCs can enjoy various advantages. However, the process is time-consuming. Investors have to get in touch with various departments and also prepare various documents, making it a lengthy and comprehensive process.
Here are the important steps that are required to carry out the whole procedure of LLC Company setup in Dubai.
- Step No. 1: Select a Name
Investors must choose the name of the organization and the types of activities that the LLC will practice.
- Step No. 2: Choose a Location
Another mandatory requirement after selecting the name of the organization is choosing the location. The place should be selected suiting according to the business type. The operations of the company must be carried out through a virtual or physical office/warehouse.
- Step No. 3: Choose Business Activity
For any company registration in Dubai choosing the right activity is very important. Get assistance from Avyanco Business Consultancy LLC to choose right business activity of the proposed company.
- Step No. 4: Submit All Documents to DED
After choosing name, activity and location submit all documents to DED to issue an approval for the same.
- Step No. 5: Process of Approval for Activities
In case you are planning to form a business that conducts specific activities, it will require approval from other relevant authorities.
- Step No. 6: Obtain Licenses
Once the relevant authorities approve the business activities, you can obtain a Memorandum of Association, Trade license, Tenancy agreement, Share certificates, Labor cards, Visas, Certificate of Incorporation, and other legal documents from the authorities.
How to Start an LLC Company in Dubai?
Starting a company in Dubai is a daunting process. Below time-consuming steps are required in its formation:
- Registration of the company in Dubai with the Department of Economic Development
- Combining and authenticating the Memorandum and Articles of Association of the company
- Ensuring submission of all the required documents and business license application forms with the DED department
- Registering with the Dubai Commercial Register.
- Once the company is incorporated, get the employees registered with the relevant authorities
What is the Type of Business Licenses Available in an LLC Company?
Business owners must understand that a business license is mandatory to successfully form a business in Dubai. A business license is a corporate document that certifies a company’s legal status. These licenses also safeguard, organize, and categorize the firm’s legal cases. If you wish to trade lawfully, obtaining a business or trade license becomes obligatory. This certification ensures that your business activities are in line with the UAE’s Commercial Firms Act. Following are the types of licenses available for the LLC in Dubai.
- Commercial License
These types of licenses are granted to companies that are involved in different kinds of trade activities related to goods, services, and other commodities. Some of the activities that come under the category of commercial license include car rental, logistics, and real estate brokerage.
- Professional License
Such licenses permit business owners and companies to engage in a specialized field. With this trade license, individuals can form a business entity in which they are experts and have qualifications. Some common forms of activities that require a professional license include repair services, computer graphic design services, medical services, printing and publishing, beauty salons, artisanship, consultancy services, carpentry, security services, and many others.
- Industrial License
These forms of licenses are required for establishing manufacturing or industrial activity in the UAE. Business owners can assemble and process local or imported goods using raw materials with the help of this license. Those entrepreneurs who are planning to form an LLC of textile, food, petroleum products, paper, metals, and equipment and engines must obtain this industrial license.
- Agriculture License
Business owners who involve in cultivation activities such as trading of pesticides, harvesting of crops, installation of greenhouses and others are accountable to obtain an agricultural trade license.
- Tourism License
As the title implies, businesses that offer tourism activities such as tourist camps, hotel renting, restaurants, cruise boat rental, guest houses, and travel agencies must acquire this tourism trade license.
What is the Cost of LLC Company Formation in Dubai?
The process of forming an LLC in Dubai and anywhere in the world is high-priced. Multiple steps involve costs including business registration, investor visa, employment visa, opening up a corporate account, and other government fees and taxes.
LLC Company Registration Cost in Dubai
The cost of company registration in Dubai is between AED 25,000 – AED 27,000. The fee varies based on the industry type and services.
Investors Visa Cost for a Dubai LLC Company
The investor visa costs between AED 4500 to AED 5250.
Employment visa cost for an LLC Company in Dubai
The fee for issuing employee visa are in between AED 5000 to AED 7000 depending on type of business and category of employee.
FAQs About LLC Company Formation in Dubai
How to Get an LLC Company license in Dubai?
Individuals need to submit the required documentation and pay the fee to obtain their license from the Department of Economic Development (DED).
How to Register an LLC Company?
Draft and notarize your company’s Memorandum and Articles of Association to register an LLC company in Dubai. Along with this, submit all the documents and business license application forms with the DED to successfully obtain it.
What is the Minimum Capital for a Dubai LLC Company?
There is no minimum capital requirement for forming a LLC company in Dubai however authorized capital must be AED 100,000/- minimum.
How Long Does it Take to Start an LLC in Dubai?
Setting up a business especially LLC takes up to 4 to 5 working days. However, the process can be lengthier due to several factors, let alone certifications approval from the authorities.
How Many Members Have to Be in LLC Company in Dubai?
Minimum 1 shareholder and maximum 100 shareholders will be possible under LLC company.
Is a UAE National Shareholder Required to Form an LLC Company?
No, as per the new amendment of law no 2 of 2015 of commercial companies law UAE national us not required for setting up LLC company in Dubai.