How to set up business in Dubai

Establishing commercial license (limited liability company - LLC

This type of company is the most important for non-national partners. The law provides that the share capital of the limited liability company should not be less than Dhs. 150,000/- however, Dubai made the minimum share capital Dhs. 300,000 (Dirhams Three Hundred Thousand only). The shares of such companies are not open for subscription by the public and are not negotiable. Partners do not need to present capital amount to the authorities for incorporation purpose. Non-national partners are permitted to hold shares not exceeding 49% of the capital. However, profits may be divided on other ratios agreed upon, taking into consideration efforts of non-national partners in management, provision of technology or expertise. The foreign partner may undertake management of the company and fix the annual fee/profit for national partner.

Objectives of establishing LLC

The main objective of establishing LLC is to trade in physical goods inside and outside UAE Dubai Economic Department allows 5 to 6 business activities from same trading group per trade license. If investor/partners wish to trade in multi commodities and goods they can get “General Trading License”.

Conditions for establishing LLC

  1. The number of partners should not be less than two and not more than fifty.
  2. The objectives of the company should not include conducting the business of insurance, banking or investment of money for others or nature of professional services.
  3. The capital should not be less than three hundred thousand Dirhams (Dhs. 300,000) and it should be divided into equal shares whose value is not less than one thousand Dirhams each. This share shall not be represented by negotiable instruments
  4. The shares of the UAE nationals should not be less than 51% of the capital of the company, taking into consideration the business activities reserved for nationals. Incorporation of such a firm shall be according to the following procedures.
  5. Approving the name of the Company
  6. Preparation of the Memorandum of Association
  7. Authentication of the Memorandum of Association
  8. Approval of the Memorandum of Association
  9. Inscription in the Commercial Register at the Trade Licensing Department
  10. Publishing the Data of the Company
  11. Obtaining a Trade License

The professional firm is any firm which relies on practicing its activities by physical or mental efforts. Therefore, the professional firms are the ones which consist of professionals and practitioners and practice non-commercial activities. Professional licenses are issued under which the likely or legal person is licensed to practice a profession in which he depends on his physical or mental efforts rather than depending on a cash capital. The firms, which are registered as professional institution or firms may only practice specific activities and not extend that to any commercial business.

These activities include the following services:

  • Legal practice and consultancy
  • Auditing, Organizing and keeping accounting records and books
  • Civil engineering and architecture consultancies.
  • Managerial and economic consultancies and studies
  • Technical services (Including IT)
  • Medical and curative services
  • Educational services

Procedures for licensing the practice of the work:

  • organizing the partnership agreement between the partners according to the applicable procedure.
  • Authentication of the agreement according to the law.
  • applying to the Dept. of Economic Development for obtaining the license on the form
  • Specified for such purpose

For selecting a desired business activities, please refer to our expert consultant.

Required documents:

  • Brief Project Description
  • 3 -Optional Trade names of the company (on the basis of your preference)
  • Passports copy of Shareholder(s)
  • Visa page copy/entry page copy of shareholder(s)
  • Universal Identification Number (UID Number) of Shareholder(s)
  • Educational Degree/Certificate i.e. Management Degree that can prove the owner is Professional – Attested by UAE Embassy from the country of Origin
  • Any other information or documents required by the authorities for the purpose of processing the application.
  • Office tenancy contract (Attested by the RERA/Land Department) – After getting the Initial Approval & Trade Name
    • DEWA registration
    • POA

Establishing industrial firms

Industrial license is issued to a natural or judicial person to practice any investment activity the object of which is to convert natural recourses or transform raw materials in terms of its build up or development into manufactured products, or to transform the semi-manufactured product into fully manufactured products by using mechanical power and then segregating, filling, assembling or packing such products.

All licenses in the Emirate of Dubai, including industrial licenses, are issued by the Dubai Department of Economic Development (the    “DDED”).  However industrial licenses have to have to be approved by the Dubai Municipality (“DM”) and Ministry of Finance and Industry (the “Ministry”) as explained below.

Procedure for licensing industrial projects & Departments in charge:

To secure an industrial license, investors require a no objection certificate from DM for the projects (the “project”).  This approval is required as DM is responsible to safeguard public safety and the environment.  The DM (through the Industrial Unit of the Planning Department intervenes directly to ensure that the provisions of Federal Law No. 1 of 1979 regulating industrial affairs are implemented, and also to ascertain that all conditions of health and professional safety set by the concerned local departments are met.

Where the Projects does not have a negative effect on environment and is not connected with food stuff production or any related activity, the applicant shall be provided with a letter Addressed to the Ministry confirming that the DM has no objection to the Ministry’s approval for setting up a Project.

After obtaining the DM no objection letter, the investor must submit an application on the specified form of the Ministry supported by the following documents.

  • A report that includes all studies related to the Project;
  • No objection letter issued by DM along with a site plan of the plot allocated for the project, attested by the competent authority in the Emirate of Dubai; and
  • Bank Certificate issued by one of the banks operating in the UAE and three photocopies of all Project documents (business plan, specifications of any particular machinery, etc…) and the investor’s identity card or corporate documents.
  • The Industrial Department of the Ministry looks into the application for setting up industrial projects technically and economically in the light of the general plan of the emirate.
  • obtaining the industrial license form the Economic Development Department

Once the Ministry’s approval is obtained, the investor must then submit an application to the DED to issue the industrial license.  The following documents must be submitted along with the DED application.

