- January 22, 2016
- Posted by: aon
- Category: Blog
The 6 steps to forming an LLC in UAE
A limited liability company – the name itself boasts of reduced liabilities, a boon for all entrepreneurs. Limited liability companies are the most common sort of foreign companies that you can find in Dubai. An LLC is recommended when the main purpose of your business is to make sales within the region of incorporation. An LLC in Dubai can be formed by a minimum of two and a maximum of 50 shareholders, and there liability is limited to the amount of their shares in the business capital. However, 100 per cent foreign ownership of an LLC is not permitted. Under the UAE Commercial Company Law, foreign investors can hold up to 49 per cent equity ownership in the company and at least 51 per cent of the equity has to be held at all times by one or more UAE nationals. But of course, being a flexible form of company, it is possible in an LLC to make different profit sharing arrangements between the partners, which help the foreign partner in the company to get a great edge.
There are a number of advantages and benefits for those who choose to set up an LLC in Dubai. A few of them are:
- In Dubai there is a 100% tax rebate on commercial ventures
- Even though foreign investments are limited to holding a 49% of the equity, the profits and losses can be shared in a ratio different from shared capital
- 100% repatriation of profits and capital
- Investors become partners in the company
- Liberal bank account opening and maintenance is allowed to investors
- Easy to open global corporate bank accounts
- The investor can commence branches of their business
- The company is eligible to hold limitless offices or properties in UAE
- LLC offers UAE residence visa to the investors
Even though you might be sure that an LLC in Dubai is exactly what you want to set up, there are also a number of other things that you need to take in consideration, like the fact that the minimum capital investment has to be at least 300,000 dirham. In order to set up an LLC in Abu Dhabi, there are six steps that you need to follow:
1. Determine the economic activity of the company: The requirements, fees and conditions differ with the type and nature of activity to be followed.
2. Determine the required legal form: The conditions, laws, and requirements on the legal forms differ according to the nature of the business.
3. Register the trade name: A trade name needs to be chosen for the facility that suits the nature of activity and its legal form.
4. Initial approval: After certification of trade name, the company requires initial approve, which entitles them to get approvals from concerned authorities.
5. Approvals of concerned authorities: After the initial approval has been obtained, you are entitled to approach concerned authorities for the required approvals after the fulfillment of the relevant terms and conditions.
6. Licensing: After obtaining the required approvals you may approach the Department of Economic Development, which after the completion of their requirements and the payment of the prescribed fees will provide you with the relevant licenses.
When it comes to LLC’s, these are the basic steps however, there are some economic activities that do not require any approvals other than that of the Department of Economic Development.