To continuously encourage foreign investments in the UAE, Dubai must come up with ways of attracting investors from different walks of life and with different business interest, one way of doing this is by having different legal business setup formations. As investors believe in different business operation strategies, they are bound to be attracted to different business setup in Dubai formations. In light of this, Dubai has a number of legal business setup formations that foreign investors can choose from based on the nature of business they intend to carry out or personal business preferences. Each of the legal business types has unique benefits that appeal to foreign investors differently. This explains why there are many Indian investors in Dubai all of whom have invested in different business formations but are happy with the operation rules and profit generation. However, before choosing a legal business setup formation in Dubai, it is advisable to understand the different legalities and their registration process.
A sole proprietorship is legal business setup in Dubai that is operated by an individual. Though foreign investors are allowed to own sole proprietorships in Dubai, commercial and industrial sole proprietorship types can only be owned by UAE and GCC nationals. The main benefits of staring a sole proprietorship in Dubai is that they do not have a minimum capital requirement. However, the trade name you choose for your business setup must reflect the nature of business you intend to conduct in the UAE.
Civil companies are formed as partnerships by different professionals and experts in different fields such as; accounting, medicine, engineering, and law. Note that, this type of business setup does not have nationality restrictions. People from different nationalities can partner to form a civil company in Dubai. However, if there lacks a UAE or GCC national partner, the civil company must have a local service agent. Note that, if a civil company is formed to conduct engineering activities, it must a UAE national partner holding at least 51% of the company shares.
Limited Liability Company
Limited Liability Company or LLC is a common business setup in Dubai that appeals to foreign investors. It features 2 to 50 shareholders whose ability and liability in the company is equivalent to the number of shares they hold. LLC can conduct commercial and industrial activities since 51% of the company shares must be held by UAE nationals and the company auditor must be accredited to operate in the UAE.
Partnerships occur when two or more people join hands to start a company. According to the UAE partnership laws, general partners must be UAE nationals while foreign investors make up limited partners. Note that, limited partners should not manage or interfere with business administration. However, there are no restrictions on the number of shares the limited and general partners can hold.
Though there are other legal business setup in Dubai formations, the above are just the common types that appeal to foreign investors. It is therefore paramount to conduct some research on the different business setup formation in Dubai in order to make informed investment decisions.