Legal structures for Setting up Business in UAE

The Federal Law stipulates a total local equity of at least 51% in any commercial company & defines 7 categories of company organisation, which can be established in the UAE. It sets out the requirements in relation to shareholders, directors, minimum capital levels and incorporation procedures. The 7 categories of types of companies defined by the Act are:

• General partnership company
• Partnership-en-commendam
• Joint venture company
• Public shareholding company
• Private shareholding company
• Limited liability company (LLC)
• Share partnership company

Of these 7 activities, LLC are more frequently used by foreign investors.

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Apart from these 7 categories, foreign direct investment is encouraged through branches & representative offices of foreign companies & 100% foreign-owned retail businesses. 100% foreign ownership is allowed in free trade zones as well.

Dubai Business Licensing

The basic requirement for all businesses in the UAE is one of the following three categories of licenses:

• Commercial licenses covering all kinds of trading activity
• Professional licenses covering professions, services, craftsmen and artisans
• Industrial licenses for establishing industrial or manufacturing activity

Licenses for most of the activities are directly issued by the licencing authority of the Department of Economic Development, Dubai.

However certain activities require special approval from the related ministry /department (for e.g.: medical pharmacy etc - Ministry of health : air transport. air cargo etc - Dept of civil aviation , Financial institutions, Banks, money exchange etc - Central bank , New industrial project, expansion - Ministry of finance and industry , Publishing, printing, newspaper, advertising, video film, photography etc - Ministry of information, education, training etc - Ministry of education , agriculture, veterinary etc - Ministry of agriculture , customs clearance, fright forwarding sea cargo etc - Seaports and customs authority , telecommunication equipment- Ministry of communication , branch of foreign company, insurance company, chartered accountants firm etc- Ministry of economy , legal consultancy - Rulers office, engineering and constructing etc.. - Municipality.