Registration of a “local” company in the UAE (company outside free zones) – from 2,740 USD

We offer you a service of assisted registration of a ”local” (or mainland) company in the UAE. “Local” companies in the UAE mean companies registered outside free trade zones.

To perform economic activity in the internal market in the UAE, registration of a “local” commercial company is necessary.

The most popular form of a company among “local” companies is the form similar to the “limited liability company” (OOO). Such form of а company in the UAE is called “Limited Liability Company”, briefly – “LLC”.

Benefits of the emirate Dubai when making business

Dubai has the most developed sectors of financial services in the region. Banks of the UAE have a high level of capitalization and offer a wide range of financial services and services for private business in this region.

Of all emirates, particularly in Dubai the sphere of state services is the most clear and fast-operating.

Dubai has a contemporary road network, top-class airports, high-quality infrastructure and state-supported services, which allows making business in the region safe, easy and lucrative.

The UAE are the recognized regional leader in the sphere of protection of intellectual property rights. Methods of applications of copyright, rules for using trademarks, and patent legislation are constantly developing, so that they would correspond to development of technologies and prevent high-technological illegal activity.

Dubai has a reputation of an investment citadel and wealth generator. The city was acknowledged as the most wanted place in the Middle East for regional headquarters of transnational companies.

The UAE are the member of the World Trade Organization and always aim to eliminate barriers for foreign investments. Registration of business and obtaining licenses outside free zones are regulated by the Department of Economic Development (DED), which set three most important goals:

• Maximum promotion of the concept of the Dubai Government and development of different economic sectors.
• Preparation of competitive investing climate for attraction of local and foreign investors and organization of business sectors according to the best practices.
• Provision of best financial, human and technical resources and favorable environment for creativity and perfection.

Benefits of registration of “local” companies in the UAE in the form “Limited Liability Company”

• Responsibility of company founders is limited. A founder of a “Limited Liability Company” is liable not with his entire property, but only with his share of the company capital. Liabilities of a company are separated from personal assets of founders.
• “Local” company in the form of “LLC” can perform activity as in the territory of the UAE, so as abroad, if not prohibited by constitutive documents of a company.
• A company of the form “LLC” does not presume public issue of shares. This guarantees investors and local partners that they will always have a full control over a company.
• Possibility of working in the internal market of the UAE and access to regional markets.
• A company must have a “local” shareholder (“local” partner- citizen of the UAE), who must own at least 51% of company shares. Meanwhile, profit and loss of a company can be divided in proportion not corresponding to distribution of shares of shareholders in company capital. This means that despite a foreign partner is limited by share of 49%, he may receive 100% of profit.
• Foreign owners of a company and their family members can obtain investor visas of the UAE.
• Daily participation of a “local” partner (citizen of the UAE) is not necessary.
• A company has practically no limitations in types of activity. A company “LLC” may not perform banking activity, insurance activity, and may not deal with investing in benefit of the third parties.
• Easy opening of local and foreign bank accounts.
• Upon registration of a company “LLC”, opening branches is also possible.
• Capital and assets of a company operate particularly in the name of a company, not in the name of shareholders.

Peculiarities of registration of “local” companies in the UAE

In the UAE, it is possible to register figuratively three types of companies: offshore companies, companies in free zones and so called “local” companies.

Previously, all the attention was brought to offshore companies and companies registered in free zones. Possibility of 100% ownership of a company for non-residents and easy opening of accounts made them the most attractive. At the same time, “local” companies presumed presence of a “local” (citizen of the UAE), who should own a share of 51%, and an office was necessary, which led to extra expenses… Therefore, nobody saw any sense in registration of “local” companies.

Nevertheless, as time passed banks began to toughen requirements to companies that wanted to open accounts — there appeared requirements to availability of visa in owner of a company / manager of an account; for offshores requirements stiffened to amounts of average monthly balance, and some banks stopped to open accounts for offshore companies. Many banks started to require presence of a real office for trade companies, while free zones of the Northern emirates began to be considered high-risky.

This all made business seeking new solutions and variants of work. The solution was the “blast from the past” – “local” companies.

Let us review the most frequent questions and explain in what cases it is reasonable to select particularly local companies.

Is a “local” necessary for a “local” company? Yes. If it is a commercial company, then at least 51% of company shares must be owned by citizens of the UAE, or by a company fully owned by citizens of the UAE.

