Registration of company in the UAE — types of companies and licenses

Those who decided to register a company in the Arab Emirates need to choose company type and license type most suitable for a certain business. This article describes types of companies and licenses available when establishing business in the UAE.

Registration of a company in the UAE — types of companies

There are three main types of companies in the UAE:

  • local company– activity can be performed throughout the entire UAE territory, but a local partner needs to be given 51% of shares;
  • company in one of free zones– in such a case a local partner is not required; business can be performed in a free zone and worldwide, but it is prohibited to make business in the Arab Emirates outside a free zone;
  • offshore company– in such a case your company in the UAE will only be present legally; performing activity will be made outside the emirates in other country, because offshore companies may not operate even in a free zone.

Free trade zone or free economic zone (FTZ), or a free zone is a limited district in the emirates that is a separate jurisdiction from the UAE. Within FTZ, companies can be registered. Each free zone of the UAE defines its own rules governing the operation of companies.

The UAE have already established more than forty different FTZ.

Types of licenses when registering a company in the UAE

Obtaining a license is a mandatory requirement to make business in the Arab Emirates. Licensing of a company may take place as on state level, so as on a level of certain emirate. Depending on what region you have selected for opening a company, you will need to prepare a certain set of documents. This procedure varies a bit in each emirate; therefore you need to verify the exact set of documents and the algorithm of the procedure in advance.

Apart from a license, you might need permission from a profile UAE authority. If you plan to open a drugstore, you will need to address the Ministry of Healthcare; if you plan to deal with manufacturing, you will need to address the Ministry of Industry; if you decided to open a company dealing with financial services, then the Central Bank, etc.

After you have decided on activity you will be dealing with, you may choose one of the following types of licenses:

  • commercial;
  • professional;
  • manufacturing.

The process of license obtaining takes around 7 days. if it is a standard license, then obtaining can shrink down to 3-5 days. The price of obtaining such license is approximately 10 – 20 thousand dirham (2725 – 5450 dollars).Obtaining some licenses takes more time and costs more.

Manufacturing license in the Arab Emirates

This type of license is available for companies which activity is related to manufacturing – plants, fabrics dealing with production of some goods. Registration of this type of company can be made in a free zone or outside (in this case, with attraction of a local partner).

Commercial license in the Arab Emirates

This type of license is suitable for those who plan to trade. If you plan to deal with a certain group of items, you may file an application for obtaining a commercial license. If you plan to sell goods of mass consumption, then it is better to obtain a general trade license that includes all groups of items altogether.

Professional license in the Arab Emirates

This type of license is suitable for those who plan to provide specialized services, for example:

  • hairdressing services;
  • consulting;
  • handcrafts;
  • technical services;
  • publishing;
  • carpenter services;
  • medical services;
  • other specialized services.

This type of license is suitable for any company dealing with provision of services. Non-residents may own such company for 100%.

If you want to remain the sole owner of a local company and you have chose the appropriate organizational-legal form and the license allowing 100% owning for non-residents, you will still need a local partner who will be an intermediate between the state machine and you; he will not perform managerial functions. You need such a partner to obtain consultations in the Ministry of Labor, to open resident visas for employees, etc.

Term of validity of a license is one year; therefore, you need to update a license annually. Penalty is provided for an outdated license. Usually this is a monetary penalty, but it can also happen that the government requests to close all accounts and stop operating in the territory of the UAE.

Registration of company in the UAE – another service offered by us!

Investor resident visa of the UAE

Visa UAE for an investor can be obtained after registration of a company in the emirates. A resident visa UAE for an investor is issued for 3 years with an option for prolongation for next three years any number of times. It is necessary to arrive in the UAE at least one in every 180 days. Annual fees should be paid for prolongation of an opened company through which UAE resident visa was executed.

Meanwhile, present or absent business activity des not anyhow influences the prolongation of a UAE visa.

Visa UAE for registration of company in the UAE!

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