Steps to form a Limited Liability Company (LLC)
A Limited Liability Company (LLC) is the most common form of business entity formed in Dubai for engaging in commercial activities. A limited liability company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. The minimum equity participation by UAE nationals is 51%. Capital required for forming the business. Profit or loss distribution can be prescribed and responsibility of management of an LLC can be vested with national partners, foreign partners or third party. The shares of such company are not open for subscription by the public and they do not issue negotiable shares. As per the Commercial Companies Law, LLCs may be licenced to engage in a wide range of commercial activities, except for banking, insurance and the investment of money for third parties unless they obtain prior approval from the UAE Central Bank/appropriate authorities. An LLC can be used as the preferred vehicle for a joint venture between a foreign party and a UAE party (UAE national partner), if both the parties have a common business objective to be achieved in UAE. [Currently DED has waived the requirement of producing capital confirmation from a local Bank.]
Process of Establishing LLC
- Obtain initial approval for name and activity from the Department of Economic Development.
- Obtain approval from relevant Ministry/Department in case the activity is of special nature.
- Draw up company’s Memorandum of Association and have it notarised from the courts.
- Finalise office tenancy in a commercial building and get it attested by Real Estate Regulatory Agency.
- Obtain necessary approval from Dubai Municipality Planning Department.
- Submit applications and initial approval along with notarised copy of Memorandum of Association, tenancy contract etc., to the Department of Economic Development.
- After scrutiny by the legal department, the Company name will be entered in the Commercial Register and its Memorandum of Association published in the Ministry of Economy Bulletin.
- The Department of Economic Development will then issue the licence.
- Registration of the Company with Ministry of Labour and Department of Immigration.
- Registration with Dubai Customs Department and getting the Customs Code issued.