Business Setup & Planning - Incorporation

LIMITED LIABILITY COMPANY (LLC)

Foreign investors have fought shy of making a local company (LLC) because of the 51% ownership that must be given to local nationals. Not to worry. You can still take advantage of using LLC without having to share your returns on the investments. Dubai LLC Formation allows companies to come up with flexible, differential profit sharing arrangements with your local sponsor. These can give you an enormous relief, especially since the 51% local equity rule is quite inflexible in most cases. It’s not surprising, therefore, that the LLC is the most popular form of business organization in UAE.

A Limited Liability Company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the Company’s capital. Most Companies with expatriate partners have opted for this Limited Liability Company, due to the fact that this is the only option which will give maximum legal ownership i.e. 49% to the expatriates for a trading license.

Fifty-one per cent participation by UAE nationals is the general requirement for the Limited Liability Companies. Therefore the normal shareholding pattern for LLC will be :

  • Local sponsor – 51% and
  • Foreign Shareholder (s) – 49%

The minimum capital requirement is AED 300,000 (US$ 82,000), contributed in cash. While foreign equity in the Company may not exceed 49%, profit and loss distribution can be mutually agreed. Responsibility for the management of a Limited Liability Company can be vested in the foreign or national partners or a third party.

The time required to form a company will be approximate 1-2 weeks from the date of receipt of all the documents. The procedure and cost breakup will be given upon request.