LICENSING OF ONSHORE COMPANIES (LLC – Dubai Municipality)
The basic requirement for all business activity in 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.
Some categories of businesses require approval from ministries also: for example, banks and financial institutions from the Central Bank of the UAE; manufacturing from the Ministry of Finance and Industry; and pharmaceutical and medical products from the Ministry of Health; branch of foreign company from the ministry of Economy and Commerce. More detailed procedures apply to businesses engaged in oil or gas production and related industries.
For each of the above specialist activities we have at your disposal a core team of specialists that have a proven track record in each and every speciality.
Fifty-one per cent participation by UAE nationals is the general requirement for all UAE offshore company formations except:
- Where the law requires 100% local ownershiP
- In the Free Trade Zones where 100% foreign ownership is permitted
- In activities open to 100% AGCC ownership
- Where wholly owned AGCC companies enter into partnership with UAE nationals
- In respect of foreign companies registering branches or a representative office in Dubai
- In professional or artisan companies where 100% foreign ownership is permitted.
PROCEDURES GOVERNING THE OPERATIONS OF FOREIGN BUSINESS INTERESTS
In practice, Dubai company formation procedures are similar to the general system other emirates follow, whereby foreign owned offshore companies operated in one of three ways: with a local sponsor, through a partnership with a UAE national or company, or through a private limited company or public shareholding company incorporated by Ruler's decree. Since 1984, steps have been taken to introduce a codified company law applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the "Commercial Companies Law" - and its by-laws have been issued. In broad terms the provisions of the Law are as follows:
The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and offshore company incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.