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Mainland Company
The United Arab Emirates is comprised of seven unique Emirates: Abu Dhabi, the capital; Dubai, the most renowned; Sharjah; Ras Al Khaimah; Fujeirah; Um Al Quain; and Al Ain. Each Emirates has its own Economic Department responsible for company registration. Dubai, being the most popular, sets the standard for registration processes and modern business practices in the UAE.
There is an opportunity to register five different types of companies under the Dubai Economic Development.
1.Sole Establishments
Sole Establishment in Dubai refers to a business owned and controlled by a single individual, regardless of nationality. It's common for freelancers and professionals. The Establishment is required to designate at least one manager, who may also be the owner. if owned entirely by a foreign national, a UAE national must be registered as the establishment's agent. This type of company lacks a Memorandum of Association, shares, or limited liability for the owner, who is personally responsible for any debts or liabilities incurred by the business. This direct link between the individual and the business's financial obligations distinguishes Sole Establishments from other business structures.
2. Limited liability companies
Limited liability companies operate similarly to limited companies globally. They can have up to 50 shareholders, including individuals and entities. Typically, a UAE national must own at least 51% of shares for most activities, with exceptions like law offices or audit firms. The Dubai Courts notarize the Memorandum and Articles of Association, submitted to the DED for approval, and upon incorporation, a license is issued. The company must appoint at least one manager, with the option to appoint up to 11, all registered under the company's license. Limited liability companies often have restrictions on the types of activities they can engage in, varying by emirate.
3. Civil Company
A civil company functions as a business partnership, owned by two or more partners engaged in civil partnerships like consulting firms or beauty salons. Typically it operates in the construction and infrastructure sector. Even if established by foreign nationals, a UAE national must be appointed as the agent of the civil company. Unlike traditional shares, this type of company allocates percentages to its partners, and a memorandum outlines its structure.
4. Branch of a Foreign company
Establishing activities for existing corporates in different jurisdictions or newcomers to the UAE is a widely chosen option. While it allows for 100% ownership, a UAE national must serve as the company's agent. Unlike a separate entity, this setup remains an integral part of the mother company's operations. The branch needs VAT registration if it exceeds the annual threshold of 350,000 AED. Setting up a foreign company branch incurs an additional cost of around 3,000 USD, covering the legalization of various documents in the mother company's country of origin and the UAE Embassy.
5. Other types of entities that can be incorporated in Dubai and the other Emirates:
• Branch of Freezone Company or Brannches of Companies based in other Emirates allow unrestricted trading on the mainland while maintaining full foreign ownership.
• DED Trader licenses individuals on social platforms like Instagram and Facebook for trading.
• Representative office is suitable for foreign companies promoting products, but any transactions must involve the foreign company.
• Limited Partnership involves partners being separately or jointly liable for the company's liabilities.
• Private Joint Stock company – contact us for more information.
6. Documents required to set up an entity in Dubai:
• Copy of shareholders and managers’ passports
• Copy of applicant residence permit or visa if applicable
• No Objection letter from the company that has issued the visa permit to the applicant
• Company’s articles if applicable
• Letter of Authorization from managing director or shareholders or POA
• Copy of parent companies incorporation certificate and MoA legalised in the country of origin.
7. Cancellation process/Liquidation
Once a license is canceled, it's a done deal – no turning back, no reactivation. All legal forms needs to submitted the following required documents:
• Required completed form
• Copy of License
• Cancellation of labour card and immigration card
• Signatures of shareholders and UAE national partner/agent
• FTA approval if the company was VAT registered
• Other government authority approval may apply for certain licenses.
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