LLC Company in UAE: Key Benefits, Setup Costs, and Legal Requirements

The LLC has remained a highly popular business structure among most companies in the UAE. An LLC is a business structure that puts a lid on the liabilities of owners, limiting their liability to only investment in the firm. This guide outlines the benefits and costs associated with forming an LLC company in UAE. We will also discuss legal requirements for business setup in Dubai and UAE.

What is an LLC Company in UAE?

An LLC company in UAE is a business organization. The liability of the shareholder is legally bound to the amount in which the latter owns the company. It is relatively simple and flexible to carry out the activities of business. Especially for those companies wanting to operate within the UAE market. 

Key Benefits of an LLC Company in UAE

Liability to Shareholders

LLC company in UAE is good because of limited liability to shareholders. In such liability, the assets of a shareholder are not liable to be confiscated. Moreover, his liability is only up to his share in the firm. If his business defaults on any loan, then the shareholders would not be liable to be seized beyond their invested amount.

Access to the Local Market

Access to the local UAE market is 100% for a company in LLC, in Dubai or any other emirate. This allows businesses the chance to trade services directly to the UAE population. Unlike free zone companies, LLCs are not restricted to business within a particular area.

No minimum capital requirement

No minimum capital requirement is present for opening an LLC company in UAE. This makes it low-cost for the entrepreneurs to begin a business. However, the partners and stated in the Memorandum of Association require a minimum amount of capital.

Multiple business activities allowed

An LLC Dubai company can engage itself in a large number of business activities. Besides, if one has some interest in trading, real estate, or manufacturing is enough to operate in any sector.

No corporate tax

One of the most outstanding benefits of opening an LLC Dubai is no corporate tax. This means that a corporation can invest its profits into the running of the operation of the company. This is probably going to encourage expansion and growth.

Cost for setting up an LLC Company in UAE

Some set-up costs exist when establishing an LLC company within the UAE. They might vary since they depend on an emirate and the business activities undertaken by the company. The following are some of the major expenses when creating an LLC company:

Trade Name Registration Fees

Every LLC company must have a unique name in Dubai and every other emirate. The fees may vary, though they are between AED 500 to AED 2,000 for the trade name depending on how unique and, therefore available, it is.

Business License Fee

All LLC businesses in the UAE have to acquire a business license to legally continue their operations. It may vary regarding the cost of getting a business license in Abu Dhabi, Dubai, or even Sharjah. However, it ranges from AED 10,000 to AED 15,000.

Local Sponsor Fees

Although a foreign investor may be able to achieve 100% ownership in a particular case. The UAE always has a local sponsor with a 51% shareholding in the business. An annual fee from a local sponsor can be in the range from AED 10,000 upwards to AED 25,000 per annum.

Office Rent and Utilities

An LLC company in Dubai, Abu Dhabi, or any other emirate should have an office space. An office may cost from AED 20,000 to AED 50,000 per year depending upon the location.

Legal Requirements for Establishing an LLC Company in UAE

Select a Business Activity

Certain emirates may permit some specific business activities but not others. Therefore, opt for a suitable business activity that might correspond to your business objectives.

Acquire a Trade Name

For every LLC firm in the UAE, select a trade name. It should reflect the nature of the business and should not offend or contravene the public morals or religion of the UAE.

Draft the Memorandum of Association

It describes the structure, ownership, and main business activities of the company. It needs drafting in both English and Arabic and then not notarized.

Obtaining a Local Sponsor

Many international investors need to have a local sponsor holding 51% of the company’s shares. However, business activities and locations are permitted for 100% foreign ownership.

Applying for a business license

You need to obtain the right business license from Abu Dhabi, Dubai, or another emirate. It depends upon what your business activity will entail. This would depend upon whether it was a commercial, industrial, or professional license.

Alternative Option: Sharjah Free Zone Companies

For companies that would like to have full ownership without a local sponsor. Their establishing operation in one of the free zones, such as Sharjah, is possible. In the Sharjah Free Zone companies, tax exemptions, full foreign ownership, and customs duties exemptions on imports and exports are given to the entities. On the other hand, free zone require the services of a local distributor to directly trade within the UAE market.

Why select Business Setup Experts in Dubai?

Hassle-free company formation in Dubai

Dubai business setup experts would make the process of forming a limited liability company, an LLC, in the UAE much easier for you. They can take care of all your legal paperwork and guide you regarding every regulation so you might understand all the requirements.

Advisory on Business Licensing and Regulations

Obtaining the appropriate business license in Abu Dhabi or Dubai is difficult without proper consultation. Business setup consultants in Dubai advise a client on the selection of the appropriate business license, as an LLC would be compatible with local legislation.

Access to Business Setup Experts DMCC

Provides the full process for business setup. t takes care of all your paperwork as well as finding the perfect office for you. It specializes in company formation in Dubai and guides you with everything.

Steps of Business Setup in Dubai

• Decide the Business Structure: Selection of the right structure, like a UAE LLC company, would be one of the most vital decisions. It determines the legal and operational outline of your business.
• Register the Company Name: After deciding on the business structure, you must register a unique trade name with the DED.
• Obtain Licenses: You will be required to obtain licenses needed to operate. Engaging business setup experts in Dubai will ensure the completion of all documentation correctly.
• Obtain Office Space: An LLC company in Dubai is required to have a physical address. Choose to rent a commercial office space or choose the actual office depending on the kind of business you undertake.
• Open a Corporate Bank Account: Once your company is established, you need to open an account at a corporate bank in the UAE for the management of funds.

Comparison of LLC Company Setup with Other Business Structures

An LLC Dubai company boasts numerous benefits. But still it is compared to other business structure forms, such as free zone companies, sole proprietorships, and branch offices. Here is an LLC company comparison:

LLC vs. Free Zone 

Company LLC can directly tap into the local market. However, a free zone company is strictly limited to the area of the free zone. It does, however, offer foreign ownership of 100% and tax exemptions.

LLC vs. Sole Proprietorship 

At the same time, even though establishing a sole proprietorship is much easier. It does not grant LLC companies in Dubai or any other Emirates liability protection similar to this one. Owners are personally liable in case debts occur due to such business.

LLC vs. Branch Office 

A branch office is nothing but a subsidiary of the parent company and not a separate legal entity. It might be useful for international businesses looking to enter the UAE.

Why choose Company Formation in Dubai?

Dubai is strategically ideally located as an LLC company setting place in the UAE because of strict strategic positioning, class infrastructure, and business-friendly regulations. Moreover, the city happens to be a gateway to markets in the Middle East, Asia, and Africa, making it the perfect hub for international trade.

FAQ’s

Can a foreign investor fully own an LLC company in Dubai?

Foreign investors can own full ownership of an LLC company, especially in free zones. However, a local sponsor is required, with a 51% shareholding. 

How much does it cost to get a business license in UAE for an LLC?

A business license in UAE costs between AED 10,000 and AED 15,000. However, this varies with the emirate and type of business activity.

How long does it take to set up an LLC company in UAE?

It takes about 1 to 3 weeks in order to set up an LLC company in UAE. The time frame varies with the completion of documentation and securing a business license.

Do I need a physical office for my LLC Dubai company?

Yes, for LLC Dubai, a physical office is necessary. The office has to be registered with local authorities. Moreover, one needs to provide a lease agreement while applying for the business license.