LLC Company Formation in Dubai, UAE - Local Sponsor in Dubai

LLC Company Formation in Dubai

The Limited Liability Company or LLC is the most popular company structure in the mainland UAE for establishing a commercial, services, or industrial company. The Dubai Economy is the licensing authority for issuing a mainland company license.

For an LLC Company, the shareholding pattern among the business partners is the major aspect of focus. There must be at least two shareholders to set up an LLC in UAE. The company must prepare a Shareholder Agreement based on the share allocation by each investor.

In an LLC Company, shareholders will be liable only for the capital investment they have made in the company. Investor’s assets will be separate from the company’s assets. So, in case of a business loss, the loss will be incurred by the company and not by the investor personally.

As per amendments in the UAE Commercial Companies Law of 2015, foreign investors can own 100% of their company that is set up in the UAE Mainland. So, now it is a great opportunity for foreign business owners to start a mainland company in Dubai, UAE.

LLC Business Setup in UAE

Registering an LLC Company in UAE has become a hassle-free process, especially since there is no requirement for the mandatory local sponsor for most of the business activities. To set up an LLC requires a minimum of two and a maximum of 50 members and there is no minimum capital requirement.

Also, the management of an LLC is vested in the ‘managers’ (up to five natural persons) who may or may not be UAE nationals. Additionaly, for selected businesses such as Gold Trading and Engineering contracting, etc., for receiving certain approvals; they still require the presence of a Local sponsor or a Local Service Agent.

Also, the foreign business owners can appoint a Local Service Agent or a UAE Local Sponsor for the newly formed company at a desired share-holding pattern as agreed by the parties or they can start it as a 100% foreign-owned company in the UAE mainland.

LLC Company Formation in Dubai – Steps Explained

Choose the required business activity & get Approval - Some of the business activities require approvals from government bodies other than Department of Economic Development (DED)
Get Approval of Legal Form - Legal Form is a description of what sort of business you are starting up
Get Approval of Trade Name – Trade name reservation for the company from DED
Get Initial Approval Certificate - Document issued by DED stating no objection to you for starting a business. Once approved you can proceed to the next steps to getting a business license
Memorandum and Local Service Agreement (LSAs) - Find a local UAE Sponsor, decide on shareholders, and prepare the required agreements (Only if choosing for a Local Sponsor)
Establish your Business Location - All businesses in Dubai must have a physical address and tenancy contract with the landlord
Get Licensing Approvals (if required) - Some business activities require special licensing approvals by different government departments
Collect your Business License

LLC Company Formation in Dubai – Documents Required

Valid passport copies of all shareholders and managers
No Objection Letter from the Sponsor for the Manager (If holding a residence visa in the UAE)
Company Registration form from the Department of Economic Development (DED)
Tenancy contract for the office / warehouse attested by the concerned Departments of Dubai Municipality (Planning Department, Civil Defence Department)
Approved location plan of the office/warehouse by Dubai Municipality
Duly attested Memorandum of Association (MOA) from the notary public
Bank Reference letter for each shareholder

LLC Company Formation in Dubai – Business Benefits

Limited Liability Company Formation in Dubai is an ideal legal business form that gives a lot of flexibility to the foreign investor in terms of business operations, company ownership, and profit generation.

Key Business Benefits of LLC Company Formation in Dubai

Wide range of business activities to choose from the DED list to set up an LLC company
Investor visa for the stakeholders along with eligibility to sponsor family
Add more staff to your business as required without any hassles of visa quota
Enhanced credibility in banks for opening a Corporate Bank Account
No customs duty on imported goods
Hassle-free opening of a new branch in the mainland if required
Purchase real estate in Dubai under the company name
Participate in tenders and take up government projects and assignments
Freely trade in the local UAE market as well as rest of the GCC region and the world

Finding a Local Sponsor in Dubai

When it comes to LLC Company Formation, the most important aspect of this legal form is the involvement of a local UAE sponsor. The Sponsor for an LLC Company could be either an individual or a corporate with UAE nationals as the shareholders. However, the amendment to the Commercial Companies Law of 2015 states there is no mandatory requirement to have a Local Sponsor or Local Service Agent for setting up a new Mainland Company in Dubai. Experienced business consultants like Aurion, will eliminate the hassle of finding out the perfect UAE local sponsor for your new company. Also Aurion will assist you with a corporate sponsor based on your specific requirements and nature of business.

Depending on the investors requirement they can still maintain a Local Sponsor or a Local Service Agent for their business. It will help them to coordinate with Government officials, get special approvals, share capital investment, and more. Our legal experts will prepare 100 % legally complaint side agreements to protect your shareholding rights. The agreement will have it all clearly defined, the expectations, responsibilities and the Annual Sponsorship fees, and other specific clauses. With our Local Partner assistance support, you will have 100% financial and operational control as well as securing your ownership rights.

The local partner will have no involvement in your business operations and by virtue of the agreement created, all the operational and management rights will be vested with the foreign investor. A yearly Sponsorship fee has to be paid to the local UAE partner to continue the partnership agreement. There is another type of local Sponsorship, that is instead of an individual a UAE local company can become the local sponsor for you.

Corporate Local Sponsorship in Dubai

A Corporate Sponsor can act as your UAE local partner (51% share) and pass on the ownership rights to you for a Fixed Annual Sponsorship Fee. The Annual Sponsorship Fee will be fixed and will have an agreement that there will be no variation depending on the increase in turnover or profitability of the business.

The key benefit of a Corporate Shareholder is that the foreign investor will be dealing with a company that is a separate entity and has no interest in the daily business operations or ownership of the new company. There will be legal complaint side agreements, power of attorney and other legal compliance documents stating the clear shareholding pattern and other ownership and operational responsibilities.

Benefits of Corporate Sponsorship

Corporate Sponsorship for LLC Company formation in Dubai will help in raising investor confidence and lowers the resistance of investors in finding and building rapport with an individual local UAE sponsor.

No Involvement in Daily Business Operations

The corporate sponsor does not get involved in the day-to-day running of the company enabling the foreign owner to have complete management control of staff, clients and product offering.

100% Financial Power

The business profits generated are vested with the foreign owner and are not to be shared with the Corporate Sponsor at any instance.

Shareholder Agreements

Corporate Sponsors have well defined and drafted legal contracts in place to protect both parties. Hence, the authenticity of the legal form is assured and shareholder rights are protected well. Aurion has a network of Corporate Sponsors as well as Individual partners for LLC Company registration in Dubai. Also, for professional license requirements, we will assist you in finding the right Local Service Agents.

How Aurion Business Consultants will help you?

Aurion will provide end-to-end assistance in LLC company formation in Dubai for the investors. Our single-window company formation package covers all of the below tasks and beyond.

Our expert team of legal & business experts will assist you in: