Company Formation in UAE Mainland

The UAE is not only one of the safest countries globally but also serves as a trading hub for the Middle East. It’s a tax haven, complete with a robust network of banks, making mainland UAE an ideal location for entrepreneurs looking to set up a company and bank account.

 

The Limited Liability Company (LLC) structure is a popular choice for businesses in the UAE mainland. A recent cabinet decision now allows full ownership, in selected industry sectors, for expatriates and eliminates the requirement for a local sponsor in those same sectors and business activities. This means investors can set up an LLC without a local sponsor, streamlining the process to establish a presence in the UAE’s mainland.

 

The recent changes made to the Federal Law No. 2 of 2015 on commercial companies, along with the amended Law No. 26 of 2020, apply to any entity engaged in commercial, financial, industrial, agricultural, real estate or any other form of economic activity on the mainland.
 
If an expat wishes to have 100% ownership in a mainland company, they must meet certain capital requirements and adhere to conditions established by the UAE Government’s Cabinet decision. The minimum share capital required for obtaining 100% ownership in a mainland (onshore) company in the UAE ranges from AED 2 million to AED 100 million, depending on the industry sector and business activity selected by the investor.

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Available Forms of Mainland Companies

SOLE
PROPRIETORSHIP

A Sole Proprietorship is a type of business owned by an individual, rather than a company. The owner has complete control over every aspect of the business and reaps all of the profits. However, this also means that they are solely responsible for the financial obligations and any other liabilities.

CIVIL
COMPANY

A Civil Company refers to a business partnership for professionals like doctors, lawyers, engineers, and accountants. By forming such associations, like-minded individuals can combine their skills and expertise to deliver better services to their clients.

ONE PERSON LIMITED LIABILITY COMPANY

The lone-member LLC stands apart from other forms because it has sole ownership by an individual or entity without requiring signatures from other parties. While similar to sole proprietorships in some aspects, they differ in several important provisions – chief among them, limited liability.

PRIVATE SHAREHOLDING COMPANY

A Private Shareholding Company (Private Joint-Stock Company) is a partnership of 2-200 people. A minimum capital of AED 5,000,000 must be invested by the partners in the business.

PUBLIC JOINT STOCK COMPANY (PJSC)

A Public Share Holding Company is a type of company in which the capital is divided into transferable shares of equal value.

LIMITED LIABILITY COMPANY

An LLC blends partnership flexibility with corporate structure, striking a balance that makes it a versatile enterprise. It requires a minimum of two and a maximum of fifty investors, each of whom assumes liability in proportion to their share in the firm's capital. With the exception of public shareholding companies, an LLC legally permits migration to any other form of business.

SIMPLE LIMITED PARTNERSHIP

A Simple Limited Partnership comprises at least two partners, with one playing the role of general partner and the other a limited partner. The liability of general partners extends to their full personal and business assets, while limited partners are only liable for the amount specified in their share of the company's capital. This structure offers a legal framework for businesses to operate and mitigate risk.

PARTNERSHIP
COMPANY

A Simple Limited Partnership involves a minimum of two partners - a general partner and a limited partner. The general partners bear responsibility for the company's liabilities up to the extent of their personal and business assets. Meanwhile, the limited partners are only liable for the share of company liabilities equal to their proportion of the company capital.

BRANCH OF A FOREIGN COMPANY

A Simple Limited Partnership is formed by two partners: a general and a limited one. The general partner is personally and fully liable for all of the liabilities of the company, using all personal and business assets. Conversely, the limited partner is accountable for a portion of the company's liabilities, with the share being commensurate with their investment.

REPRESENTATIVE
OFFICE

Representative Office for Commercial Activities is a way for branches to conduct business activities in the UAE. Limitations exist on conducting operations and financial commitments. A Local Service Agent is needed, which could be a UAE National or a company owned by at least one UAE National.

BRANCH OF DUBAI – BASED COMPANY

A branch of a Dubai-based company is required to perform one or all activities specified in the central business license. Alternatively, for companies with multiple branches, activities can vary provided they align with the activities authorised in the central business license.

BRANCH OF UAE- BASED COMPANY

Each branch of a UAE-based company must perform activities included in the primary company license. Multiple branches can engage in different activities as long as they are part of the initial license.

BRANCH OF A GCC- BASED COMPANY

Dubai branch licenses mandate that a GCC-based company’s branch must only conduct activities from the same group as those held by the main company license. For companies with numerous branches, each branch can perform different activities included in the main license. Other GCC countries may have unique guidelines.

BRANCH OF A FREE ZONE COMPANY

A branch of a company within a free zone can engage in commercial, industrial, and professional practices, provided that the parent company's activities are permitted in mainland Dubai. If your company's principal license was obtained from a UAE free zone (and not as a foreign-based entity), you can pursue a branch license from DED, facilitating an expansion of operations into mainland Dubai.

INTELAQ (Home-based business for UAE Nationals)

Intelaq License Companies are home-based businesses that can be established only by UAE Nationals. The business must operate within a residential atmosphere and not cause harm to individuals or the environment. Legal forms include Sole Establishment, LLC, Civil Company, and Partnership, but Intelaq license holders are prohibited from sponsoring employees.

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