Civil Company

A civil company is an organization or partnership of two or more persons agreed to conduct professional or consultancy business activities. Liability of the shareholders are not limited in a civil company. Therefore, the partners of a civil company are personally liable to third parties for the liabilities of the company.

Professional activities are those that are being provided using intellectual qualification, know-how, gained information or professional skills. Such activities include medical clinics, consultancy activities, training institute, and other serviced provided using professional skills. Civil companies are regulated by Federal Law No. 5 of 1985 on Civil Transactions Law (the Civil Code) and other by-laws. A civil company is registered and licensed by the Department of Economic Development in each Emirate.

Unlike commercial companies, civil companies can be fully owned by foreigners in general. However, some professional activities may require to have a local partner. If there is no UAE national partner in a civil company, it should appoint a local service agent (LSA). The local service agent is a UAE national (either individual or a company), whose main role is to act as liaison between the civil company and the relevant government authorities. The relationship between the principal entity and the local service agent is regulated by an agency agreement.