How to setup a Limited Liability Company (LLC) in Dubai?

What is Limited Liability Company in Dubai? 

A limited liability company (LLC) is the mostly formed corporate structure in Dubai mainland (on-shore). The UAE Commercial Companies Law (the “Law”) permit foreigners to hold up to 49% shares in LLC. The remaining 51% shares has to belong to a UAE national. However, the Law allows different ratio of profit and loss distribution between LLC shareholders.

Liability of shareholders in LLC is limited meaning that they cannot be held personally liable for the company’s debts or liabilities.An LLC can be formed by partners of not exceeding fifty but should not be less than two. LLC can not offer its shares to the public subscription and it can not issue any negotiable stocks or shares.

In general, LLC is formed to conduct commercial business activities in Dubai. Commercial business activities, which are defined in the UAE Commercial Transactions Law, include trading, import-export, retail, real estate development, investment, brokerage, facilities management, construction, manufacturing and others. LLC is being formed to conduct some professional activities as well such as restaurant, cafeteria, medical clinics and some other activities.

Limited Liability Company Registration Steps in DubaiLLC is registered and licensed by the Department of Economic Development in Dubai (DED). Following steps should be taken to register an LLC in Dubai:

  • Name Reservation. The first official step in registering your Dubai LLC is to reserve a trade name. You will need to fill up a name reservation form proposing several company names and providing the details of your business such as business activity and the owners. Trade name can be reserved on DED website, in DED offices or in typing centres. Please note that your trade name should not include some words such as Dubai, Emirates, UAE, holding and etc. In addition, your trade name should be in compliance with your business activity.
  • Initial Approval. In order to get the Initial Approval, you need to fill up and submit the Business Registration Form of DED along with your trade name reservation certificate, partners passport copies and other required documents to DED office.  The required documents can vary depending on the activity of your business.
  • External Approvals. Before issuing the Initial Approval, DED may require to obtain additional approval or No Objection Certificate (NOC) from other government departments or ministries. For instance, medical clinic activity should be approved by Dubai Health Authority; auditing of accounts activity should be approved by the Ministry of Economy; real estate related activities should be approved by Real Estate Regulatory Authority (RERA), oil and lubricants trading activities should be permitted by the Ruler’s Court and etc. The corresponding Ministries or departments have their own list of requirements in order to issue the required approval.
  • Notarization. Once you get the Initial Approval, you are ready to go to the Notary Public in Dubai and notarise a Memorandum and Articles of Association of your company. All shareholders must be present at the notary public. You need to prepare MOA beforehand. MOA should be in Arabic language; however, if it is in Arabic and English, then the translation should be done and stamped through an official legal translation offices.
  • Lease Agreement. At this stage, you can find out your office and sign a lease agreement with a property owner. Before signing the lease agreement, make sure that the office space can be used for commercial purposes, or specifically for your business activity. The lease agreement should be registered with RERA and “Ejari” registration should be obtained.
  • Final Registration & License. Once you have done all the above, you can go back to DED office with all the documents. After reviewing your documents, DED will register your company and issues a payment voucher. After making the payment, you will be able to obtain your company registration certificate documents and a license.
  • Other Formalities. Now you need to register your company with the Ministry of Labour and the Immigration Department (DNRD) in order to hire employees for your company and get residency visas for them in Dubai.