Mainland companies are registered under the Economic Department of each Emirate. Mainland company registration mandates association with a UAE national either as a partner or as an agent, (depending on the nature of the business activity and the legal structure of the company). In most cases, the office is also to be leased to process the license (exceptions are granted in some special cases).
Under mainland company registration the following are the major legal structures to register a company.
A Company with a single shareholder. The shareholder could be a UAE national, an expatriate, or a corporate firm. If the shareholder is an expatriate a UAE national should be appointed as an agent. The agent won’t have any stakes in the company and his role is to offer assistance in the administrative procedures of various departments.
A limited Liability Company
is a company structure wherein the shareholders are liable only to the extent
of their respective shareholding in the capital. The majority shareholding
(Minimum 51%) should be allotted to a UAE national and the remaining 49% could
be owned by expatriates. Major commercial and industrial activities are
registered in this format.
As per the Federal Decree-Law, No 26 of 2020 amending the provisions of Federal Law No 2 of 2015 on Commercial Companies foreign nationals would be allowed to own 100 % shareholding of commercial companies within the country eliminating the need for a UAE National to hold the majority share. The amended legislation came into effect on 1st June 2021. As per the new regulations, a business with a minimum of one and a maximum of fifty people can be set up where their liabilities remain to their share within the firm’s capital. As per the new Decree, foreign nationals can own 100% share in the company.
According to the updated commercial company’s law of 2015, a limited liability company could be formed with a single shareholder- the shareholder should be either UAE national or GCC national.
A professional firm or a Civil Company is a partnership company between partners of different nationalities with professional activities like Chartered Accountants, Management Consultancies, Legal Consultancies, etc. The main condition is that the owner should have a professional degree in the respective field and should have relevant experience in that field. In the case of non-UAE and GCC national partners, a UAE national should be appointed as a service agent of the company.
International companies can register their branches and conduct their business. The trade name shall be of the parent company. UAE national should be appointed as a local service agent. The local agent must be either an Emirati Citizen or a 100% Emirati-owned company. A branch will be owned 100% by the parent company overseas and the registration requires authenticated documents from the parent company including board resolution. Branch offices are only allowed to offer parent company products and services. Branch offices in Dubai/ UAE are exempt from tax in UAE and can enjoy 100% tax benefit.
Foreign companies can open their representative offices in UAE. A representative office can only market and promote the services of the parent company in UAE and shouldn’t practice the business activity of the parent company in UAE. They can undertake marketing and promotional activities on the parent company’s product on behalf of the parent company. A representative office shall be owned by the parent company and it needs a UAE national as a local service agent.
Companies can form branches
in different Emirates.
Stepping Stones team of experts helps clients in every aspect of Company Formation in UAE and assists you to obtain all the benefits of doing business in the United Arab Emirates.
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