  • Specimen of the proposed trade name of the Project;
  • Approval of the Ministry;
  • The incorporating document of the Project for example a Memorandum of Association of the entity carrying out the Project notarized before the Notary Public of Dubai Courts);
  • The site plan of premises where the Project will be set up attested by the concerned authority and the lease agreement of the premises; and
  • Copy of the tenancy contract of the labour quarters if the Project is labor intense.

When all documents and papers are verified and accepted, the application for the license and proposed trade name is then approved by DDED and referred for technical inspection.

Technical Inspection

The DED will then coordinate with the concerned departments at the DM such as Planning, Public Health as well as Civil Defence to carry out a technical inspection of the Project premises.

Officials from these departments will visit the premises after completion of the construction work, installation of machinery and equipment, and preparation of stores, offices, and other facilities, to ensure the conditions for professional safety and the requirements of public health and environment protection are met.

Payment of Fess & Issue of the License:

After completion of the above procedure, all documents and reports are verified by the DED to ensure they are correct and pursuant to which the annual fees are ascertained and a receipt of the same is given to the investor of the Project.  The license is issued after payment of the due fees.

Establishing branch office of foreign firms

The company which chooses to open a branch in the U.A.E.  May freely carry out the activities indicated in the trade license it obtains.

However, licensing is governed by legal rules and regulations. According to the Law, there are certain activities, which can only be carried out by UAE nationals such as banks, finance, insurance and commercial agencies.

There are also other licensing procedures and conditions governing the work of the (DED) that issues from time to time certain regulations and administrative decrees. A foreign company, which opens a representative office in UAE, may launch promotional operations for its products and services.

The office may also facilitate contracts between the company and its local clients. However, the office is  not  licensed  to  conduct  business  operation  of  whatsoever  kind  such as obtaining credit facilities, making offers, etc.

It is provisional for offices and branches of foreign companies to appoint a local service agent. Such an agent, as already explained in the chapter oncommercialagencies, is not an agent in the proper sense of the word. Article 314 of the Commercial Companies Law, explains the legal status of the service agent. As per this article, such an agent shall hold no responsibility against the company’s financial dealings and shall not interfere in its management.

The role of a service agent is confined to providing services such asobtaining visas and residence permits for the staff, licensing procedure with the Department of Economic Development and formalities for obtaining the certificates of the Chamber of Commerce. Also the agent may undertake other services related to government departments such as submission to tender documents, keeping the foreign company informed about tender notices, follow up the company’s affairs and activities and notifying it with the outcome.

In consideration of his services, the agent is usually paid an agreed lump sum amount from the foreign company. If the agent is body corporate, it should be a private proprietorship or company wholly owned by UAE nationals.

It is not permitted for foreign companies licensed to operate in the UAE to start their activities before obtaining the Trade License from the Department of Economic Development. Setting up a branch of a foreign company shall be according to the following steps:

  1. The application shall be submitted to the Department of Commercial Affairs of the office of the Ministry of Economy & Commerce in Dubai.  The application should include the following data:
    1. Name, type  of  company and address of its main office in the original country.
    2. Type of activity, specialization or type of operations required to be practiced in Dubai.
    3. Main  operations  carried  out  by  the  company  and  its  previous expertise in the field of activity, which is required to be practiced in Duba
    4. Name of the local service agent in Dubai and his address if he is a juridical person (company, then the legal form, capital, names of the share holders (or partners if it is a firm), their nationalities and addresses should be stated provided that all of them are UAE nationals.
    5. The Department of Commercial Affairs at the Ministry of Economy & Commerce after registering the application giving it a number and making sure that the required documents are complete, shall refer it to the Department of Economic Development.
  2. If the application is rejected, it shall be returned to the Department of Commercial  Affairs  to  be  kept  there  and  the  concerned  parties  shall  be notified of the rejection.
  3. If accepted, the application shall be referred to the Committee of Foreign Companies in the Ministry for approving the content of the application and to determine activity.
  4. This committee shall prepare its recommendations and refer them to the Minister of Economy & Commerce for issuing his decree.  The Dept. of Commercial Affairs at the Ministry shall then issue the documents of the license.
  5. Completion of inscription procedures in the commercial register at the Dept. of Economic Development according to the usual procedure for licensing.
  6. Registration of the company’s branch with the Dubai Chamber of Commerce & Industry in accordance with the accepted procedure

REQUIRED DOCUMENTS: (Mother Company)

Following documents are required to be attested and legalized at the UAE Embassy/Consulate from the country of origin of the mother company.

  1. Certificate of Registration/Incorporation
  2. Certificate of Good Standing of the company
  3. Memorandum and Article of Association
  4. A company’s Board Resolution calling for the establishment of a branch in DUBAI and guaranteeing full financial commitment and appointment of the following, all notarized and attested by the UAE Embassy:
  1. Appointed Manager / Representative
  2. Appointed Negotiator / Legal Representative
  3. Power of Attorney for Manage
  4. Manager passport copy and legal representative
  5. Audited financial report of the Mother company for two years
  6. CV of the manager of the UAE Office (Attestation not required)
  7. CV of the Directors of the Mother company. (Attestation not required)
  8. Mother company Profile
  9. NOC from present sponsor if manager ison UAE Residence visa
  10. Any other information or documents required by the Authorities for the purpose of Branch office registration.

On the receipt of the above documents duly legalized and attested from the U.A.E Embassy/Consulate, we will get those documents translated  into Arabic by the Ministry approved Legal Translator and legalized from the Ministry of Foreign Affairs in Dubai.

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