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Limited Liability Companies

llc company formation in dubai

Limited Liability Companies

Of all the forms of companies that can be established in the UAE, as provided for in the Federal Law, Limited Liability Company is the most common and easy to establish form. Also known as a company with limited liability, it is a flexible type of enterprise that amalgamates the features of a partnership and corporate structure.

The rules defining LLC company formation UAE as well as the steps involved are comparatively simple. According to the general rule for LLC company formation in Dubai and other six Emirates, it can be formed by a minimum of two and a maximum of fifty people whose liability shall be limited to their shares in the company’s capital. Furthermore, being a flexible form of company, differential profit sharing arrangement is also possible in an LLC. The company must have 51% participation from a UAE national while the rest 49% can remain with the investor.

Hence, the formal shareholding pattern for an LLC is as follows:

  • Local Partner (UAE sponsor) – 51%
  • Foreign Shareholder(s) – 49%

Moreover, either the UAE national or the foreign partner must be granted the authority of managing the operations of the organization.

Capital requirement for a LLC company formation

At present, the minimum capital requirement for a LLC company formation UAE is 300 thousand dirhams which can be in cash or in kind. It is also important to note that the capital must be divided into equal shares with the value of each not being less than thousand dirhams. Furthermore, as stipulated in the Companies Law, LLC can engage in any kind of business activity except to activities relating to banking, money investing on behalf of others and insurance.

 

LLCs in Dubai

Forming a LLC in Dubai gives foreign investors a host of advantages, thus making LLC the most popular of the legal forms of entry to Dubai. Though the foreign equity of the company cannot exceed 49 %, but the profit and the losses incurred in the operations are shared in a ratio that is different than that of the share capital ratios, and the day to day activities can easily be undertaken by the foreign venture without the interference of the local UAE partner.

The formation of an LLC offers the entrepreneurs access to the wider UAE economy along with the Dubai market, and is 100 % tax free. Dubai also offers an investor’s status to the partners in the company and they can also bring along their families, obtaining visas for which is an easy process.

What are the benefits of a LLC company formation ?

A limited liability company in UAE offers seamless access to the wider Emirates economies. The following are benefits of establishing LLC in UAE: –

  • 100% tax free
  • 49% of foreign ownership. However, the profits and losses can be shared in a ratio different from shared capital
  • 100% repatriation of profits and capital
  • Investor becomes partner in the company
  • Liberal bank account opening and maintaining
  • Easy to open global corporate bank accounts
  • The investor can commence branches
  • The company is eligible to hold limitless offices or properties in UAE
  • LLC offers UAE residence visa to the investors

How to form LLC in Dubai?

In order to establish a LLC in Dubai, six basic steps must be followed: –

  1. Choose a company name which will be used to conduct business activities and apply for an approval from the Licensing Department of the Emirates you plan to setup a company in.
  2. Frame a Memorandum of Association (MoA) of the company and duly get it attested by a Notary Public.
  3. Get an approval of the Economic Department along with the entry in the Commercial Register.
  4. Once the approval has been granted, a formal entry of the company is made in the Company Register followed by publication of company’s MoA in the Bulletin of the Economy and Commerce Ministry.
  5. A license is then issued by the Economic Department to the company.
  6. Finally, the company is registered with the authorized industry and commerce department.

What Aon offers?

At Aon Management Consultants, we offer the most comprehensive LLC formation and consultation in Dubai. Our services include: –

  • Identifying a local UAE national as sponsor
  • Assisting in identifying suitable office space
  • Securing all the approvals and incorporation procedures
  • Providing assistance in opening bank accounts
  • Offering full spectrum support service
  • Helping in arranging residence visa for the investor

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