LLC Company Formation In Dubai
The most common business structure in Dubai, United Arab Emirates, is the LLC Company formation. Opening a company in Dubai gives access to the entire UAE market and creates a regional presence that enables access to a larger market. Due to advantageous rules passed by the UAE government, the LLC business structure has increased in popularity over the last several years. Investors and business partners can enjoy the benefits of both a corporation structure and a business partnership model that doesn't require a lot of work.
What is a Limited Liability Company (LLC)?
The most popular kind of business entity in the UAE is the Limited Liability Corporation (LLC). A Limited Liability Corporation can be established by two or more shareholders, with a 50-share maximum, who are each only liable for their individual shares of the company's capital. Hence, stockholders are fully protected from liability under Dubai's corporate rules.
How does an LLC Company work?
With an LLC set up, you have a wider range of commercial activities available for the creation of a firm. When you set up a limited liability company in Dubai, you must work with a local sponsor, who must be a UAE citizen. The local sponsor will own 51% of the business. In this instance, the expatriate would be in charge of the remaining 49%. Reputable local sponsors support your company as silent partners, giving you complete operational control.
Advantages of LLC Company in Dubai
Limited Liability Protection: One of the primary advantages of an LLC company is that it provides limited liability protection to its owners. This means that the personal assets of the owners are protected from the liabilities of the company. In other words, if the company faces financial difficulties or legal disputes, the owner’s personal assets will not be at risk.
Quick and Easy Setup:
Setting up an LLC company in Dubai is relatively straightforward and can be done in a few weeks. This is because the government has streamlined the registration process and made it easier for foreign investors to establish businesses in Dubai.
Flexibility in Management:
LLC companies in Dubai have a flexible management structure. The owners can choose to manage the company themselves or hire a professional management team to handle day-to-day operations. This provides owners with more control over their business operations.
Access to Tax Benefits:
LLC companies in Dubai are not subject to corporate tax or personal income tax. This means that owners can retain more profits and reinvest them back into their business. Additionally, Dubai offers various tax incentives and exemptions for businesses in certain industries.
Access to Local Markets:
Dubai is a hub for business and commerce in the Middle East. By establishing an LLC company in Dubai, owners can gain access to the local market and expand their business operations in the region.
Ownership Structure:
LLC companies in Dubai can have up to 50 shareholders, providing owners with more options for raising capital and expanding their business.
How to Open an LLC Company in Dubai?
There are a few steps involved in forming an LLC company in Dubai. For this purpose, several documents are needed, along with two approvals (initial and final approval). But powerful consulting firms can easily handle the entire process. They can work together easily with the appropriate local authorities to manage this protracted and challenging process.
Before, during, and after you start your business, you must make sure to follow all the laws and rules that the UAE government has put in place for businesses. These are the essential steps to forming a Limited Liability Corporation in the United Arab Emirates.
1. Choose a Business Activity
The first step in opening an LLC company in Dubai is to choose a business activity. You will need to decide on the type of business you want to start and ensure that it complies with the UAE’s legal framework. Some common business activities in Dubai include trading, manufacturing, and service-based businesses.
2. Find a Local Sponsor
One of the requirements of opening an LLC company in Dubai is to have a local sponsor who will own 51% of the company’s shares. The sponsor can be an individual or a company and must be a UAE national or a UAE-owned company.
3. Choose a Company Name
You will need to choose a name for your company that is unique and not already registered in Dubai. The name should follow the rules for naming in the UAE and not have any offensive or religious words in it.
4. Obtain Necessary Approvals
In Dubai, you will need permission from a number of government agencies to start an LLC. These include the Dubai Department of Economic Development (DED), Dubai Chamber of Commerce, and the Ministry of Economy.
5. Draft Memorandum and Articles of Association:
The Memorandum and Articles of Association (MAA) is a legal document that outlines the company’s structure, activities, and ownership details. You will need to draft this document and have it notarized by a Dubai notary public.
6. Rent Office Space:
To obtain a trade license in Dubai, you will need to rent an office space that meets the requirements set by the DED. The office space must be located in a commercial area and must be of a minimum size.
7. Obtain Trade License:
Once you have completed all the above steps, you can apply for a trade license from the DED. The trade license will allow you to conduct business activities in Dubai legally.
How much does it cost to open an LLC company in Dubai?
The cost of opening an LLC company in Dubai, UAE can vary depending on several factors such as the size of the company, the nature of the business, and the location of the office. Approximately, setting up an LLC company in Dubai costs starting from 18,5000 AED. However, the cost can vary depending on different factors, including:
- Local Sponsor Fees
- Trade License Fees
- Office Rent
- Legal and Professional Fees
- Visa Fees
For the majority of commercial endeavors, the cost to establish a limited liability company in Dubai is almost the same. The only variables that may affect the price are the number of visas requested, the medical insurance plan selected, any further government agency approvals, and the international trade name.
In conclusion, the cost of opening an LLC company in Dubai can vary depending on several factors. However, the total cost can range from AED 50,000 to AED 150,000, which includes company registration fees, local sponsor fees, trade license fees, office rent, legal and professional fees, and visa fees. It is important to consult with a local expert or business setup consultant to get a more accurate estimate of the total cost involved in opening an LLC company in Dubai.
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