Dubai’s business landscape is experiencing remarkable growth and diversification. The emirate has successfully positioned itself as a global business and tourism hub, attracting a multitude of industries and sectors. From finance and technology to hospitality and logistics, Dubai offers a fertile ground for businesses to flourish and expand their operations. The city’s strategic location, state-of-the-art infrastructure, and pro-business policies make it an ideal destination for entrepreneurs looking to tap into the Middle East market and beyond.
Foreign investors seeking to establish a mainland company in the UAE traditionally faced certain restrictions when it came to ownership. However, recent legislative changes have opened doors for 100% foreign ownership in mainland activities in specific sectors. These reforms, facilitated through the issuance of the “Positive List,” provide an opportunity for foreign investors to have full control over their businesses without the need for a local partner and to explore a wider range of business sectors. In addition, the merger of Dubai Economy and Dubai Tourism into the Dubai Department of Economy and Tourism (DET) has facilitated the ease of doing business in Dubai. The integration of services and expertise from both departments will offer a comprehensive and streamlined experience that will simplify business registration and tourism promotion and provide a single point of contact for foreign investors to access business services.
What is the DET’s role?
The Dubai Department of Economy and Tourism, comprising the Dubai Department of Economic Development (DED) and Dubai Tourism, has a broad range of responsibilities aimed at promoting economic growth and supporting the tourism sector in Dubai. This includes overseeing business registration and licensing processes, facilitating a favourable business environment and formulating economic development strategies. The department provides vital support and services to investors, ensuring compliance with regulations and fostering a transparent business landscape. The most commonly used corporate vehicle for businesses established through the Dubai Department of Economy and Tourism is the Limited Liability Company (LLC).
100% foreign ownership
Previously, expatriate business investors were unable to establish a 100% foreign owned company in the UAE, instead being limited to a 49% shareholding with the remaining 51% belonging to a UAE national local sponsor or corporate nominee.
The issuance of Commercial Companies Federal Decree-Law no.32 on 1st June 2021 removed this restriction and has allowed foreign investors to own 100% of mainland companies in the UAE for the majority of business activities.
This has significantly enhanced the ease of doing business, eliminating the requirement for a local partner and enabling foreign investors to have complete control over their ventures.
Why choose an onshore LLC?
The LLC structure is highly flexible and well-suited for foreign investors. It allows for various licence types, including professional, commercial, and industrial licences, depending on the nature of the business activity, meaning that a wide range of sectors and industries can operate as LLCs. A key feature of an LLC is limited liability protection, which safeguards the personal assets of the company’s owners or shareholders. This means that in the event of financial liabilities or legal disputes, the personal assets of the investors are generally protected, limiting their financial risk to their investment in the company.
Another important aspect of the LLC structure is the flexibility it offers in terms of management and ownership. An LLC can have between 2 and 50 shareholders, and they can be individuals or corporate entities. This flexibility allows foreign investors to have control over the management and operation of their businesses while accommodating their unique requirements and strategies.
The main advantage of an onshore LLC over the same business structure in a free zone is that it allows you to have a physical presence and operate in the local Dubai market,including the ability to do business with mainland companies, government entities, and residents. This provides broader market opportunities and potential access to a larger customer base than is available with a free zone LLC. An onshore LLC also allows for a much wider range of business activities and the freedom to choose the best area that aligns with your target market, industry requirements, or proximity to suppliers and customers.
What documents are required to set up an LLC in Dubai?
To set up an LLC in Dubai, the following documents and requirements are typically needed:
- Application Form: A completed application form for company registration, which can be obtained from the Dubai Department of Economy and Tourism.
- Trade Name Reservation: A reserved trade name for the company, which can be done through the Dubai Department of Economy and Tourism or the relevant free zone authority.
- Memorandum of Association (MOA): A draft MOA detailing the company’s activities, capital, and ownership structure. This document must be notarised by a notary public.
- Shareholders’ Passport Copies: Copies of the passports of all shareholders, including foreign shareholders. The passport copies must be valid and include a residency visa page (if applicable).
- Shareholders’ Identification Documents: Emirates ID (Emirates Identity Card) copies for UAE national shareholders or residence visa copies for foreign shareholders.
- Office Lease Agreement: A copy of the lease agreement for the company’s office space in Dubai. The office location must comply with the relevant regulations and requirements.
- Bank Reference Letter: A bank reference letter for each shareholder, attesting to their financial status and good standing.
- NOC from Sponsor (if applicable): For foreign investors working in the UAE under a sponsor’s visa, a No Objection Certificate (NOC) from the sponsor is required to establish a business.
- Additional Licenses (if applicable): Depending on the nature of the business activities, additional licences or approvals from relevant authorities may be required. For example, businesses in specific sectors such as healthcare, food, or financial services may require additional permits.
How can Global Link help?
Global Link has over 16 years’ experience working with local and global businesses, providing bespoke consultancy services for company incorporation in Dubai and the wider UAE.
We can provide guidance on setting up an onshore LLC with the DET, helping you to prepare all necessary documentation and liaising with government authorities on your behalf to ensure a swift and seamless setup.
If you need advice on this or any other company incorporation, visa or PRO service, please get in touch with us on +971 4 553 9901 or email us at [email protected] and we will be happy to assist you.