All mainland (onshore) UAE legal entities are required to be licensed by the Department of Economic Development (DED) and governed by the UAE Commercial Companies Law (CCL). The main advantage for foreign investors establishing a business in mainland UAE is that, unlike the Free Zones, there is no territorial restriction on business activities or the location of offices/premises. A mainland company therefore has the freedom to trade anywhere in the UAE or wider Gulf Cooperation Council (GCC) states, including all the Free Zones, and will have a far wider range of real estate options from which to choose.
According to company law, a mainland company requires a local partner or a local service agent. Smart Ezone provides a list of validated local sponsors with established contacts in the market.
Limited Liability Company (LLC):
The standard type of company in the UAE mainland is the Limited Liability Company (LLC). The DED is the government body authorized to issue all licenses for LLCs and is responsible for classifying and regulating the types of economic activity that may be undertaken.
An LLC is not restricted on where it can trade in the UAE (unlike Free Zone Companies) or GCC; furthermore, there is no restriction on real estate ownership, or on the number of visas that can be obtained. There are no minimum share capital requirements. A mainland company is not required to pay the standard 5% customs duty on imported goods.
UAE Foreign Ownership:
The principle limitation for foreign investors setting up an LLC is the UAE foreign ownership restrictions. When setting up an LLC, the CCL prescribes that at least 51% of shares must be registered to a UAE/GCC national sponsor (either a UAE/GCC national individual or a corporate entity 100% owned by UAE/GCC nationals), often referred to as a local partner.
If your business requires you to trade on the UAE mainland with local companies then you will need a DED-licensed company and this will require a local partner. Many foreign investors are concerned by the foreign ownership restrictions and uncomfortable about relinquishing control of their company to a local partner. To allay these concerns, Smart Ezone has created a “corporate shareholder” model that allows clients to effectively maintain 100% ownership control of their business while remaining in full compliance with UAE companies law.
Legal Structures we offer:
Sole ProprietorshipA Sole Proprietorship is a business owned by an individual, not a company. This person will own 100% of the business, control all of its operations and keep 100% of any profits. He or she will also be 100% responsible for business debts and any other financial obligations.
One Person Company (LLC)The one-person limited liability company is owned by one natural or one corporate body. This company is different than the other forms that require having two parties at least to sign a contract. The one-person company consists of one person only. It is similar to the sole-proprietorship but they differ in some provisions, the most important of which is that its liability is limited to the single partner’s share whereas in the sole-proprietorship the liability is unlimited.
Civil CompanyA Civil Company is a business partnership for professionals in recognized fields such as doctors, lawyers, engineers and accountants.A Civil Company can be owned by professional partners of any nationality. If the owner is a National of a country other than the UAE or GCC, they require a Local Service Agent (LSA).A foreign company can be a partner in a Civil Company, as long as the foreign company is in the same profession as the civil company.A civil company for engineering must have one partner who is a UAE National, who owns no less than 51% of the business and must be an engineer of the same type as the business’s activity.A civil company can practice consultancy activities but must be 100% owned by professional partners of the same type as the business’s activity.
Limited Liability CompanyA Limited Liability Company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC must have between 2-50 shareholders, each of whom is liable only to the extent of his or her share in the capital of the company. With the exception of public shareholding company, an LLC can be changed to any other legal form.
Main Land activities:
DED-related activities:Business activities of firms that can’t take a limited liability company as a legal form. Business activities of firms that can take either a sole proprietorship or a civil works company as legal form.Business activities of firms whose parties (owners / partners / managers) should be holding a university degree or having an equivalent experience in the required consultation activity.Foreign companies interested in the consultations activity whose director should have a degree or an experience in the same field.
Dubai Municipality-related engineering activities:Include engineering activities only.Business activities of firms that can’t take a limited liability company as a legal form.Business activities of firms that can take either a sole proprietorship or a civil works company as legal form.Business activities of firms whose parties (owners/ partners/ managers) should be holding a university degree or having an equivalent experience in the required consultation activity.A local service agent agreement is not required for the engineering activities.The foreign engineering consultancy offices can open branches without having to appoint a corporate agent.
Legal consultations activities:Should receive an approval from Legal Affairs Department before obtaining the initial approval and the trade name from DED.The foreign legal consultation offices can open branches without having to appoint a corporate agent.There are other consultancy activities that are subject to the approval of governmental bodies.The consultancy activities can have any legal form but only after the approval of the bodies governing the activity.
Smart Ezone Corporate Shareholder Model:Smart Ezone Corporate Services has created a number of 100% UAE-owned LLCs – e.g. a Smart Ezone Corporate Shareholder LLC – that it fully manages and controls either by 100% sole ownership with Local service agentor through power of attorneys and other legal agreements. These companies can act as the 51% local partner and, through a suite of risk mitigation documentation, pass all management control, financial control and the day-to-day running of the business back to the 49% shareholder in return for a “Fixed Annual Sponsorship Fee”.
Steps to setting up an LLC:
Advantages of setting up an LLC in Dubai/UAE:• The liability of the shareholders is limited to their shares in the company’s capital; • An LLC may conduct any type of activity except for insurance, banking or investment; • An LLC can legally trade anywhere in the UAE, including the Free Zones; • 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.
Requirements:• Certified passport copies for all shareholders and managers • Copy of the UAE residence visa, if applicable • No Objection Certificate (NOC) from current UAE residence visa sponsor • Certified proofs of address for each shareholder • CV for each shareholder • Professional / bank reference letter for each shareholder If the shareholder is to be a corporate entity, the required documentation will include: • Memorandum and articles of company • A board resolution agreeing to incorporate a new LLC in UAE • A power of attorney (POA) to the general manager to incorporate the new LLC The required documentation will vary greatly depending on the type of business activity, legal entity, type of shareholder, and the area in which you set up. Contact us so we will advise you on the full list of documents required to establish your company.
Family residency visas:
Dubai LLC Formation - FAQs
• Commercial – covering all kinds of trading activity;
• Professional – covering professions, services and crafts;
• Industrial – covering industrial or manufacturing activities.