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Company Incorporation in UAE

Company Incorporation in UAE

In the UAE, every individual emirate, Free Zone and the Federal Government has its own rules and regulations for the setting up of companies and operating businesses. There are many options open to Foreign Companies and Individuals who are looking to register their company in UAE. Carrying out a business in Dubai without the necessary licenses and permits is considered illegal and can call for huge penalties and fines.
 
Some of the most common types of arrangements/entities are: 
 
Foreign Investment Companies 
Limited Liability Company (LLC) 
Branch or Representative Office of a Foreign company 
Commercial Agency or Distributor arrangements 
Professional Service Company 
Free Zone Company 
Offshore Company 
 

Foreign Investment Companies in UAE

 
A Foreign Investment Company is a company where the ownership percentage of the Foreign Investor can be up to 100%. Foreign Investment Companies are licensed by the competent licensing authorities in accordance with the provisions of the Foreign Direct Investment Law and registered the Foreign Investment Companies Register.
 

Requirements

  • The activity of the company should be from the “Positive List” outlined in the Foreign Direct Investment Law. 
  • The business should add value to the economy of the country and protect the environment and maintain public health and safety 
  • The company should comply with all the requirements stated in the Federal Investment Law (and its amendments) 
 
The details of the activities stated in the Positive List and the extent of permitted foreign ownership is decided by the licensing authority of each Emirate in UAE. Hence it is preferable to check with our associates from time to time to receive updated information about this. 
 

Limited Liability Company (LLC) in UAE

 
A Limited Liability Company is the most common form of business entity currently formed in the UAE. An LLC can be formed by a minimum of 2 and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. According to the Commercial Companies Law, a foreign company/individual may participate in an LLC to the extent of 49% of its share capital and the remaining 51% should be held by a UAE National individual or a UAE Company which is 100% owned by UAE Nationals.
 

LLC Requirements

  • Identify the accurate business activity of the LLC. An LLC can have (a) Commercial License (b) Professional License or (c) Industrial License 
  • Partner up with a UAE local partner. Our vast experience in the local market and association with distinguished and well respected UAE Nationals will help you identify a local partner appropriate to your business requirements 
  • Reserve a trade name for the LLC and obtain the initial activity approval from the Department of Economic Development (DED) 
  • Sign the Memorandum of Association 
  • Identify an office for the LLC and obtain the Ejari 
  • Complete the licensing process with the DED and collect the license 
 
Further to the setting up of the LLC, James Berry & Associates can also assist with the opening of the bank account, appointment of auditors & accountants and assist with the visa process
 

Branch / Representative Office of a Foreign Company

 
A branch or representative office of a foreign company is the most preferred option by most foreign companies as it allows them to retain 100% control. Even though a branch or a representative office is a completely licensed entity in UAE, it is permitted to only carry out activities similar to that of its parent entity. Branches and Representative offices in the UAE are also specifically excluded from carrying out any kind of trading activity in the UAE. 
 

Requirements

  • Ascertain if you need to set up a “Branch” or a “Representative” office. This is important because the representative office is only allowed to represent, coordinate, control and promote business and a branch office is a full-fledged business, permitted to perform contracts or conduct other activities as specified in its license.
  • The Branch or Representative office needs to appoint a “Service Agent” which is normally a UAE National or a company wholly owned by UAE Nationals. The Service Agent is not permitted to own equity in or participate in the management or operation of the branch office and shall typically assist in providing specific government related services for which a fee is paid annually. Our vast experience in the local market and association with distinguished and well respected UAE Nationals will help you identify a local partner appropriate to your business requirements 
  • Apply for the initial approval from the Ministry of Economy & the Department of Economic Development. All branch & representative offices of foreign companies are required to register with the Ministry of Economy
  • Sign the Service Agency Agreement with the Service Agent 
  • Identify an office space and obtain an Ejari in the name of the Branch
  • Deposit a refundable bank guarantee of AED 50,000 with the Ministry of Economy
  • Obtain the final approval and license from the Ministry of Economy & the Department of Economic Development.
 

Professional Service Company in UAE

 
A Professional Services Company or a Civil Company is the type of company that can be set up with a professional license and undertakes directly a specific profession as its activity. The partners of a civil company have 100% ownership in their business. The Civil Company practices a profession as its main object and the partners of that firm rely on their livelihood on the intellectual effort they exercise more than on profiting from the business of others. Firms which are registered as professional service companies may only practice the specific activities for which they have obtained the professional license and their activities will not extend to commercial activities.
 

