It is a federal law in the UAE that all foreign investors have a local sponsor in order to do business in Dubai Mainland. The local sponsor will have 51% shares in the company. The law also states the legal business categories that can be registered in Dubai. There are six different types of legal forms you can choose from for your business:
1) Sole Establishment
This company type is operated by one individual. The sole proprietor will have complete control of the company’s operations and will completely bare the profits and losses of the company. The individual will be fully liable for any debts or obligations that come along with the company.
2) One Person Company
This company is where one person or corporate owns the entire capital. The name of the company has to be connected to the name of the owner. Only GCC nationals are allowed to establish this company type.
3) Civil Company
A civil company offers 100% foreign ownership and full access to UAE’s local market. This type of company is usually set up by investors who provide services like doctors, lawyers, engineers, accountants, and consultants.
4) Limited Liability Company (LLC)
This is the most common type of legal setup for companies in Dubai. Industrial, commercial, professional, and even tourism companies can be carried out under an LLC. With this business type, there have to be between 2-50 shareholders. 51% of the shares should be owned by a UAE national or a local sponsor.
5) Branch of a Foreign Company
A branch of a foreign company has to operate under the name of the parent company and provide the same services as the parent company. These services can include professional activities with commercial and industrial activities.
6) Representative Office
This type of company isn’t a business structure of its own, it’s basically a foreign branch that can conduct promotion of its products and services. Representative offices in Dubai can carry out commercial activities of the parent company.