Mainland Company UAE Locations
The legal systems that oversee each of the seven emirates that comprise the United Arab
Emirates are unique. The Department of Economic Development oversees the creation of
new businesses in Abu Dhabi and Dubai. On the Dubai mainland as well as in the United
Arab Emirates, we can offer you advice on where to open a business. The expenses incurred
in starting a business might vary, and depending on the situation, it may be more cost-
effective to locate your company in Sharjah, which is only 40 kilometers from Dubai. On a
good day, it just takes 20 minutes to travel between these two cities. During busy hours, it
can take a maximum of two hours. This is still a strong justification for setting up shop in
Sharjah.
In the UAE, mainland companies can be formed under several different types, each catering
to specific business needs and activities. Here are the primary types of mainland companies:
Sole Proprietorship
Civil Company
Limited Liability Company
Branch Office
Representative Office
Sole proprietorship in Dubai
Sole proprietorship in Dubai can be set up by both foreign and local citizens in the Emirate.
Establishing a sole proprietorship in Dubai requires a UAE national or national of the GCC.
Foreign entrepreneurs who wish to open sole establishments in Dubai will require a local
sponsor with a residence permit. In such case, the sponsor can be Dubai Company or
national.
Key steps to setting up an Establishment or Sole Proprietorship in UAE
created 100% UAE-owed LLCs fully managed and controlled through power of attorneys or
similar legal agreements. Such companies act as LSA.
The documents required for registration and approval will include,
- Shareholder passport copy
- UAE resident visa copy, if necessary
- NOC certificate from current resident visa sponsor
- Proof of educational qualification, professional experience
- General manager passport copy
Advantages of a Sole Proprietorship in UAE or an Establishment
- The foreign professionals retain complete ownership in the business.
- Companies can legally practice professional services anywhere in UAE, including the free zones.
- Choose your location where the company can rent or buy office premises
- The UAE government has waived the paid up capital requirements.
Civil Partnership Firm
A civil partnership firm in the United Arab Emirates, commonly referred to as a professional
corporation, is regulated by the UAE Civil Code and Local Order No. 63 of 1991 (replaced by
Law No. 13 of 2011). It is appropriate for service-related or professional activities. These
companies are usually established by two or more people who, unless otherwise specified in
the Civil Partnership Agreement, which needs to be executed in front of a Notary Public of
the Dubai Court, are jointly accountable for all losses and debts. Professionals like doctors,
architects, engineers, and lawyers commonly form civil partnerships to set up their
companies. These firms are 100% owned by the partners, except in certain fields like
engineering and defense, where at least one partner must be an Emirati with a minimum
51% share and relevant qualifications and experience. The minimum number of partners is
two, and the maximum is 50. Some fields allow 100% foreign ownership. A partner can be a
foreign company, provided it operates in the same field, but a UAE-incorporated company
cannot be a partner.
A Local Service Agent, who is a UAE national, is required for all civil companies on the
mainland. The agent does not hold any stake but is paid a fee for services such as facilitating
the issuance of residence visas and work permits and handling the renewal of professional
licenses.
A civil company is not a Limited Liability Company (LLC) but is preferred by many because
there is no limit to the number of visas that can be issued, provided sufficient office space is
available. Generally, 100 square feet of office space is required for each additional visa.
However, there are restrictions on the number of managers a civil company can have. This
structure is preferred by professionals and small to large organizations for setting up their
companies on the mainland.
LLC Company Formation
Limited Liability Company (LLC) offers a flexible business structure that combines the
advantages of a corporation and a partnership. It provides limited liability protection to its
owners while allowing for a simplified management structure and pass-through taxation. In
its simplest definition, a Limited Liability Company (LLC) is a business venture which is
commercial in nature with a maximum of 50 shareholders. LLC is the easiest legal vehicle for
expatriate residents and foreigners to set up a new company in the UAE. Unsurprisingly, it is
also the most popular and commonly chosen route.
Opening an LLC with ADAM Global is a streamlined process. Our expert consultants guide
you through the steps, starting with selecting a suitable trade name and determining the
business activities. We assist in preparing the necessary documentation, obtaining approvals
from relevant authorities, and ensuring compliance with UAE regulations. With our
comprehensive support, the process of LLC company formation becomes efficient and
hassle-free.
