How do I set up a business in Dubai? - Part 3

14-4-2015

In part 1 and 2 we provided information regarding the setup of a company in Dubai. In this final part, we will go into more depth on who can set up a company in Dubai.

Not just any foreigner can start a business in Dubai. An Arab never lets go of his possessions which means that  foreign investors can hold an equity ownership in the UAE. as long as 51% of the equity is held by a UAE national.  

 

Dubai Mainland – a local sponsor is required.

The Limited Liability Company is the preferred company form in Dubai due to its flexible management structure and protection of minority shareholders. However, the Commercial Companies Act permits foreign investors to hold an equity ownership in a UAE company as long as 51% of the equity is held by a UAE. national.  Therefore, if one decides to opt for setting up a company in Dubai mainland because trade will be done with the local market, a local sponsor must be found. A Limited Liability Company could therefore be seen as a joint-venture between the expat and UAE national. Our office in Dubai will gladly assist you with finding a suitable local sponsor.

 

But…..100% foreign ownership is also possible!  

 

Single Shareholder – Free Zone Establishment (FZE)

In Free Zones, 100% foreign ownership is allowed. When you decide to incorporate your company in one of the Free Zones there are several options. If you are looking to be the sole manager and sole shareholder, a Free Zone Establishment (FZE) would be the most appropriate legal form. The shareholder can be a natural or legal person.  

Incorporation of a privately held company is the easiest. Most Free Zones only require a Curriculum Vitae, passport copy and a bank reference of the natural person as shareholder. Many entrepreneurs however, prefer to set up their business in Dubai through a holding company.  If the latter, the Free Zones require various legal documents, such as the Certificate of Incorporation and Articles of Association. As these documents need to be translated and legalized, the setup of a business with a corporate shareholder is more time consuming. Our office in Dubai can make this process a hassle-free one, as our employees can prepare all the required documents for you and liaise with the Free Zone as required.  

 

Two or more shareholders – Free Zone Company (FZC or FZ-LLC)

When you would like to set up a company in one of the Free Zones with one or more partners, the Free Zone Company is the most suitable legal form. The FZC requires two or more shareholders and has the same advantages as the Free Zone Establishments.

 

Branch/Representative Office

Besides the possibility of establishing an independent company, it is possible to establish a Branch/Representative Office in a Free Zone. This office will have no legal personality and its activities match with the business activities of the foreign parent company. The Branche/Representative office will conduct business on behalf of the parent company and does not require a minimum share capital.

For any other questions regarding a business setup in Dubai, please visit our website www.watermillconsultants.com or send us an email info@watermillconsultants.com.

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