UAE has been making headlines lately thanks to its most recent achievement, which places it among the most sought-after places to live, work, and invest. The UAE has become the talk of every foreign investor today thanks to timely planned economic diversification projects, rising FDI inflows, accelerating GDP, and internationally recognized business-friendly company set up laws in Dubai.
UAE promotes unique business activities within its specialized jurisdictions as a business powerhouse rich in investment opportunities and first-rate facilities. UAE facilitates various legal forms to aid in the establishment, growth, and prosperity of businesses because every company requires a special structure to be incorporated. In this blog, we are going to highlight the categories of Company Setup in Dubai.
Different Categories of Company Setup in Dubai
Various types of Company setups in Dubai are as follows-
1. Sole Proprietorship
A sole proprietorship is a business that is entirely owned and operated by one person, who also owns all the company’s profits. Similar to this, the owner will be responsible for any debts or financial obligations. Even though most business activities can be conducted under such legal structures, a sole proprietorship must first abide by a few general guidelines.
- A sole proprietorship of the professional type can be owned by a person of any nationality.
- A sole proprietorship that is commercial or industrial can only be owned by citizens of the UAE and the GCC, and it must be owned fully.
2. Civil Company
In the UAE, people in recognized professions like law enforcement, accounting, medicine, and surgery can establish a civil company. The activities permitted for a civil company can only be those of professional businesses because the company can have partners who own 100% of the shares. More precisely, such activities are described as being either physical or intellectual and being carried out by one or more natural persons with respect to a specified capital. A few guidelines must be followed for incorporation in order to open a civil company.
3. Limited Liability Company
One of the most popular ways to register a business in the UAE is as an LLC. It allows a minimum of 2 and a maximum of 50 shareholders to participate and can only be accountable for their individual shares while sharing in the profits and losses equally. Moreover, LLCs can engage in any commercial or industrial business activity within the jurisdiction. Excluding professional services and the banking sector.
4. Private Shareholding Company
A minimum partnership of AED 2,000,000 from at least three investors can open a private shareholding firm. Also known as a private joint stock company. In addition to professional businesses, these legal structures work with all types of commercial and industrial activities.
5. Public Shareholding Company
A public shareholding company is a legal entity with a minimum capital of AED 10,000,000, transferable shares of equal value, and limited liability for each shareholder to the amount of their investment. Except in cases where the name is protected by a shareholder’s patent or if the name is legally entitled to store belonging to the shareholder, no partnering investors’ trade names may be used during the company incorporation process. This entails using “Public Shareholding Company” as part of its corporate identity and trade name.
6. Branch Office- Definition / Ownership Rules
A branch office can be open in a specific location for a business. Although physically separate, a branch office is not a distinct legal entity. Branch offices act as an operational vehicle to establish a company presence in new regions and improve chances of sales and revenue as a practical way to broaden and grow business reach across national boundaries.
Types of Branch Office
1. Branch of a foreign company
Establish a foreign company branch office in the UAE only with full parental company ownership. The branch office will serve as the company’s regional headquarters, but only local trading companies can import goods.
2. UAE branch company
A UAE company branch is essentially an extension of a UAE-based company that broadens its scope by setting up a branch within the UAE. In addition, that engages in one or more activities permitted by the main company license. If they adhere to the main company license, businesses in the UAE with multiple branches can engage in a variety of commercial activities.
3. Branch company in a free zone
In order to expand operations in other zones across the UAE, open a free zone company branch within the free zone jurisdiction of the UAE. You can open a free zone company branch office on the mainland with the proper licensing from DED.
4. Branch of GCC Company
A GCC-based company’s branch engages in one or more of the activities. However, these activities are specified in the main company license. Companies with numerous branches may register for various business activities in accordance with their primary company license’s restrictions.
5. Free zone Company
Free Zone companies are multi-shareholder legal entities with 2 to 5 shareholders each. All over the UAE, incorporate free zones only under geographically specific jurisdictions. The UAE is currently one of the top markets in the world for business setup, particularly in Dubai free zones. Thanks to exclusive benefits, specialized incentives, and pro-trading policies.
- For a free zone establishment, there should be at least two directors and a secretary.
- One person may hold both the director’s and secretary’s positions simultaneously.
- Despite being able to import and export goods internationally. The Free Zone trading companies are unable to conduct direct business on the UAE market. Finally, hire local distributors in order to carry out business operations within the UAE zones.
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