LLC Formation in Dubai

Limited-Liability Company (LLC)

In a limited-liability company, the minimum number of shareholders is two and the maximum is 50. The liability of shareholders is limited to their shares in the capital. The company may carry on any type of activities except insurance, banking, or money investment. In UAE, The minimum capital requirement law was abolished on 10th August 2009. The memorandum of association must include the following:

Trade name of the company, its objectives, head office, duration, names of shareholders, their nationalities, addresses, and places of residence; and Amount of capital, share of each shareholder, and a statement of capital paid in kind (if any), names and nationalities of the company managers, distribution of profits and losses which may not necessarily be in the same proportion as the capital, and the adopted method of notification.

In Dubai, Capital Deposit rule has been cancelled. i.e. Limited Liability Company can be formed without Bank Deposit Certificate and Auditor Certificate. In Abu Dhabi, minimum capital requirement is Dh150,000. The manager of the company will be allowed to operate the account as soon as the incorporation is completed. The Manager of the company can be more than one and he/they shall have all administrative and financial powers. A shareholder may transfer his share in the company or part of it to another shareholder or to a third party. Management is handled by no more than five designated managers, who are not necessarily members of the company. Non-UAE nationals may own up to 49 per cent of an LLC.

In distribution of profit and loss, foreign investor can have 80% and 20% local UAE sponsor.

It is imperative that each limited-liability company appoints auditors to satisfy the requirements of the Commercial Companies Act. The law does not permit this form of company to issue share certificates. Evidence of ownership in the company is related and evidenced by the percentage contributed, assigned, or transferred in the share capital.

Silent Partner

A larger portion of Dubai Limited Liability Companies use the local UAE sponsor as a “silent partner.” In this arrangement, the local UAE sponsor is usually paid an annual “sponsorship fee” in return for giving up management control of the company to the foreign investor. To prepare your LLC Agreement

Steps of forming a Limited-Liability Company (LLC)

Name reservation from Department of Economic Development (DED) or Tasheel Centre at Al Tawar Centre, Qusais. Fees: Dh741 including service charge. Foreign/English words and short words/Abbreviation will be charged extra fee of Dh2000 per year at the time of license renewal. First time fees should be paid along with first license fees.
Trade Names that cannot be reserved: Name of country, Name of Continent, Famous regions and Towns, Colour (blue, red etc.).
Initial Approval for activity from Department of Economic Development (DED) or Tasheel Centre. Initial approval fee Dh300 to be paid at DED.

Documents required for initial approval

Filled form, Passport Copies of Partners, Naturalization book’s (Jinsiyya) copy of Local Partner, No Objection Letter from the sponsor for expatriate partners (NOC is not required for visit/Tourist visa holders and their visa copy should be attached).
Some activities require initial approval from concerned departments (eg. Municipality, RTA, National Media Council etc.)
Preparing Memorandum of Association (LLC Agreement)
Attestation of Memorandum of Association from Notary Public. As per the new rule, the court agreement must be typed by legal translator or get seal and signature of the legal translator on the agreement if it is typed from normal typing centre.
Tenancy Contract (It is suggested to contact the counter of the Planning Dept. of Dubai Municipality, at the Department of Economic Development, on Telephone No. 04-2020105, or the Municipality’s Telephone No. 04-2063788, before leasing the premises in order to ensure that it is suitable for the business). Get approval on Tenancy contract from Planning Dept. of Dubai Municipality at DED.
Submit Initial approval, Name reservation certificate, Attested Memorandum & Tenancy Contract at Department of Economic Development.
Payment voucher will be issued same time or can be printed from DED Website after two days.

Special approval required for certain business activities from the concerned authorities

Tourism Companies

For Inbound Tou rism Dh100,000 to be deposited in Bank For Outbound Tourism Dh200,000 to be deposited in Bank These deposits are irrevocable till the license cancelled.

Travels

For Travel Agency Dh100,000 to be deposited at Department of Tourism & Commerce Marketing. This deposit is irrevocable till the license cancelled.

General Trading

For General Trading License, Dh15,000 to be paid extra at the Department of Economic Development when the license issued first time.

Building Contracting Companies

For Building Contracting Company License, Dh10,000 to be extra at the Department of Economic Development when the license issued first time. Office area should be minimum 1500 square feet.
Engineering Consultants: Minimum office space 1000 square feet required.

Customs Broker

Dh50,000 to be deposited at Dubai Customs. This deposit is irrevocable till the license is cancelled.

RTA Activities

(following fees to be paid for RTA initial approval)
Rent a Car: Dh5000
Bus Rental: Dh1000
Passenger Transport by rented Buses: Dh1000

Telephones & Telecommunications Equipment Trading

Dh5500 to be paid at Telecommunications Regulator Authority (TRA). This is one time fee.

Security Service

Property guard & Surveillance Services, Party security & private guarding services
Initial approval from Department of Protective Systems, Dubai.

Oilfield & Natural Gas related activities

Initial approval from Ruler’s Court

Money Exchange

Initial approval from Central Bank of UAE and Department of Protective Systems

Jewelry, Mobile SIM Card Trading, Stamp & Seal Making

Initial approval from Department of Protective Systems

Car Wash License

Car Wash License is issued only in locations where there is a petrol filling station. This will need an agreement with the said oil company to lease the space at their filling station. Other norms on environment protection and safety have to be followed as per the standards prescribed.

Supermarket

For supermarket, minimum 2000 square feet area is required.

Electrical Fitting Contracting

minimum 360 square feet office area is required.

Cafeteria/Coffee Shop

Minimum 175 square feet kitchen area is required.

Street Food Truck License in Dubai is controlled by Dubai Municipality

Only ready-made meals and fry-ups are allowed to be served by food trucks. Get No Objection Permit from Permits and Applied Nutrition section at Dubai Municipality to conduct this activity. The kitchen area in the vehicle must be suitable for the permitted activities. The floors, walls and ceilings should be made of smooth materials; they should be easy to clean, non absorbent of water, fire-resistant, light-coloured, non-toxic and without cracks. Food trucks must also provide appropriate ventilation and lighting. There should also be a double sink for washing small equipment that is situated close to the preparation area. It is also required to provide sufficient and appropriate places for storing one-time use packaging materials, and the equipment should be conveniently distributed inside the vehicle, so as to separate the various operations to prevent cross-contamination. It is not allowed to prepare raw materials, thawed meat, poultry and fish in the mobile truck. The activity of food trucks should be limited to heating operations, simple barbecues and fry-ups for ready-made meals like burgers, sausages and French fries. It is not allowed to clean and wash the vegetables in the mobile trucks, and all vegetables must be sorted, cleaned, sterilised and stored in clean covered containers outside the vehicle, in a licensed and secure place in order to avoid cross-contamination.