Should a “local” own 51% of a company? It depends on what type of a company will be registered. It is possible to register so called “commercial”, “professional” and “industrial” companies. The most popular are the first two types. “Commercial” – trade company that may be only in the form of “LLC”, where a local shareholder must own 51%. “Professional” – mostly companies that provide professional services. Such companies can be registered in the form of “Sole Establishment” (1 shareholder) or “Civil Company” (2 or more shareholders). For such companies a “local” citizen is only required as an agent – i.e. he will not own a share of a company.

If an “LLC” company is registered, can a “local” take a company by his own? No. This is prohibited by the law. In some cases, when other shareholders are unavailable during 6 months upon expiry of the license, a local citizen may start the procedure of company liquidation.

Can a “local” play mean tricks on a company? He may play minor mean tricks – does not issue power of attorney for “labor” and does not issue “e-signature card” (this is necessary when obtaining visas for employees of a company, investors do not need this).He also may delay or suddenly postpone a meeting where documents were to be signed for operation of a company; he may leave for a trip without a notice.

So what can be done? How to secure oneself? The main rule that was elaborated and verified by years of practice is to work only with “professional sponsors” — these are people who make living particularly by providing their services as a local sponsor / agent. Their income depends directly on the number of customers. Moreover, it is preferable to work with a local who will be recommended by a consultant, as consulting companies are interested that customers had no problems with a company, and will offer the optimum checked and reliable “locals”. Sometimes it turns out that services of such a sponsor will be a little more expensive than of any contact offering himself as a “local”, but in such case it is more appropriate to pay more to avoid further “pain in the arse”.

What is needed for registration of a company? It is necessary to book name and file an application for initial approval. For this purpose, copies of passports, visas and “Emirates IDs” of all shareholders and manager of a company, as well as no objection certificate (“NOC”) from active sponsor, are necessary.

Any extra permits necessary for registration of a company? Yes. For some special types of activity permits from third-party bodies are necessary. Also, since February 2018 for most consulting types of activity a manager should pass the “Management Skills Placement Test” in the “American University of Dubai”. Only after successful passing of the test documents for obtaining the “initial approval” will be run into operation.

Is an office necessary? Upon obtaining of permit for registration of a company, it is necessary to sign the office rental agreement. Currently, office rental in a business center is allowed, which significantly reduces the total cost of company registration. As of today, the cost of office in a business center starts from 1,000 dollars per year.

We help with office rental in the UAE!

How soon after office rental will be the business license ready? After all the documents – rental agreement, signed articles of association, document on name booking and “initial approval” are submitted, the registrar issues the invoice for payment of company registration. Upon payment, the license and the articles of association of the company will be immediately printed out.

What is necessary for obtaining UAE visas by shareholders of a company? It is necessary to execute an immigration card of a company. For this purpose, license, articles of association and original “Emirates IDs” of all shareholders of a company are necessary. Cost of execution of an immigration cards is 160 dollars. If required, access to the system “e-channel” can also be executed – this is extra 1,100 dollars. Upon issuance of an immigration card, an investor visa can be obtained. Cost of visa – approximately 825 dollars (application for obtaining the “entry permit” and further sticking-in). Currently, a deposit in amount of 2,740 dollars for each investor visa IS NOT NECESSARY.

Therefore, we can see that currently registration of a local company became much simpler and cheaper. From the point of banks, a local company is the most preferable one for opening an account.

Limitations in “local” companies “LLC” in the UAE

Limitations regarding foreign participation when registering a company in the UAE in the form of “local” company “LLC”

A “local” company “LLC” should have no more than 50 shareholders (who are also called “partners”). A company may be owned either by natural persons or legal entities.

Meanwhile, at least 51% of shares must be owned by “local” partners, who can be citizens of the UAE, or owned by a company, which all owners are citizens of the UAE. Therefore, non-residents may not own more than 49% of shares of a “local” company in the form of “Limited Liability Company”.

This limitation cannot be avoided after registration of a company, as any transfer of shares where “local” partners obtain as result less than 51% of company capital will be considered invalid.

We will select for you a reliable partner-citizen of the UAE, who will not interfere with company management, and whom you will not have to give company profit (instead, such partner will be paid a moderate annual reward) and who will issue the power of attorney for dealing with all issues related to working of company employees.

Most companies “LLC” use a “local” partner (also called a “local” sponsor) as a “sleeping sponsor”, who is just paid annual reward for he fully transfers management of a company to a foreign investor and does not participate in distribution of company profit.

