Setting up a company in the UAE requires making important decisions as an investor or as an entrepreneur. And the first thing you need to decide on is the type of entity you want to establish. Among the several available options, you can find the LLC company option, which can be very favorable for you.
In this article, you will learn everything you need to know about this type of company formation. Firstly, you’ll find basic information about it and the benefits that it offers to foreign investors in the UAE. Also, we will help you understand the business setup process of an LLC in this country. Let’s observe:
- What is an LLC in the UAE and how does it work?
- Why should you consider setting up an LLC in the UAE?
- What are the benefits of setting up an LLC in this country?
- Where exactly can you set up an LLC structure in the UAE?
- How to complete the business setup process of an LLC entity?
- What do you need to complete the setup process of an LLC company?
- How much can cost to set up this type of company in the UAE?
- How can Connectfz help you establish an LLC entity in this country?
1. What is an LLC in the UAE and how does it work?
You must know what is LLC in UAE if you want to be the owner of an LLC company. These acronyms stand for “Limited Liability Company”, and represent one of the many allowed company structures in the UAE. Depending on the business needs that you have, this type of company can be beneficial for your business.
The structure of a Limited Liability Company consists of a minimum of 2 shareholders (and a maximum of 50). All shareholders have their liability, which is limited to their shares in the company’s capital. Therefore, as the owner of your business, you must make the right decisions when choosing your partners.
Another important element of the LLC structure is the presence of a local agent as the company’s sponsor. If the investor is an expat, it is mandatory to have a sponsor that owns 51 percent of shares. Subsequently, the owner of the company will own the remaining 49 percent of shares.
Although local agents will not be involved in the operations of your company, it’s crucial to choose a reliable sponsor. Therefore, you are free to evaluate all available or possible sponsor options before making an official decision. Besides, you can also obtain more tips about this matter with a consultant if it is necessary.
Here you can learn about sponsors in Dubai for LLC companies and the reason why they are necessary.
2. Why should you consider setting up an LLC in the UAE?
Opening an LLC company in this country can be very profitable, and here you’ll discover the reasons behind it. Firstly, this type of company formation in the UAE offers complete personal protection from liability. In other words, the owner is not personally liable in case the company gets into any kind of trouble.
Among other good reasons to set up an LLC business, you can find the following ones:
- Entrepreneurs and investors are free to set up this type of entity anywhere in the country. This is because LLCs can trade with the local market directly. By the way, that is also something that differences them from free zone companies.
- Besides, there is also a wide range of business activities that an LLC can carry out. The Department of Economic Development (DED) allows entrepreneurs to carry out any of the 2000 business activities available for LLCs. However, they must apply for a trade license before starting their operations.
- Another reason that you should consider is the tax exemptions you can have for operating an LLC. In fact, all types of company formations can enjoy a favorable tax environment in the UAE. However, when we talk about LLCs, we talk about entities that are 100 percent tax-free businesses. Therefore, if you set up a Limited Liability Company, you will pay no tax whatsoever on all profits.
- Also, LLCs in the UAE are popular among first-time entrepreneurs due to the low cost of the business setup process. In this country, the minimal application costs start from AED 17,000. Besides, there is not a requirement for paid upfront share capital, which is another great advantage for entrepreneurs.
Here you can learn about the advantages of becoming an entrepreneur in a successful country like the UAE.
3. What are the benefits of setting up an LLC in this country?
Besides the previous advantages, you can find other benefits of setting up an LLC company in the UAE. For example, after setting up your company, you can expand it and open branch offices throughout the country. Let’s take a look at other benefits that you can obtain by having this type of company in the UAE:
- The Limited Liability Company structure allows LLCs owners to protect their personal assets in case the company faces legal issues.
- There is a wide range of business activities that you can choose to set up an LLC.
- There will be no local corporate to pay.
- LLC owners have no restrictions on the number of visas that they want to obtain.
- Also, they can apply for investor’s visas, which allow them to get investor status in the emirate.
- It is not a requirement to have a minimum share capital to open a new Limited Liability Company.
- There will be no imposed restrictions on real estate ownership.
- For LLCs, there is an exemption from paying the standard 5 percent of customs duty on imported goods and products.
- Investors and entrepreneurs can set up their LLCs with multiple shareholders. There is a minimum of 2 and a maximum of 50 shareholders allowed. Besides, shareholders can be either corporate entities, individuals, or a combination of these two options.
