What is a Dubai LLC

The Limited Liability Company (LLC) is by far the most popular type of business formation in the United Arab Emirates. Foreign investors who take time to understand the benefits of a Dubai LLC and learn about the business-friendly environment in Dubai are starting many new businesses in the region. Starting a business in the Dubai opens the entire UAE market and establishes a regional presence that allows access to an even broader marketplace. The process is not nearly as intimidating as it may initially appear. There are many local service providers prepared to do most of the footwork for the business start-up. These organizations interact with the local authorities to obtain required documents and to make sure the business formation moves forward in a quick and effective manner. Restrictions are minimal and ownership requirements do not impact business operations. The list of required documents for establishing a LLC in Dubai is easily managed, especially with assistance from a qualified local agent*. The UAE is politically and economically stable with a very low crime rate. Dubai has modern roads, first class airports, quality infrastructure and supportive government services to make doing business in the area safe, easy and profitable.

Business Environment in Dubai

London’s Global Financial Centre’s Index rates Dubai as having the most developed financial services industry in the region. UAE banks are very well capitalized and provide a wide range of financing options and services for private businesses in the region.

The UAE is recognized as a regional leader in the protection of intellectual property rights. Enforcement of trademark, copyright, and patent laws is constantly evolving to keep up with technology changes and sophisticated criminal activities.

Dubai enjoys a reputation as a wealth generator and investment stronghold. It has been recognized as the Middle East’s most desirable location for regional headquarters of multinational companies.

UAE is a member of the World Trade Organization and constantly strives to reduce the complications of foreign investment. Starting a business in Dubai has never been easier. Business formation and licensing are sanctioned by the Department of Economic Development (DED).

The three goals of the Department of Economic Department are:

1. Contributing to achieve Dubai Government’s vision and developing the different economic sectors.
2. Prepare a competitive investment environment to attract local and foreign investment and organizing the business sector according to best practices.
3. Provide the best human, financial and technical resource and supportive environment for creativity and excellence.

Source: http://dubai.ae/en/Lists/GovernmentDepartments/DispForm.aspx

Benefits of forming LLC (Limited Liability Company) in Dubai

Real benefits of LLC company setup in Dubai greatly outweigh any perceived restrictions:
• The Limited Liability Company does not offer public shares. This assures the investors and local partners will always have complete control over business activities.
• Unrivaled access to the UAE marketplace and regional markets
• An LLC separates the investors’ personal assets from the company liabilities.
• The profit and loss from the company can be shared in a ratio different from the share capital. This means that although foreign ownership is limited to 49%, the profits can be shared differently among the partners. The local partner can be paid percentage of profits, a percentage of sales or a fixed annual fee. This is established in the sponsorship agreement you sign with the local partner.
• The foreign investors and their families get the privileges of investor visas
• The investor is a partner in the company with no interference from local partner over daily business activities
• There are few restrictions on business activities. Only banking, insurance and third-party investing are restricted.
• Easy access to both local and global bank accounts
• Once an LLC is established branches of the business are allowed
• Capital and assets of the company are in the name of the company and not in the name of a local partner

Recent changes in business formation regulations are reducing the minimum capital investment required. You local agent (Push Digits) will have the most up to date information.

The Restrictions and Requirements of Dubai LLC:

• A UAE national acting as local sponsor (partner) must hold 51% of shares. The managing authority is assignable to the foreign investor or the local partner. The actual participation of the local partner in profits and business operation is established with a properly notarized and approved contract. Many Dubai Limited Liability Companies use the local UAE sponsor as a “silent partner” that is paid an annual “sponsorship fee” in return for releasing control of the company to the foreign investor.
• Business activities in banking, insurance and third party investment are not allowed
• Minimum of two partners and a maximum of fifty partners/shareholders
• Between one and five managers are required. These managers can be from registered partners or can be other individuals. The manager(s) is/are appointed in the Memorandum of Association or by a General Assembly of the Partners.
• Appointed managers have full powers of administration. Actions and decisions are binding on the business and may override conditions established in the business’s contracts.

The step-by-step process of LLC (Limited Liability Company) formation in Dubai is relatively straightforward:
1. Register a Trade name. We (Push Digits) will get this done for you.
2. File a license application with the Department of Economic Development (DED). We can get the license application and assist you in filling it out then submit it to DED.
3. Getting Pre-approval for business formation activities. We will get the approval for the business formation activities for you.
4. Creating a Memorandum of Association for the new business.
5. Getting the Memorandum of Association notarized. We will assist in creating the MOA and getting it properly notarized.
6. Leasing office space and getting the location approved by the planning Department. We can locate approved office space and get the required leasing documents for you.
7. Paying the license fees to the Department of Economic development and receiving the license. We can act on your behalf to pay the fees and receive your business license.

License fees

This is an example of the license fees for doing business in Dubai, the actual fees may vary and additional fees may be required for special activities:

* Market Fee is 5% of shop/office rent. Varies according to lease agreement
** For each expatriate partner. In case of double payment you can approach DED for refund after you are issued payment voucher

Required Documents for LLC formation in Dubai:

I. Required Documents for Getting the Initial Approval:(Step one)

• Proof of reserved trade name. You must apply for a trade name by submitting at least three options. When the authority approves your trade name you will receive proof of your registered trade name to submit along with your application for initial approval. Our consultants at Push Digits can manage this process for you
• Registration application. You must complete an application for business registration. We* can help you complete the form.
• Copy of applicant’s passport
• If the applicant is a UAE national a copy of naturalization identification is required
• Copy of manager/director’s passport
• If the applicant is a corporate entity (an existing business) – The Board of Directors of the existing company must provide a resolution stating the intention to form a LLC company in Dubai. This must be attested by the UAE embassy in the country of origin
• If a local agent is assisting in the process the agent must have a Power of attorney

II. After initial approval these documents are required to complete the LLC Formation:(Step two)

• Proof of initial approval for business formation activities (from step one)
• Power of attorney for local agent (from step one)
• Proof of reserved trade name (from step one)
• Registration application (from step one)
• Copy of applicant’s passport
• If the applicant is a UAE national a copy of naturalization identification is required.
• Copy of manager/director’s passport
• Lease documents for approved office space. A minimum office space is required. We* can locate the required space and obtain the lease documents for you.
• Copy of Memorandum of Association
• If the applicant is a corporate entity in UAE or another country notarized proof of company registration is required

Push Digits will manage the acquisition and submission of the required documents for you.

How Push Digits Will Help You

One of the many valuable services Push Digits offers is assistance with business formation in UAE and Dubai. Where a local partner or sponsor is required, we can locate qualified and powerful persons to act as your local partner and we can draft partnership agreements according to you needs. We can help you connect with the business authorities in the region to get required applications and approvals. We will make sure you have all required documents when and when they’re needed and that the documents are properly completed. We are familiar with the local culture and with the authorities and agencies involved so we can make the process as quick and painless as possible. After your Limited Liability Company is up and running we offer additional support to make your business life easier. Our services include accounting and financial services; financial projections; internal audits; preparation for external audits and a host of other valuable services. We push the digits for you, leaving you time for your core business and more time for your personal life.