How to Set up the LLC Company Formation in Dubai

LLC company formation in Dubai

Table of Contents

In this article, we will fully describe How to set up an LLC company formation in Dubai in 2022.

Undeniably, the United Arab Emirates offers a wide range of facilities and perks, attracting foreign investors to set up an LLC company in Dubai. It also provides state-of-the-art infrastructure and a business environment for everyone to fulfill their ambitions. One of the vital aspects one needs to consider for LLC company formation in Dubai is the kind of legal entity he wishes to establish. He also needs to decide on the type of business activities he wants to conduct.

There are several types of business structures. One needs to select the most suitable one according to the product, strategic objectives, location, and internal framework while deciding about the business setup services in Dubai.

Following are the three main types of company formations in Dubai-

  1. Mainland Company Formation,
  2. Offshore Company Formation
  3. Free Zone Company Formation.

A large number of entrepreneurs have gone for the LLC company Formation in Dubai for their business as it has potential benefits and very few risks associated. Also, an LLC Company is the standard type of Mainland Company formation in the UAE. You can also form a Free Zone Company (FZC), which is a limited liability company.


What is a Limited Liability Company?

Salient features of an LLC Company


The limited liability company is preferred by many businessmen, and therefore, it is one of the widest set up entities. The limited liability companies are the ones where the liability of owners or partners is limited up to their shares in the capital.

An LLC company in Dubai has features of both corporate and partnership firms and provides advantages for both types of entities.

The limited liability company was launched in 1977, and it is considered relatively new compared to other company formation types.

As the company members are not personally liable if any loss occurs, it has gained its popularity in recent decades as it addresses numerous concerns of entrepreneurs and provides benefits that are unique to this type of entity.

LLC company formation in Dubai lets a foreign citizen own 49% of the total shares, and local citizens hold 51% ownership and can be a local sponsor for your company. However, if you set up a Freezone company setup in Dubai, then it supports 100% foreign ownership. The procedure of a Limited Liability Company may take some time, but it is quite simple, consisting only of a few steps.


LLC company formation in Dubai

Why Setup the LLC Company Formation in Dubai

LLC Company Formation Benefits


There are several business structures. Thus, the question arises of why forming an LLC Company in Dubai is the most suitable one? There are a large number of benefits that a mainland company formation in Dubai provides as compared to others:

  • If you set up an LLC Company formation in Dubai, then the company partners are safe from personal liability. If any loss occurs, they don’t need to pay for it from personal assets like real estate, automobiles, etc. They will only need to pay according to their respective shares in the company.
  • The paperwork required for LLC companies is comparatively lesser. Therefore, it makes it easier to start an LLC company in Dubai and maintain it. Legal compliance also becomes facile.
  • Lastly, in an LLC company formation in Dubai, you can have two to fifty shareholders, which eases the funding and functioning of the company. The shareholders can be individuals or corporations.
  • There is no restriction on the visas required for your company.
  • LLC has permission to conduct any of the activities, including the ones such as insurance, banking, etc. Therefore, you can obtain licenses for most business activities.
  • There are no restrictions on the number of branches you can have in the UAE. You can even set branches in any of the free zones.
  • A company can own real estate without ownership restrictions.
  • Lastly, the people investing in your company enjoy an investor’s visa, which provides them an option of 100% repatriation without any corporate tax.

How to Setup the LLC Company Formation in UAE

LLC Company Formation: Step by Step Procedures


The formation of an LLC company in Dubai is a step-by-step process that requires visiting various departments and submitting the required documents. The following steps will answer your question about how to set up an LLC Company formation in Dubai for a Mainland Company formation, Offshore company formation and for a free zone company formation.

  • The first task is to decide on a suitable name with which you wish to start the business. You also need to decide on the business activities in which your company is going to get involved.
  • As per your business type, activities, and needs, you need to select a suitable location in Dubai.
  • Lastly, it is essential to have an agreement between the company partners and the local sponsor, who owns 51% of the company shares.
  • All the required documents should be collected and then submitted to the Department of Economic Development (DED Dubai) with a filled application.
  • As a business conducts specific activities, permits and licenses are required to be taken from the respective departments.
  • Lastly, one needs to obtain a trade license, tenancy agreement, labor cards, MOA (Memorandum of Association), certificate of incorporation, and visas from relevant authorities.