Process for LLC Company Registration
LLC company formation in Dubai follows a simple, systematic process:
- Identify a business activity
- Register the trade name
- Apply for initial approvals
- Draft Memorandum of Association (MoA) and other agreements
- Select a location, choose a workspace
- Apply for other government approvals
- Submit documents and pay fees
Key advantages of LLC Company Formation
- Flexibility in number of shareholders,
- Liability of each shareholder limited to his/her shares in the company’s capital
- Ability to trade anywhere in the UAE (including 50 plus free zones) and the GCC region
- Unlimited number of work visas
- Multiple choices in renting or buying office premises
- 100% ownership by foreign shareholders
Branch Office
The branch office of a foreign company can be 100% owned by the parent company. The
branch office doesn’t have a unique legal identity as that of its parent company. So the
name of the branch office will be similar, if not identical, to that of parent company. The
branch is an extension of the parent company headquartered outside the United Arab
Emirates and must have a trade license for the business activities carried out in the UAE.
Since the ownership of the branch office belongs to the parent company, the branch should
also be registered as a company with the same name. The purpose of a branch office of a
foreign company is to promote the products and services of the parent company, so it is
essential that the branch office carries out the same business activity – or part of it – as that
of the parent company.
Set Up a Branch Office in UAE
- Appoint a Local Service Agent (LSA) to coordinate with government agencies and secure necessary approvals.
- Decide on a trade name, if the company's name has already been registered by another entity in the UAE.
- Submit an application to the Ministry of Economy detailing the company's head office, business, commercial activity, and General Manager's credentials.
- The Ministry of Economy issues an approval letter for the Department of Economic Development in the emirate, based on the proposed branch office location.
- Submit a lease agreement, UAE auditor's statement, and financial statements for the past two years.
- A one-year Commercial License is issued by the Department of Economic Development.
- Open a bank account in the UAE, but be aware of strict anti-money laundering regulations.
- Translate and attest foreign company documents for legal use.
- Submit details of those holding more than a 5% stake in the company.
Representative Office
A representative office supports the parent company's goods and services in the local
market or serves as a regional administrative office. Such imports and transactions are
prohibited for the Representative Office. It is noteworthy that a Representative Office is not
permitted to utilize credit facilities in addition to the aforementioned restriction. It may,
however, keep a bank account to cover its local expenses.
Foreign corporations, including those entirely owned by non-UAE nationals, are permitted
to establish a Representative Office in the United Arab Emirates under UAE Federal Law No.
2 of 2015 on Commercial corporations.
The primary distinction is the Branch Office's ability to conduct business in the United Arab
Emirates. A Representative Office is required to delegate all business matters to its parent
company. Put simply, a Representative Office isn't permitted to make money. It may,
nevertheless, keep a bank account for its running costs. Thus, there will never be any cash
left over at the conclusion of the fiscal year. This is the distinction between a Branch Office
and a Representative Office. A Branch Office, on the other hand, may have a positive cash
balance at the conclusion of the fiscal year since it is permitted to operate and become
profitable.
Establish a Representative Office in the UAE
- Obtaining a Local Service Agent: The Local Service Agent must be an Emirati or a company incorporated in the UAE and 100% owned by Emiratis.
- The Agent represents the company before all Government agencies and is paid a fee.
- Trade name: The Representative Office should have the same name as the parent company, but may face issues if the name is already registered or not permitted.
- Application to the Ministry of the Economy: The Local Service Agent submits an application detailing the parent company's business activities and global headquarters address.
- Approval Letter: The Ministry of Economy reviews the application and issues an Approval Letter for the Department of Economic Development.
- Lease Agreement: The Local Service Agent submits a lease agreement for the commercial space and audited financial statements of the parent company for the past two years.
- Business License: The Department of Economic Development issues a Business License and the Bank Account opens.
- Additional paperwork: The bank may require additional documentation, such as the company structure and details of those holding more than 5% stake in the company.
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