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Know More About Limited Liability Company (LLC) Formation in Dubai
A limited liability company is the most preferred structure of a business by emerging entrepreneurs and business owners. An LLC provides several benefits to the entrepreneurs such as limiting their liability and protecting their personal assets for the debts and liabilities of the company. A limited liability company has alone so many advantages and forming an LLC in Dubai is a bonus for business owners. Dubai offers advanced technology, excellent infrastructure and a talented global workforce. However, the process of LLC formation in Dubai is not an easy one and requires a lot of knowledge about the local laws along with strong connections in the city. We at Enterslice provide professional assistance for Dubai LLC setup for your convenience. Our experts are specialists in Dubai LLC formation and can complete the process hassle-free and swiftly.
Limited Liability Company (LLC)
A limited liability company as the name suggests is a company that limits your liability and safeguards your personal assets from the debts of the company. An LLC is often referred to as the combination of two types of business structures, i.e., sole proprietorship and a company. So, an LLC is a separate entity that will protect you in cases of repayment of debts of the company. The repayment of debts will be done through the assets of the company rather than from your personal assets.
Benefits of LLC Formation in Dubai
Dubai LLC formation has several benefits for entrepreneurs and business owners such as:
The first and most fascinating benefit of an LLC formation in Dubai is that it provides limited liability on the owners or members, unlike the sole proprietorship business which makes the owner of the business personally liable for the liabilities and debts of the business. The members or owners of an LLC have no such liability and their personal assets are safeguarded from the repayment of debts of the company.
A limited liability company in Dubai also provides the benefit of flexible management, i.e., it is not mandatory that the company should be run by the members or owners only. You have the flexibility to hire managers who are not the members or owners of the LLC to run and manage your LLC.
An LLC can be owned 100% by a foreign entrepreneur or a business owner following the 2021 amendment to the commercial companies law. Previously, if you were to open a limited liability company in Dubai Mainland, you would have to hire a local partner and give him 51% shares of the company. This is not the case now and an LLC can be formed by a foreign business owner in Dubai mainland with 100% ownership.
An LLC formation in Dubai is relatively easier than forming other kinds of companies in Dubai. The process of forming a limited liability company in Dubai is trouble-free and quick which makes it the most preferred business structure for foreign entrepreneurs and business owners in Dubai.
A very crucial advantage that attracts foreign entrepreneurs and business owners to form an LLC in Dubai is that the tax rates levied on LLCs are comparatively lower than the tax levied on other types of companies.
You can form an LLC in Dubai in more than 2000 activities as specified by the Department of Economic Development. It implies that the scope of doing a business by forming an LLC is wide and you can select any business activity as per your preference.
Forming an LLC in Dubai not only provides you with tax benefits and flexible management, but it also boosts the credibility of your business. An LLC has more credibility among the customers as compared to a sole proprietorship and partnership business. It looks like an established entity and thus it is easy to win the trust of the consumers.
A very important advantage of forming Dubai LLC formation is that it provides flexibility in sharing of profits among the owners or members, unlike partnerships where you need to distribute the profits equally among all the partners. In a limited liability company, the profits are distributed in the ratio as agreed by the members and specified at the time of LLC formation.
You can also enjoy the advantages of forming a limited liability company in one of the best cities in the world having advanced technology and excellent infrastructure by connecting with Enterslice and starting your journey to a successful business today.
Process of Dubai LLC Formation
The first step of LLC formation in Dubai is to select a business activity out of more than 2000 activities listed by the Department of Economic Development. You need to choose the activity in which you need to establish your company. Our experts at Enterslice will assist you in selecting a business activity for your LLC.
After you have chosen the business activity, you need to reserve a trade name for your company. You need to select an appropriate name that connects with your target customers and helps you build a brand in your business activity category. The name should be unique and should not be identical or similar to any other registered business in the UAE. The local laws of UAE prohibit the use of an offensive or religious name, i.e., the name of your company should not include any religious name or any such thing that violates the morality of the public. You must obtain initial approval from the Department of Economic Development about your selected name. You don’t need to worry over these legal prerequisites of reserving a name for your LLC, we at Enterslice will take care of every legal requirement and assist you in selecting the best name for your company that will connect directly to your target consumers and will be well within the specified criteria.
Following the reservation of your trade name, you need to find a location for your company where you will set up your registered office. You need to get the approval of the Department of Economic Development for your business location. You are required to sign the rent agreement or lease agreement for your physical office space. The professional assistance for Dubai LLC formation at Enterslice includes finding the perfect location for your business that aligns with your business activity.
Now as you finalised the location of the business, the next step is to draft a MOA (Memorandum of Association). A MOA is a very important document in the Dubai LLC formation process and it contains information such as the objectives of the company, shareholding structure and other vital information about the company.
As you have obtained initial approval from the Department of Economic Development for the name of your company, you now need to obtain final approval or final permission from DED to form your company in Dubai. You have to submit documents such as the lease agreement, MOA and the initial approval to DED and then wait for their approval.
After completing all the above-listed steps and receiving the final approval from the Department of Economic Development, you need to apply for the license with the appropriate government authorities. There are several kinds of licenses provided to businesses such as professional licenses, commercial licenses, industrial licenses, tourism licenses, craftmanship licenses and agriculture licenses. You need to apply for a specific license based on your business activity. For example, if your company engages in the buying and selling of goods or trading activities, then you need to apply for a commercial license. In case your company deals with services related to the tourism and hospitality sector, then you will have to apply for a tourism license. Let’s make it clearer for you by giving you another example, if say, you are a doctor, engineer or CA and now want to start your company in a similar field, then you need to apply for the professional services license.
Documents Required for Dubai LLC Formation
There is a requirement for several documents for LLC formation in Dubai such as the photocopy of the passports of members or owners, photocopy of the shareholder’s passports, initial approval received from the Department of Economic Development, notarised MOA and the approved trade name reservation.
Another document required is the registration application form filed with the Department of Economic Development.
As you must have taken an office space so you also need to submit an attested contract of tenancy along with the location plan.
You also need an NOC if any shareholders work in a local company in the UAE.
For each shareholder, a bank or professional reference letter should also be submitted.
If your company engages in commercial activities that require a local sponsor then you need to submit a certified copy of his or her passport also and an NOC letter from the local sponsor.
You need to make sure that you have with you all the above documents to commence the process of your LLC formation in Dubai. There might be some additional documents required depending on the types of business activities your company is engaged in. If you have any trouble understanding and proceeding with the same, our experts will guide you through all the necessary documents required for Dubai LLC formation.
Professional Assistance for Dubai LLC Setup at Enterslice
Enterslice provides the finest professional assistance for Dubai LLC Setup and completes the process quickly and efficiently. Our experts will assist you in finding the best business location for your LLC, drafting the MOA, selecting the most appropriate name for your company that will appeal to your target consumers and obtaining the final approval from the Department of Economic Development. We will take care of the full process starting from helping you to choose a business activity to applying for the particular license as per your selected business activity.
Our specialists have years and years of experience in Dubai LLC formation and are fully familiar with the local laws, rules and regulations.
