Dubai is a global business hub and a popular destination for entrepreneurs and investors looking to set up a company. Dubai offers several company formation options, each with its own benefits and requirements. In this guide, we will provide an overview of the different types of companies in Dubai and the process for company formation.
free Zone Company (FZC)
A Free Zone Company (FZC) is a type of company that can be set up in one of Dubai’s many free zones. These zones offer 100% ownership to foreign investors, as well as tax and customs duty exemptions. FZCs are subject to the rules and regulations of the free zone where they are established.
To set up an FZC, investors must choose a free zone and submit an application to the relevant authority. The application must include details of the company’s proposed activities, share capital, and other requirements. Usually, it takes a few weeks to finish the procedure.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a type of company that can be set up anywhere in Dubai. LLCs require at least two shareholders and a minimum share capital of AED 300,000. Shareholders can be individuals or companies, and they are liable for the company’s debts only to the extent of their share capital.
Investors must first get a business license from the Dubai Department of Economic Development (DED) before they can set up an LLC. The company’s Memorandum of Association (MOA) and Articles of Association (AOA) must also be sent in Usually, it takes a few weeks to finish the procedure.
Branch of a Foreign Company
A branch of a foreign company is a type of company that can be set up in Dubai by a foreign company. The branch is not considered a separate legal entity from the parent company, and it must have the same name as the parent company. Branches are subject to the rules and regulations of the Dubai Economic Department.
Investors must get a trade license from the Dubai Economic Department and show proof that the parent company is registered in its home country in order to set up a branch.The process usually takes a few weeks to complete.
Sole Proprietorship
A sole proprietorship is a type of company that is owned and operated by a single individual. The individual is personally responsible for the company’s debts and liabilities. Sole proprietorships are subject to the rules and regulations of the Dubai Economic Department.
To set up a sole proprietorship, investors must obtain a trade license from the Dubai Economic Department and provide proof of their identity and residency Usually, it takes a few weeks to finish the procedure.
Partnership
A partnership is a type of company that is owned and operated by two or more individuals. Partnerships are subject to the rules and regulations of the Dubai Economic Department.
To set up a partnership, investors must obtain a trade license from the Dubai Economic Department and submit a partnership agreement. The agreement should include details of the partners’ capital contributions, profit sharing, and other important details. Usually, it takes a few weeks to finish the procedure.
Dubai's company formation process typically involves the following steps:
✔️ Choose a Business setup and Company Name: The first step in the process of Dubai company formation is to decide on your business activity and company name. You will need to make sure that your business is legal in Dubai and that the name you
want for your company is available.
✔️ Choose a Company Type: You will also need to decide on the type of company you wish to form, such as a Free Zone Company, a Limited Liability Company (LLC), or a Branch of a Foreign Company.
✔️ Get initial approval: Once you have chosen your business activity, company name, and company type, you need to get initial approval from the Department of Economic Development (DED) in Dubai. You will need to send the DED your business plan, the name you want for your business, and any other required Certificate attestation.
✔️ Rehttps://uaeattestation.ae/serve Your Trade Name: After getting initial approval, you will need to reserve your trade name with the DED.
✔️Prepare the Memorandum of Association (MOA) and Local Service Agent (LSA) Agreement: The next step is to prepare the Memorandum of Association (MOA) and Local Service Agent (LSA) agreement. The MOA is a legal document that outlines the company’s activities, capital, and ownership structure. The LSA agreement is required for companies formed outside of a Free Zone and designates a local resident or a
company as the LSA.
✔️ Obtain License and Approvals: After completing the MOA and LSA agreement, you will need to obtain your business license from the DED and any other relevant approvals required for your business activity.
✔️ Open a Corporate Bank Account: Once you have obtained your business license and approvals, you will need to open a corporate bank account in Dubai.
✔️ Obtain Visas: If you plan to hire employees or reside in Dubai, you will need to obtain the necessary visas and permits.
Dubai offers various types of company formations, such as a Free Zone Company, a Limited Liability Company (LLC), a Branch of a Foreign Company, a Sole Proprietorship, and a Partnership. The process of company formation in Dubai involves several steps, including choosing a business activity and company name, selecting a company type, obtaining initial approval, reserving a trade name, preparing the MOA and LSA agreements, obtaining licenses and approvals, opening a corporate bank account, and obtaining visas. It’s recommended that you seek the assistance of a professional company formation agent or consultant to ensure that all requirements are met and the process is completed smoothly.
