Companies in the UAE (except for Free Zones) can be formed only with the participation of a citizen of the UAE, acting as a partner with 51 percent of the shares of the company (LLC), or a service agent, not owning shares in the company, but representing the company’s interests at the Government institutions (professional company). For such companies, the law does not prescribe the size of the share capital, the audit reports are not mandatory, and the commercial activity is permitted throughout the UAE. It should be noted that some types of activity can only be registered in the UAE and are not licensed in Free Zones (retail, catering, financial and insurance activities, repair and rental of cars, architecture and engineering, healthcare and beauty services, etc.). Depending on the activity, the following two types of licenses are recognized:
- commercial activity with the right to trade and manufacture.
- professional activity with the right to provide services.
Participation of a local partner with 51 per cent of the shares is a distinctive feature of a commercial company in the UAE (LLC). It is necessary to conclude a co-ownership agreement with a UAE citizen in order to open a limited liability company (LLC). In accordance with this agreement, 51 percent of the company shares must be owned by a local partner. However, according to the general rule, a supplementary agreement stating that the local partner waives any claim towards the ownership and management of companies, as well as any right to assume profits from its activities, is signed in addition to the memorandum of association. In return, the local partner receives a pre-agreed fixed annual remuneration. If you are planning to provide services in the UAE (outside free zones), then you need to obtain a professional license. Companies with professional license can be 100% owned by foreign investors, provided they use the services of a local service agent. The agent does not take part in the activities of the company, but represents its interests at the Government institutions (Ministry of Immigration, Labor, etc.).
Just by choosing the right legal form, you will be able to successfully conduct business activities in the UAE. The process of registration of a company, obtaining the necessary permits and dealing with other formalities can be significantly simplified if you turn to the services of ADQF Consulting. Armed with extensive professional experience and knowledge of the local economic environment, our consultants will help you register a company with different Government authorities, open a bank account and process residence visa for you and your employees in a timely and legally competent manner. Our company in Dubai will not only help you establish your business, but will also provide administrative and advisory support in the process of its formation and development.