Requirements

  • Identify the exact professional activity as per your qualification or area of expertise.
  • A professional service company is required to appoint a UAE National as a Local Service Agent. The Service Agent is not permitted to own equity in or participate in the substantive management or operation of a professional license. The Service Agent is compensated for the services he provides and this compensation is a purely contractual matter. Our vast experience in the local market and association with distinguished and well respected UAE Nationals will help you identify a local partner appropriate to your business requirements 
  • Reserve a trade name for the professional service company and obtain the initial activity approval from the Department of Economic Development (DED) 
  • Obtain approvals from any other departments (if required) based on the activity of the company (eg: Engineering & Architectural activities- approval from the Dubai Municipality)
  • Sign the Service Agency Agreement with the Service agent 
  • Identify an office for the civil company and obtain the Ejari 
  • Complete the licensing process with the DED and collect the license 
 

Free Zone Companies in the UAE

 
There are many Free Zones in Dubai and in the UAE. These Free Zones are by and large classified on the basis of the activities they permit. Each Free Zone is administered autonomously by its own administrative authority. Free Zones permit 100% foreign ownership and a company licensed in a Free Zone is permitted to carry out its business within that zone.
Some of the benefits of being in a Free Zone are: no requirement of a UAE National as a Partner or a Local Agent, high-quality standards and flexibility required by foreign companies, one stop licensing & administrative service centers, no recruitment or currency restrictions. 
 

Requirements

  • Identify the exact business activity proposed to be carried out by the company. This will help in finalizing the most suitable free zone and the type of entity
  • Apply to the free zone authority and obtain the provisional approval 
  • Choose an existing pre-built/serviced office provided by the Free Zone or lease your own shell &core office within the free zone 
  • Sign the Memorandum and Articles of Association
  • Complete the licensing process with the Free Zone and collect the license and other corporate documents of the free zone company
 

Offshore Companies in the UAE

 
An Offshore Company is an entity registered with the primary purpose of doing business outside its jurisdiction. The two main offshore jurisdictions in UAE are the Jebel Ali Free Zone and the Ras Al Khaimah Free Zone. An offshore company is usually set up in a favorable jurisdiction where there are no corporate or personal income taxes, reporting requirements or restrictions on companies’ employment policies. The main restriction on an offshore company is that (being exempt from taxes and restrictions) they may not conduct business within their place of incorporation.
An offshore company is not permitted to carry out any business in the UAE. It is usually permitted to invest in companies in UAE, own property in UAE and have bank accounts. Setting up an offshore company does not entitle you to obtain a residence visa in the UAE
 

Offshore Companies Requirements:

  • A company registered in one of the offshore jurisdictions shall enjoy all benefits of an offshore company and must at all times have a Registered Agent. James Berry & Associates are registered agents for the Jebel Ali Free Zone and can set up an offshore company for you  Foreign individuals and companies can have 100% ownership in offshore companies
  • An offshore company requires a minimum of 2 directors
  • An office space is not required and the registration has to be renewed annually

With profound knowledge of government processes and extensive experience in the UAE market, the international company incorporation team at James Berry & Associates can provide clients with bespoke company formation options and deliver significant services to their benefit.

To get in touch with our Company Incorporation team or to book an appointment please click here or send your email to enquiries@jamesberrylaw.ae.

 

In the UAE, every individual emirate, Free Zone and the Federal Government has its own rules and regulations for the setting up of companies and operating businesses. There are many options open to Foreign Companies and Individuals who are looking to register their company in UAE. Carrying out a business in Dubai without the necessary licenses and permits is considered illegal and can call for huge penalties and fines.
 
Some of the most common types of arrangements/entities are: 
 
Foreign Investment Companies 
Limited Liability Company (LLC) 
Branch or Representative Office of a Foreign company 
Commercial Agency or Distributor arrangements 
Professional Service Company 
Free Zone Company 
Offshore Company 

 

With profound knowledge of government processes and extensive experience in the UAE market, the international company incorporation team at James Berry & Associates can provide clients with bespoke company formation options and deliver significant services to their benefit.

Deepa Suresh

  • Senior Legal Consultant
  • |
  • Corporate and Commercial

Vasumathy Subhash

  • Senior Legal Consultant
  • |
  • Corporate and Commercial

Businesses

Employment Advice for Businesses

Avoiding any disputes with your employees is extremely important in running an efficient and successful business.  Whether you require structural advice on your staff relations or you find yourself in a dispute with an employee, you should have professional advice that takes into account the sensitivity often required in employment situations whilst protecting your business interests. 

Many of our clients have welcomed the opportunity of having us review every aspect of their employment structure from the contracts and policies in place, to systems and procedures for handling disputes and all requests and other employment related issues.  We are happy to have an initial meeting with employers to assess their requirements and provide a fee structure of charges for any work or advice needed.

By taking a commercial, practical and authoritative approach to employment disputes, we aim to help prevent employment problems before they arise by putting in place contracts, policies, systems and procedures aimed at avoiding expensive, time consuming and destructive employment disputes.  When problems do arise, we look to deal with issues promptly, pragmatically and cost effectively so you can continue running your business.

Employment Advice for Individuals

Your rights as an employee can become complicated.  Whether you find yourself in a dispute with your employer or need assistance to negotiate your employment terms or exit package (including End of Service Gratuity), it is important to take professional advice that takes into account the sensitivity often required in employment situations whilst protecting your interests and rights. 

You may require a review of your rights generally if you are just starting your employment here in the UAE and our specialist team can advise you on your contract and visa requirements.

We also advise on Settlement Agreements and are able to help negotiate to achieve the best possible outcome for you and reserve your rights should this escalate to issuing a claim in the Courts. 

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