LLC company setup cost
What is a Limited Liability Company?
A limited liability company (LLC) is a type of company where responsibilities of shareholders are limited as per their share capital limit in company. In United Arab Emirates Limited Liability company is very famous type of company and can be started with minimum of 2 shareholders and maximum of 50 shareholders. Limited Liability company formation requires local sponsor by Law so In order to start a Limited Liability company in UAE investor must get a local partner or local sponsor which by law should hold 51% of shareholding. Investor or business expatriate holds 49% of shares. It is the only option that is being provided by the rules for an outsider to hold the maximum legal ownership. Any company in UAE must have a sponsor or service agent. In order to form a Limited Liability company you must have a sponsor which is normally a UAE national. In free zone, the free zone is your sponsor. Also a UAE owned company can also be a sponsor.
There are different licensing authorities in different emirates for a Limited Liability company. In Dubai and Abu Dhabi, Department of Economic development (DED) is the licensing authority. In Sharjah Department of Economic development is the licensing authority and in other emirates Municipality or chamber of commerce is the licensing authority.
There used to be a minimum capital law for LLC but it was abolished in 2009. Now the rule has been abolished a limited liability company can be formed without bank deposit and sometimes without auditor’s certificate in Dubai, however in Abu Dhabi you still need to deposit 150,000AED as minimum capital. Limited Liability Company, LLC has a vast line of options, thousands of business activities are allowed under LLC.
When registering LLC you need to fill out different forms with authorities. Many of the documents are in English language but sometime it is required by different departments that you must submit that document in Arabic so for that you need a typist who can do so in Arabic.
LLC company also needs to draw memorandum of association (MOA) which should include following:
- Company’s Name (Trade Name)
- Objective of the company
- Head office (Sub offices if any)
- Office timings
- Name of shareholders (their nationalities, addresses)
- Total capital
- No of shareholders and their shares
- Name of the manager of company with nationalities
- Distribution of profit and Loss
A service agent or a sponsor in United Arab Emirates is very important and could be any UAE National women, men or any UAE owned company. Responsibility of sponsor is to bring you in to the country as an employee, as a tourist. In case of Limited Liability Company a sponsor gets the 51% of share of the company. Even though sponsor gets maximum shareholding in the company but he/she have not saying in the company matter, sponsor acts as a silent partner and most of the time only gets the annual fees.
A limited liability company in United Arab Emirates can engage in any kind of business other than insurance and banking sector. To form an LLC company in Dubai you may follow these steps:
- Step one is to choose the name of the company, Name of the company is very important as it will be used with authorities to get approval for your company.
- Step two is to charter a Memorandum of association (MOA) which should be notarized by notary public.
- Step three is to get approval from the authorities like in Dubai the approving authority is department of economic development.
- At step four you are issued the license by the authority.
- Last step is your company’s registration with the commerce department and industry your company is affiliated with.
Following are the documents require by the authorities to register your limited liability company in United Arab Emirates.
- Copy of the passport of foreign Investor
- Copy of the passport of Local Sponsor
- Copy of the passport of the Manager of company
- No objection Letter (NOC) from the sponsor in case the partner or the Manger is on a residence visa in the United Arab Emirates.
- Registration application form from the governing authority, In Dubai it is department of economic development (DED).
- Reservation of the unique trade name of your company.
- You may also asked by the registration authority of the Initial approval from the Economic or commerce ministry of UAE.
- You will be asked to provide the tenancy agreement for your office. Also if your company is engaged in manufacturing business you are also need to provide the tenancy agreement of the warehouse/storage facility which should be attested by the planning department and civil defense department alongside with the location plan.
- Duly attested Memorandum of Association (MOA) from the public notary.