Limited Liability Company
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 authorised to issue all licences 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.
Steps to setting up an LLC:
1. Speak with one of Sovereign’s consultants who will advise on the correct legal structure based on the activities that a business intends to undertake in the UAE and its intended markets. A client may further choose to obtain a legal opinion to confirm Sovereign’s advice.
2. If a mainland (onshore) legal entity is the preferred option, then a UAE local partner will be required to hold 51% of the shares in the LLC. See the Sovereign Corporate Shareholder model above.
3. The required documentation will vary greatly depending on the type of business activity
4. All documents are required to be notarised and attested in both the applicant’s home country and at the relevant UAE consulate. The notarisation process should be commenced as early as possible because it can take a significant time.
5. 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.
6. All documents must also be translated into Arabic by an official translator before they can be presented to the authorities in the UAE.
7. All requested documents to be submitted to Sovereign, which will then manage the application process from start to finish.
What are the Advantages of setting up an LLC in Dubai?
1. The liability of the shareholders is limited to their shares in the company’s capital
2. An LLC may conduct any type of activity except for insurance, banking or investment
3. An LLC can legally trade anywhere in the UAE, including the Free Zones
4. No restrictions on the number of visas that can be obtained
5. No restrictions on the location where the company can rent/buy office premises
6. The government has permanently waived any paid-up capital requirements.
What is the Disadvantages of LLC formation Dubai?
Longer time to establish than a Free Zone company, typically 8 to 10 weeks
Does forming an LLC offer any tax benefits?
Yes. An LLC is permitted to trade anywhere within the UAE and GCC. An LLC can obtain a Tax Residence Certificate from the UAE Ministry of Economy.
AlQaisar Accounting Services helps you to invest in an LLC company setup in Dubai
Budding entrepreneurs and new-age investors want to be sure of their investment decisions. One mistake can cause unnecessary loss of resources and time.
