Limited liability companies are the most common kinds of business entities registered in Dubai by foreign investors as this is the only choice to grant them full ownership. Limited liability companies in Dubai enable foreign residents to own 49 percent of their shares, while a local sponsor or partner must raise 51 percent. A limited liability company in Dubai’s incorporation procedure is quite easy requiring a few phases to be finished. Another benefit of the limited liability company in Dubai is that for any business purpose it can be registered.
Requirements for the registration of a limited company in Dubai
There are other requirements in addition to the shareholding structure to set up a limited liability company in Dubai. The business must include at least two shareholders and a maximum of 50. There are no minimum requirements for share capital to register a limited liability company in Dubai, except for the Department of Economic Development (DED)’s adequate capital test. In this case, DED decides whether the capital that the founders have subscribed is sufficient for the undertakings which they intend. Another requirement for a Dubai limited liability company is the managerial ones. The business has to have between one and five managers under the Dubai Company Act.
Steps to register a Dubai limited liability company
There are five steps to follow when registering a limited liability company in Dubai. These are:
- The reservation of the company with the Department of Economic Development,
- Drafting and notarizing the company’s Memorandum and Articles of Association,
- Submit the documents and business license application form with the Department of Economic Development,
- Registration with the Dubai Commercial Register.
The benefits of a limited liability company in Dubai
- It has correspondents in most countries in the world, therefore it is a popular business form;
- It offers access to all industries in Dubai and the UAE, for those interested in starting a business here;
- Any type of business license can be obtained by registering a limited liability company;
- When setup in Dubai free zone, the limited liability company will offer full ownership to a foreign investor;
- There are no share capital requirements related to opening an onshore limited liability company;
- It is easy to register and to open a local bank account for, however, a local agent must be appointed for the incorporation procedure.
The uses of a Dubai limited liability company
The limited liability company is a very versatile business form, foreign investors being allowed to use it for various purposes. The Dubai limited liability company can take one of the following forms:
- That of an onshore private limited liability company used for commercial purposes within Dubai;
- That of an offshore company which is registered in Dubai for trading activities outside the Emirate;
- That of a public company – joint stock companies are also registered as limited liability companies in Dubai;
- That of a free zone company – the registration requirements of a free zone limited liability company depends on the free zone in which it is incorporated;
- That of a subsidiary company – foreign companies can set up subsidiaries under the form of Dubai limited liability companies.