For years, Dubai has grown to become a global business hub renowned worldwide for its healthy business climate, progressive regulations, and skilled workforce. It’s also home to relaxed immigration and tax policies that make operating a profitable business easier. Many investors and entrepreneurs travel to the region to form companies and conduct business.
One such company type is known as a civil company. A civil company is formed when two or more individuals partner to provide professional services, such as healthcare, legal representation, engineering, or accounting. In Dubai, the owners of this form of company can be of any nationality as long as it falls within the UAE or GCC. However, if one or more partners hail from a nation outside these countries, a local service agent must be appointed.
Below, we’ll dive deeper into civil companies, how to form one, and how you can benefit from a civil business setup in Dubai.
Conditions and Eligibility for Forming a Civil Company in the UAE
Fully qualified and licensed in specialized business sectors, such as engineering, law practices, medicine, or accounting, can apply to establish a civil company. These businesses are granted full ownership without the need for a national sponsor. However, certain conditions must apply to be eligible to establish a civil company. These include:
- Civil companies are restricted to the number of managers that can be appointed.
- Local Service Agents require a Service Agent Agreement.
- Trade Names must be consistent and in line with the activity of the firm business activity.
- Civil companies are permitted to have more than one branch. Each branch may undertake one or more activities included in the primary businesses’ license.
- Civil companies can be sold to any party or company.
- Civil companies are given the ability to change their legal structure as long as it coincides with the Department of Economic Development’s (DED) rules.
The Advantages of Forming a Civil Company in Dubai
Forming a civil company in the UAE has many benefits that make business operations more straightforward, more profitable, and adaptable for investors and entrepreneurs. Let’s take a look at just a few of these benefits:
1. Quick and Simple Setup:
Forming a civil company in Dubai is designed to be straightforward and, in some cases, can be completed in 90 minutes.
2. Multiple Visa Applications:
Civil companies are a common part of larger organizations as they allow investors to apply for multiple visa types.
3. Low-Cost:
Professional license applications typically cost around AED 17,000, but forming a new civil company does not require upfront share capital. These license fees are designed to minimize your business setup cost.
4. Multiple Shareholders:
Civil companies in Dubai allow entrepreneurs to form a business with two or more shareholders, with a cap of 50.
5. Easy Dependent Sponsorship:
In addition to sponsoring your employees for their visas, you'll also be able to sponsor dependents, saving you tons of hassle.
6. Work With a Local Service Agent:
While LLCs will require a local service agent who owns a 51% share of your company, civil companies are permitted to own 100% of the company and hire UAE nationals as legal service agents.
Steps to Set Up a Civil Company in Dubai
Forming a civil company is a process that, despite being designed to be straightforward, can be challenging for ex-pats unfamiliar with business registration in Dubai. Some entrepreneurs choose knowledgeable business setup consultants, like MSZ Consultancy, to help them navigate the process. But if you plan to complete the process independently, here are the steps you'll need to take.
1. Determine Your Business Activity:
The first step in forming your civil company will be determining your business activity. You'll be able to choose from a wide variety of professional jobs that fit your education and background.
2. Register Your Trade Name:
Your business name is important! You'll want to carefully choose a trade name and submit it to the Department of Economic Development (DED), ensuring that it has not already been claimed and does not contain profanity.
3. Secure Initial Approval:
You'll also want to secure an initial approval by the DED. This will require you to submit several important documents, detailed below.
4. Submit Documentation:
The documents required for your civil company formation include the following:
- Initial approval application, signed by all foreign partners and local service agents
- Certificate of Trade Name.
- Copies of passports for all partners, including local service agent.
- A legal, notarized agreement with the UAE national to be appointed as a local service agent.
- Partnership agreement between local partners that details capital, profit sharing, and shareholding information.
- Address and contact information.
- Tenancy contract from Land Department.
5. Obtain License:
Once you’ve submitted your civil license application and paid the necessary fees, you’ll receive your license and can begin conducting business in Dubai!
Crucial Things to Keep in Mind When Forming a Civil Company in Dubai
To get the most out of your new enterprise, you’ll want to pay special consideration to the followings:
- Your trade name must be aligned with your firm's business activity.
- Dubai allows civil businesses to have several branches, allowing you to expand or incorporate a branch of another established franchise.
- Any individual is permitted to buy or sell a civil company or branch.
- Owners are permitted to alter the legal structure of their company.
- Professionals of any nationality can engage in professional activities and form civil companies.
Let MSZ Consultancy Help Your Business Flourish
MSZ Consultancy is the perfect choice for businesses that want to improve their operations and achieve their long-term goals. We offer a range of tailored services to help businesses grow and succeed. From company formation to securing visas for yourself, your family, and your employees, we can help!
We have a team of experienced and qualified experts dedicated to help you navigate the ins and outs of UAE business so that your investments can reach their full potential.
And it doesn't matter whether you're a single investor or part of a larger established company, MSZ Consultancy has the expertise to make operating a business accessible and profitable.
Give us a call today at +971 52 544 1248 for a free quote, and let our consultant experts help you transform your business!