LLC company formation in Dubai

Corporate Shareholder Model

Business Setup in Dubai


This model is functional in the UAE mainland, where the company owner can have 49% of the ownership, and the rest 51% lies in the hands of a local sponsor.

A risk mitigation document is prepared to ensure that all the management control, day-to-day activities of the business, and financial decisions remain with the foreign investor. The local sponsor will be paid a fixed annual fee for sponsorship. Significantly, this annual fee doesn’t vary with the company’s change in profitability or turnover. The company formation firms such as N R Doshi and Partners can find sponsors for you.

This model is not required to Setup LLC Company formation in Dubai for professional services such as a doctor, artists, etc. and for representative offices as these foreigners get 100% foreign ownership


Documents Required for an LLC Company Formation in Dubai

Be ready with these Documents to form LLC in Dubai


The Department of Economic Development (DED) requires the submission of a number of documents for starting an LLC Company in the UAE. Also, the departments need the partners to submit documents as per the business activities.

Attestation of the required documents and notarized from the applicants’ home nation and the UAE consulate is necessary. However, this process is time-consuming and must be conducted just after the name and business activities are decided. Following is the list of documents that one needs to submit to set up an LLC Company formation in Dubai:

  • Firstly, LLC company formation registration application form
  • Secondly, passport copies of partners, managers, and shareholders of the company
  • Thirdly, Sponsor’s passport copy
  • Fourthly, NOC from the sponsor is required
  • Lastly, the Memorandum of Association (MOA) (Should be attested by the public notary)
  • Firstly, initial approval provided by DED
  • Secondly, the Trade Name Registration form
  • Thirdly, the location of the office and tenancy contracted attested by DMPD (Dubai Municipality’s Planning Department) and CDF (Civil Defence Department)
  • Lastly, each shareholder’s bank reference holder

LLC license cost in Dubai

FAQs

Limited Liability Company Formation in Dubai


1. How many shareholders are required to set up an LLC Company Formation in Dubai?

At least there must be two shareholders for starting an LLC company in Dubai Mainland.

2. How many shareholders are required for starting an LLC company in Dubai Free zones?

Free Zone Company can be started with just one shareholder.

3. What percentage of equity do I need to part with the local sponsor?

Talking of LLC in UAE, the local sponsor owns 51% of the total company shares.

4. What would be the cost of company formation in Dubai?

The total cost of the company formation varies as per the industry and your business activities. The license fees change according to the industry. The cost may change as per the location, visa requirements, as well as the fact whether you wish to setup a company in the free zone or mainland.

5. Is it necessary to have a registered agent for company formation?

No, if you want to Setup LLC Company in Dubai, then the process doesn’t necessarily need to be carried out with the help of a registered agent. However, looking at the foreign restrictions and government regulations, it is suggested to have a reliable firm by your side for company formation. They will guide you through the licensing, sponsorship, and throughout the process.

6. What are the license types an LLC can hold?

An LLC can operate as per these three licenses:
Commercial- It covers all the trade-related activities
Professional- It covers professional services such as a clinic, crafts, etc.
Lastly, Industrial- It covers manufacturing and industrial activities.

7. What are the tax benefits that an LLC offers?

LLC in the UAE enjoys getting a tax residence certificate from the Ministry of Economy, UAE. LLC Companies in Dubai are allowed to conduct trade activities in all parts of the UAE and in other GCC countries.

8. What is the procedure for LLC Company Liquidation?

Following is the process for Limited Liability Company:
Serving a dissolution notice and appointing a liquidator
It includes submission of registration and licensing application form, submission of official document for dissolution of the company, notarized minutes of the company meeting, as well as a notice of the appointment of a liquidator.
Moreover, submission of the license copy of the liquidator, auditor’s license and registration certificate, letter of acceptance by the liquidator, and registration certificate.
The company also needs to give advertisements to this effect in English and Arabic newspapers.
Getting licenses canceled and canceling the commercial registration
This process involves the submission of various documents such as the final account of liquidation, cancellation of establishment card, cancellation of visa, NOC issued by the ministry of labor, newspaper advertisement copy submission, partner letter. It further includes business activity-specific approvals from Government bodies if applicable.



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