MAINLAND/ LOCAL MARKET COMPANY
Broadly, there are two jurisdictions in Dubai for conducting business: Dubai “Mainland”on one hand, and more than 45 economic free zones in Dubai on the other hand. Mainland and free zones offer different advantages depending on your business type and activities.
If you choose to conduct business in Dubai mainland, you will need to register with DED, who will issue you with a Dubai business license. Should you require assistance at
any stage of getting a DED business license, please contact us.
What is LLC/Mainland or Local Market Company?
- Ownership: Ownership of shares within the company is dependent on type of investor. A UAE national must own at least 51% of the firm’s equity is the minimum for UAE national while a foreign investor must not own more than 49%.
- Shareholders: Forming an LLC company in Dubai requires a minimum of 2 and a maximum of 50 shareholders.
- Capital: The UAE Companies Law does not prescribe any minimum share capital but the entity should have adequate capital to achieve the purposes of its incorporation and the capital shall consist of share equal in value. The current generally accepted minimum share capital for an LLC registered in Dubai is AED 100,000. Presently, there is no requirement to deposit the share capital in a UAE registered bank. It will suffice to include details of its share capital in the LLC memorandum of association and to have the same duly notarized by the UAE notary public.
- Profit or loss: The distribution of profit or loss can be agreed upon while the responsibility of managing of LLC can either be vested on the national or foreign partners or even a third party. Shares of LLC are neither open for public subscription nor can they be issued as negotiable.
- Limitation: An LLC is not allowed to offer insurance, business banking or money investment services on behalf of others. In addition, these shares cannot be represented as negotiable instruments. Limited Liability Company Features:
Limited Liability Company Features:
The following are the fundamentals aspects of forming a limited liability company:
- Though foreign equity in the company does not exceed 49%, profit and losses can be shared at a ratio different from the share capital.
- Any legal commercial activity can be setup as an LLC company in Dubai.
- Branches of an LLC can be opened within the same emirate or in other jurisdictions.
- Day-to-day operations including banking operations can be managed by the manager appointed in MOA which is notarized in public notary.
- In most cases, the actual investor becomes the manager of the company.
- There are also special licenses issued by Department of economic development. An approval from relevant authorities may be required for certain activities. These bodies include the DHA, KHDA, RTA, DTCM and Dubai municipalities among others.
- It is mandatory to rent an office and obtain Ejari in order to incorporate an LLC. However, the Dubai DED has recently approved instant licenses where renting an office was not required.
- The rental requirement is replaced by paying an additional fee of AED 10,000 for the first year of incorporation. Under instant licenses, it is not possible to obtain employment visas.
- Trading LLCs are allowed to conduct business within the emirate as well as export and
Mainland Company Formation for A GCC Company In Dubai
Fee Structure of Local Company
- Sponsorship fee may vary depending on the business activities and requirements of clients.
- The sponsorship fee will increase if the number of employees increases to more than 100 and if company requires credit facilities on the MOA.
- Sponsorship fees for Industrial/Manufacturing licenses starts from AED 89,250
- Sponsorship fees starts from AED 31,500 for Investment Companies.
- The Memorandum of Association/Local Service Agent Agreement/Civil Works Agreement drafting and notarizing fees will be approximately AED 2,016 (based on a 2 shareholder, AED 100,000 share capital computation).
- Payment Voucher for General Trading companies will be approximately AED 25,000 – AED 30,000.
- Sponsorship fees, PRO Fees, and License fees are annual and payable upon license expiry.
- Upon sign-up, the Name Reservation Fee of AED 660 and Initial Approval Fee of 160 must be paid and all actual government payments are invoiced as it is being processed.
- Should an LLC require credit facilities, the company must be able to provide proof of paid-up share capital as per the MOA.
- Final Payment Voucher Fees are dependent on the business activity as well as the cost of annual rent.