A feasible reason why foreign investors come to Dubai is the diversity of company types they are allowed to set up in the United Arab Emirates. A wide range of structures is available, from the simple structure of sole proprietorship to even more complex types of companies and free zone structures. Dubai really has one of the most flexible legislations for setting up a business. If you are interested in more details when opening a company, our lawyers in Dubai will help.
Types of structures in Dubai
The only place where investors may fully register a company with 100% foreign capital is one of the Dubai’s free zones. Structures incorporated in the UAE must take the form of one of the following types:
- Partnership – it can be general or simple limited. All kinds of partnerships have at least two partners. The minimum share capital for a limited partnership in Dubai consists of 500,000 AED.
- Limited liability company – This type of structure must have between two and 50 shareholders and, under the Dubai Company Act, it needs to have between one and five managers. There is no minimum share capital required in order to register such a company. Our attorneys in Dubai can offer further assistance on the matter.
- Private and public joint stock companies – A private joint stock company in Dubai must have at least three shareholders, whereas the public joint stock company requires at least ten. The minimum share capital required for the private joint stock company is 2,000,000 AED (United Arab Emirates Dirham – UAE currency) and it has to be deposited in full at the same time with the company’s incorporation. The shares of this type of company are not to be traded on the stock exchange. For the public joint stock companies, the minimum share capital is 10,000,000 AED. Being divided into shares, the share capital of these structures can be traded on the stock exchange.
- Branch – A branch is a company type that is located elsewhere than the main’s office address. If you want to set up a branch in Dubai, our lawyers in Dubai can help you in the process with relevant and assisted guidance.
- Free zone establishments – This kind of establishments in Dubai needs at least one shareholder and is not prevented from having full foreign ownership.
- Free zone limited liability companies – As Dubai has one of the most attractive and liberal conditions regarding regulations and rules, it has become a successful business environment for many entrepreneurs around the world. A free zone structure must have a trade license (which must be renewed annually) if the intended business’ activities are from the commerce field.
Types of business licenses in Dubai
Before deciding on the type of structure they want to set up, the entrepreneurs must know about the business licenses they may need in order to start the economic activity. The Dubai Department of Economic Development regulates three types of business licenses:
- commercial license;
- professional;
- industrial.
The commercial license applies to companies involved in trading activities such as sales. The professional license is usually required for sole proprietors in Dubai and applies to the ones that offer their personal services such as consultancy. The industrial license is available for companies which are involved in activities such as manufacturing, processing and packaging. In the case of foreign investors opening a company in one of Dubai’s free zones, the same business license categories are applied.
For more information regarding these types of companies in Dubai and complete guidance if you decide to set up a business here, please do not hesitate to contact our law firm in Dubai.