Understanding the Various Company Formation Types in Dubai

A large number of foreign business investors are coming to Dubai because this city has the most up-front laws in the world regarding company registration. Also, the foreign investors here get more incentives than other countries regarding administrations and policy and revenue as well as flexible visas for the workers and tax exemptions.

Listed below are the various forms of organizations in Dubai:

Dubai Joint Venture Company: In this type of formation, a contractual agreement is made between a local party and foreign investor. The local party should have 51% of share, but the profit and loss distribution can be arranged based on mutual agreement. Also, in this joint venture, license is not required.

Dubai LLC Formation: In this type of company formation, at least two and a maximum of fifty persons are required. LLC may engage in any legal activity except for banking, insurance and the investment of money for others. For a LLC formation in Dubai, the below mentioned steps are followed:

  • Choose a commercial name for the company and get it approved by the Licensing Department of the Economic Department.
  • The company’s Memorandum of Association is drafted and authenticated by a Notary Public in the Dubai Courts.
  • Once the Economic Department approves this, one needs to apply for entry in the Commercial Register.
  • Once approval is done, the company’s name is entered in the Commercial Register and its Memorandum of Association is issued in the Ministry of Economy and Commerce’s Bulletin.
  • The Economic Department will then issue the license.
  • In the end, Dubai Chamber of Commerce and Industry will register the company.

Dubai Public and Private Shareholding Companies: Financial companies in Dubai run as public shareholding companies. Usually, this type of company is ideal for big projects or operations, since the minimum capital required is quite high for both public and private shareholding companies. This type of company requires the UAE citizens to hold key positions like that of the chairman and within the board of directors, and unlike limited liability companies, the flexibility of profit distribution is quite less.

Dubai Branches and Representative Offices: In this type of company formation, foreign companies can set up their branches with 100% ownership, provided a local agent or sponsor is appointed. These sponsors assist in getting visas, labor cards, etc. and get a percentage of company’s profits or a large sum of money.

Dubai Sole Proprietorships: This type of company offers 100% foreign ownership and is allowed to take part in artisan activities. However, they can hire only a limited number of staff members. A local agent or sponsor is appointed who does not have any participation in the business, and is paid a lump sum percentage of turnover or profits.

Dubai Branches and Representative Offices of Foreign Professional Companies: In this case, 100% UAE owned companies or UAE nationals are appointed as local agents or sponsors. These sponsors do not have any participation in the business but are authorized to get a lump sum as remuneration.

If you are interested to form a Company in Dubai, then you can take help of the consultants who are experts in the domain, as that will help you to reap maximum benefits.

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