Limitations in types of activity when registering a company in the UAE in the form of “local” company “LLC”

Registered in the UAE “local” companies in the form of “Limited Liability Company” may not perform bank or insurance activity; such activity can be performed by “local” companies in the form of “Public Joint Stock Company” (analogy with public limited companies).Moreover, companies “LLC” may not deal with investing in benefit of third parties.

Operation rules for ‘local” companies “Limited Liability Company” in the UAE

Business licenses and permits for “local” companies registered in the UAE

Before starting operation in the territory of the UAE, a “local” company “LLC” should obtain all necessary permits and business licenses that are required for such activity.

“Local” company registered in the UAE must have an address

A «local» company of the form «LLC» must have an address in the UAE. At the same time, it should be mentioned that ordinary letters (from bank and other organizations) will be delivered to the postbox of the company – we help to execute such postbox or provide for lease postbox of our company.

Name of a “local” company registered in the UAE

A «local» company of the form «LLC» must have a trade name. Such name cannot be previously registered by anyone, should not breach public rules, and should not be alike to confusion with other names which may lead to mistakes. A company name should be related to purposes of a company, or to name of one or more partners. For commercial companies, at the end of name the LLC abbreviation will be added.

Managing a “local” company registered in the UAE

A company may have only one manager, whose name will be stated in a license. A manager is viewed by official bodies of the UAE as a person who performs daily management of company deals. Meanwhile, for dealing with serious issues (e.g., opening a bank account or issue of a power of attorney), resolution of shareholders of a company is required.

Bookkeeping account in “local” companies registered in the UAE

Each “local” company “LLC” should do the bookkeeping accounting. A company should select an auditor who must make an audit report every year.

Bookkeeping account in the UAE –another service offered by us!

You may also address us to obtain the Tax Domicile certificate of the UAE for a company.

Process of registration of a “local” company in the UAE

Process of registration of a “local” company in the UAE in the form of “Limited Liability Company” includes the following:

• Registration of a trade name of a company. We help to select a name of a company, and also to check if it was booked by anyone.
• Submitting an application for obtaining a business license in the Department of Economic Development (“DED”).We help with preparation and submission of an application in the “DED”.
• Obtaining an initial approval of registration with the selected activity.
• Notarizing the Memorandum.
• Renting an office and verifying its location. We help to prepare documents necessary for rent.
• Paying the fee and obtaining the license in the Department of Economic Development. We can pay the fee and obtain the business license in your name.

Documents necessary for registration of a ‘local” company in the UAE in the form of “LLC”

Documents necessary for obtaining initial approval when registering a “local” company in the UAE

• To obtain approval of booking of a trade name, an application for booking a trade name should be filed, having provided at least three variants of a name. After one of three names is approved, an approval of trade name booking is issued. This approval should be submitted together with an application for initial approval of registration of a company.
• Then an application for registration of a company must be completed.
• Copy of an applicant’s passport.
• “Emirates ID” is required from a sponsor.
• Copy of passport of a manager/director.
• If an applicant is a legal entity, then the Board of Directors of this legal entity should provide the decision to register a “local” company in the UAE i the form of “LLC”.

Documents necessary for further process of registration of a “local” company in the UAE after obtaining the initial approval

• Verification of initial approval of registration of a company.
• Approval of booking of a trade name of a company.
• Application for registration of a company.
• Copy of an applicant’s passport.
• “Emirates ID” is required from a sponsor.
• Copy of passport of a manager/director.
• Documents on office rental. A requirement on a minimum office area must be fulfilled. We can help to select and rent suitable premises.
• Copy of Memorandum of Association of a newly established company.
• If an applicant is a legal entity, a notarized copy of certificate of registration of a parent company is necessary.

Price of registration of a company in the UAE in the form of “LLC”

How to start the process of registration of a “local” company in the UAE?

Please contact us at [email protected] and we will professionally advise you on issues of registration of a “local” company in the UAE.

If for registration of a company a local sponsor is necessary, we will offer qualified persons who are ready to become your local partners.

We help with execution of necessary documents and approvals. By ordering our services, you may be sure that you have all the necessary documents on hand and completed in a proper way. Our specialists know the local mentality perfectly and have experience of working with local authorities, which makes the process of company registration maximum simple and prompt.

Upon registration of a “local” company in the UAE we will offer you extra support and services of bookkeeping, so that to simplify your business life. We also provide services on opening bank accounts in the UAE.

Feel free to contact us for registration of a “local” company in the UAE at [email protected] right now!