The United Arab Emirates (UAE) has established itself as one of the world’s top nations for establishing a business. They are renowned for their business-friendly environments, attracting entrepreneurs and existing businesses for expansion from around the globe.
Looking at some of the statistics, the UAE’s nominal GDP is approximately USD 421 billion (2023), making it one of the largest economies in the Arab world. Also, it is ranked 16th globally in the World Bank’s Ease of Doing Business Index (2020), highlighting its favourable business environment. These factors make Dubai the perfect location to launch your business.
Setting up a Limited Liability Company (LLC) in this nation has various advantages, including a strategic location, good infrastructure, and wide market potential.
This blog will provide you with all the important details on the requirements, procedures, and critical factors for establishing an LLC in Dubai and the UAE, guiding you on your journey to commercial success in this dynamic market.
What is an LLC?
In the UAE mainland, a legal business structure available is a Limited Liability Company, or LLC. It may be held by several shareholders or one individual, and it may be utilised for legitimate commercial reasons.
The government authority in charge of granting LLC licenses is the Department of Economic Development (DED) of the respective emirates. In Dubai, an LLC can be formed with as few as one stakeholder and as many as fifty. Each member is responsible for the share of capital they hold in the firm. Because of this, investors are fully protected from liability under the UAE corporate laws and regulations.
Advantages of an LLC In The UAE
1. Low corporate tax and other tax benefits
An LLC can trade anywhere in the UAE with no income tax or fixed capital requirements. However, companies registered in the UAE mainland and doing business in the UAE local markets will be required to pay Corporate Tax at a rate of 9% on earnings exceeding AED 375,000. LLCs also benefit from double taxation treaties with other nations.
2. Easy and quick business setup
Setting up an LLC in Dubai is a comparatively straightforward and simple process as compared to some other complicated business structures. The registration procedure has been optimised by the government to make it easier for foreigners to setup their companies efficiently, and with the correct paperwork, a trade license may be obtained efficiently.
3. Diverse business opportunities
An LLC in Dubai allows for a wide range of authorised commercial operations, including over 2,000 legal activities set by the Department of Economic Development. The operations change depending on the company’s location and jurisdiction.
4. Limited liability protection
In an LLC structure, the company is a separate legal entity from the business partner, meaning that the finances of its members are different from the company. The shareholders are legally protected by law and are not personally liable to the company when it is in loss, the liability is limited to the total capital invested and the personal assets of the shareholders are protected under the LLC agreement.
How To Set Up an LLC In The UAE?
1. Choose your business activities
The UAE provides a diverse range of business possibilities for LLCs. Carry out market research to ensure that your chosen activity has growth potential and meets the demands of the market.
2. Select the appropriate legal structure
The UAE offers various business legal structures. At this stage, it is crucial to select the appropriate option as required for your business.
3. Secure a unique name for your company
Choose a name that reflects the activities of your business and objectives. This step involves reserving the name with the government to ensure it complies with the UAE naming conventions.
4. Submit documents to the government authority
Prepare and submit all required paperwork to the concerned government authority. Professional guidance can make this procedure easier.
5. Prepare a Memorandum of Association (MOA)
Prepare a Memorandum of Association explaining your company’s operations, legal structure, shareholder information, and objectives. Submit these documents together with your leasing agreement to the authorities.
6. Obtain your trade license
After receiving approval from the authorities, you will receive your trade license, which will allow you to legally do business in the UAE.
The above procedures provide an organised procedure to establish your LLC in the UAE. It is advisable to get professional assistance to handle the regulatory requirements.
Documents Required to set up an LLC in the UAE
1. Shareholder’s passport copy
2. Copy of Emirates ID of the shareholders
3. No Objection Certificate (NOC) if the shareholder is employed in a UAE company
4. Registration application form from the concerned government authority
5. Attested tenancy contract for office premises
6. Attested Memorandum of Association
Types of LLC licenses
Conclusion
In conclusion, there are several benefits to establishing an LLC in Dubai and the UAE, including favourable business climate and a prime global position. Whether you choose to relocate to the UAE due to its strong legal system, tax advantages, or the wide range of readily available economic activity, it remains a top choice for firms globally.
At Gatestone Group, we specialise in offering businesses guidance throughout the whole process of company creation. From the first consultation to the acquisition of the necessary permissions and beyond, our team of professionals is dedicated to ensuring your business thrives in this competitive industry.
Are you prepared to investigate the options? For a free consultation, get in touch with us right now at [email protected] or +971 4 450 1023. Together, let’s create an enduring business legacy in the UAE.