Here you can learn about the available mainland trade licenses that you can find in the UAE.
4. Where exactly can you set up an LLC structure in the UAE?
In the UAE, you can find many available locations to choose from and set up an LLC company successfully. However, it is recommendable to select the most efficient business location for this type of entity, which is the mainland. In this country, you can set up your Limited Liability Company in any of these places:
- Dubai Mainland: the top location for all investors is always Dubai and here you’ll find the reason behind it. LLC companies in Dubai are probably the most successful ones due to the favorable environment and other benefits. For example, they can have access to a wider market and more consumers (many of them are usually tourists). You can contact the main authority (Dubai Department of Economic Development) to obtain more information.
- Sharjah Mainland: this location is among the most affordable ones for all new entrepreneurs and investors. Besides, it is also one of the best-industrialized zones, which makes it perfect for all industries and factories. The SEDD (Sharjah Economic Development Department) is the main authority that regulates companies and businesses in this location.
- Ajman Mainland: it is also one of the most attractive emirates for many business people due to its strong economy. If you want to set up a small or medium enterprise, this location will be favorable for your business. Besides, it is also a perfect place for startups and businesses with low budgets. In this case, the pertinent authority is the Ajman Department of Economic Development.
- Abu Dhabi Mainland: this emirate is among the most advanced ones when it comes to businesses and markets. Here you will be able to have many different benefits to make your business run smoothly. Also, you can apply for different important documents, such as the 2-year business license and the Golden Visa for investors.
5. How to complete the business setup process of an LLC entity?
After understanding the LLC meaning in UAE, any investors will be able to start the LLC setup process. Most importantly, they need to understand and meet all requirements in order to start the process. Now, let’s see how to set up this type of company in any business location in the UAE:
- The first step will be choosing a proper business name for the new company. Nonetheless, it is important to consider and follow some rules when completing this step. For instance, the investors or entrepreneurs shall not include religious or sensitive content when choosing a name.
- After selecting a name for the company, the next step will be choosing a business location to set up. Your best option is to set up in the UAE mainland, which can be in any of the available emirates. However, you might also find other available places to set up your LLC company.
- Then you will need to find a reliable registered agent, who will receive your official documents on behalf of your company. After choosing your agent, you have to prepare all operation agreements, which include business organization, board of managers, etc.
- Submit all required documents to complete the process and wait for the necessary approvals. After receiving the approvals and the business license, you can start operating your company.
Here you can learn about the process to convert a sole establishment to an LLC in the UAE.
6. What do you need to complete the setup process of an LLC company?
In case you want to set up in Dubai, be sure to understand the LLC meaning in Dubai. Most importantly, you need to meet all requirements to complete the setup process, and also submit these documents:
- Your application form from the DED.
- Some passport copies of the local sponsor, the manager, and the investor.
- The MOA from the public notary.
- The tenancy contract for the office space.
Here you can learn about the procedure to open a new corporate bank account in Dubai for your business.
7. How much can cost to set up this type of company in the UAE?
The cost for setting up an LLC company will vary according to the place you choose. For example, setting up this type of company in Dubai could cost AED 28,560 approximately. This cost includes license fees, the Chamber of Commerce fees, and many other details. In case you desire to obtain more information, contact a consultant to learn more about these elements and their costs.
Here you can learn how to calculate the cost of setting up a new business in the UAE.
8. How can Connectfz help you establish an LLC entity in this country?
The business setup process of a Limited Liability Company in UAE can be easier with the right partner. With Connectfz by your side, you can complete all processes and achieve your goals without wasting time. Besides, you will get all the information you need to start operating your business in the UAE.
On the other hand, if you want to set up a free zone company, you can also count on us. Firstly, you will have many options to choose from, including free zones, packages, support services, and more. Also, our team will help you to set up your company without making you go through tedious procedures.
After setting up your business, you can still request our support services to make important improvements. For example, some of the available services that you can request could be our banking and payroll services. Feel free to contact us to know more about our other services available for your company.
Would you like to contact Connectfz to know more about the setup process of a Limited Liability Company in the UAE and its benefits? If you have any questions, call us on +97143316688. You can email us at firstname.lastname@example.org, and you will talk to one of our representatives who will answer your questions.