If you’re an entrepreneur wanting to start a business in Dubai, understanding the details of an LLC is the first step. This setup can protect your personal assets, give you flexibility, and allow you to engage in different business activities. Get this important knowledge to help make your business successful.
Types of LLC License in Dubai
Step-by-Step Process For Company Formation in Dubai
Choose Your Business Activities
The Department of Economic Development (DED) in Dubai provides a list of over 2,000 business activities. You must select your business’s primary and secondary activities, as this will influence licensing and approvals.
Select a Trade Name
Your company name must comply with UAE naming conventions, avoiding any religious or political references. You can check and reserve your name through DED’s online system.
Obtain Initial Approvals
Before proceeding, you need an initial approval certificate from the DED. This step includes getting approval from relevant government entities based on your business activities.
Draft a Memorandum of Association (MoA)
This legal document outlines your company’s shareholding structure and the relationship between partners. If a local sponsor is required (for Dubai mainland businesses), their details will be included.
Choose a Business Location
For mainland LLCs, having a physical office space is mandatory. A tenancy contract is necessary to complete the process. In Free Zones, virtual offices may be an option.
Submit Required Documents
You’ll need to submit all required documents, such as copies of passports, the MoA, and tenancy contracts, to the DED.
Obtain a Trade License
Once all approvals are in place, you can apply for the business license. This is your legal permit to operate your LLC in Dubai.
Apply for Visas
Dubai LLC owners can apply for investor visas and also secure visas for employees. If your business qualifies, you may even be eligible for long-term residency options like the Golden Visa.
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Benefits of Forming an LLC Company in Dubai
Documents Required for LLC Formation in Dubai
- Passport copies of all shareholders and partners.
- Passport copy of the local sponsor (if applicable).
- No Objection Certificate (NOC) from a current employer, if the shareholder is employed in the UAE.
- Emirates ID copies of all shareholders and the local sponsor.
- DED registration application form, which includes details about the business, its name, and intended activities.
- Residence visas of all shareholders, if they are already UAE residents.
- Tenancy contract (EJARI) or lease agreement for the business premises.
- Memorandum of Association (MoA), detailing the shareholding structure and roles.
- Trade name reservation certificate, confirming that the business name complies with UAE regulations.
Additional approvals may be required depending on the business activity, such as industry-specific licenses for healthcare, tourism, or engineering
Considerations for a Successful LLC Setup in Dubai
Choosing the Right Business Activity:
With over 2,000 options, selecting the right business activity is crucial to avoid delays. Make sure it aligns with your business needs.
Ownership Requirements:
Some sectors require a local sponsor with 51% ownership, though reforms allow full foreign ownership in many areas.
Meeting Office Space Requirements:
Mainland LLCs must have an office, which can be costly. Free zones offer flexibility but restrict business outside the zone.
Handling Regulatory Approvals:
Approvals can be complex and time-consuming, especially in regulated sectors. Plan for extra time and costs as needed.
Bank Account Opening Challenges:
Opening a business bank account is often slow and requires complete, accurate documents to prevent further delays.
Cost Management:
LLC costs include trade license, rent, visa, and sponsor fees. Unexpected expenses may arise, so it is recommended to plan your budget carefully.
Free Zone vs. Mainland:
Free zones allow 100% ownership but limit external trade, while mainland LLCs offer wider trade but more regulations.
Staying Compliant with UAE Regulations:
Strict regulations result in non-compliance fines or license cancellation. Keep up with rule changes to avoid penalties.
Bank Account Opening Process for Dubai LLCs
1. Choose the Right Bank:
Select a bank that suits your needs by comparing transaction fees, online services, and maintenance charges.
2. Submit the Application:
Go to the bank, meet with a manager, and submit all required documents with the application form.
3. Compliance and Due Diligence:
Banks check backgrounds of shareholders, business activities, and fund sources for compliance.
4. Interview with the Bank:
Some banks may ask LLC shareholders or signatories for an in-person interview.
5. Account Approval and Activation:
Approval may take 2 to 4 weeks, depending on bank requirements and business complexity.
6. Initial Deposit:
Deposit requirements vary from AED 25,000 to AED 150,000 based on the bank and account type.
Required Documents
- Trade License: A copy of your trade license from the DED.
- Memorandum of Association (MoA): Document showing the LLC’s shareholding structure.
- Shareholder Information: Passports, Emirates IDs, and visa pages of all shareholders.
- Resolution to Open a Bank Account: A board-signed authorization to open the account.
- Proof of Address: Utility bills or lease as proof of office address.
- Business Plan: A detailed plan of activities, income, and structure.
List of Business Activities LLCs in Dubai
LLC Consultants in Dubai
How Riz & Mona Consultancy Can Help?
Riz & Mona Consultancy is renowned as one of the top business setup consultants in Dubai, with over 15 years of experience facilitating a wide range of businesses throughout the UAE. Our deep connections with government officials and key authorities, combined with our extensive expertise in consultancy, streamline the process of establishing your business in Dubai. Additionally, we offer comprehensive financial, legal, and corporate services to support our clients throughout their business endeavors.
We are here to provide comprehensive support for your LLC Company Formation in Dubai, from preparing your documents to completing the process. Connect with us now to begin your journey with a FREE consultation!
FAQS (Frequently Asked Questions)
How long does it take to form a Limited Liability Company in Dubai?
The process of LLC company registration in Dubai generally takes between 2 to 4 weeks. The time may vary depending on the complexity of the business activities and whether external approvals are required.
Can LLC owners in Dubai repatriate profits?
Yes, LLC owners in Dubai can fully repatriate profits and capital without any restrictions. This benefit is a major attraction for foreign investors, allowing them to transfer profits back to their home country with no withholding taxes or restrictions on the amount.
What are the disadvantages of LLC in UAE?
Disadvantages include potential limitations on business activities, high compliance costs for renewal and visas, and, in some cases, the requirement for a local sponsor (51% UAE national ownership for some sectors on the mainland).
How much is the LLC visa in Dubai?
The cost of an investor visa in Dubai ranges from AED 3,000 to AED 7,500 depending on factors like processing speed and visa duration.
What is the minimum capital requirement for an LLC in Dubai?
There is generally no minimum capital requirement for most sectors. However, certain specialized industries may have capital requirements depending on the activity.
How much does a business visa cost in Dubai?
A business visa costs AED 2,500 to AED 5,000 for an initial application, depending on the number of visas required and the type of business.