Limited Liability Companies (Partnership with limited liability)
Details in brief about LLC:
This form of organisation requires minimum 2 partners and permits maximum 50 partners with partner’s liability being limited to the amount of capital remaining unpaid. Minimum capital required in this type of company is not stipulated and shareholder can decide on same. Minimum 51% equity contribution & shareholding is to be of the UAE National and balance maximum 49% shareholding can be by a foreigner.
Any investment over and above the share capital can be by way of loan from the expatriate partner or any third party.
49% or minority shareholder can be appointed as the Managing Director with full executive powers of company management. Sharing of profits can be either in the ratio of capital or in any other ratio. Corporate entity can become a partner in this form of organisation. Management rights can be given to an individual designated by the partners and his remuneration can be a fixed amount or percentage based.
Trade License Formalities:
We give hereunder formalities for obtaining trade license:
- Determination of the activity for which license is sought (license is issued for a specific type of activity)
- Finalising form of organisation
- Locating the local sponsor or partner as the case may be
- Initial approval for the activity to be undertaken along-with the form of organisation from the concerned authorities
- Obtaining approval for trade name
- Finalising Memorandum of Association (in case the company form is a limited liability company) or sponsorship agreement (in case the organisation form is a sole proprietorship concern or a branch office) and getting it registered
- Contribution of Share Capital in bank account
- Finalising premises for office / warehouse / showroom and approval from Municipality
- Obtaining final approval from concerned authorities and obtaining trade license
- Registration with labour dept. and thereafter applying for visas for owner / partner and employees.
Time Duration:
Time duration for obtaining trade license would be around 2 weeks and another 2 to 3 weeks for labour dept. registration & getting the visas.
Documents Required:
- Passport copies with visa page for all partners
- Passport copy & Nationality card for UAE National
- NOC from sponsor if expat partner is holding employment visa in UAE
- If applicant is non-individual, then duly notarized / attested (at UAE consulate) docs:
- COI
- MOA / AOA
- Resolution
- POA in favour of authorized signatory - Rent agreement for office premises
- Capital contribution letter from bank
PERMISSIBLE APPLICABLE FORMS IN FREE ZONES IN UAE ESP. JAFZA & SAIF ZONE
| Particulars | Branch Office of Overseas Regd. Co. | Free Zone Establishment (FZE) | Free Zone Company (FZCO) |
Ownership |
The Overseas Regd. Co. |
Overseas Regd. Co. or an individual as a sole proprietor |
Overseas Regd. Co. or an individuals (two or more upto five) as partner’s |
Liability |
Unlimited Liability of the Parent Company |
Limited Liability to the extent of capital remaining unpaid, if any |
Limited Liability to the extent of capital remaining unpaid, if any |
Capital |
No minimum capital requirement & no money to be deposited as capital for registration of the company |
Dhs. 1,000,000/- in JAFZA or Dhs. 150,000/- in SAIF Zone. To be deposited in bank for registration of the FZE. |
Dhs. 500,000/- in JAFZA or Dhs. 150,000/- in SAIF Zone. To be deposited in bank for registration of the FZCO. |
Activity |
Trading/Mfc./Services as per the main activity of such overseas registered company. Subject to approval of Free Zone Authority. |
Trading/Mfc./Services as may be approved by Free Zone Authority. |
Trading/Mfc./Services as may be approved by Free Zone Authority. |
Audit of Accounts |
Not required. (may be required for Parent Company account consolidation purposes) |
Required and Report to be submitted to the authorities annually |
Required and Report to be submitted to the authorities annually |
Taxes |
No direct / indirect taxes applicable & even tax holidays for 50 years. (However the profit of branch would be clubbed with parent company income and may be taxed in the country where parent company is located) |
No direct / indirect taxes applicable & even tax holidays for 50 years. |
No direct / indirect taxes applicable & even tax holidays for 50 years. |
Foreign Exchange Controls |
No restriction on transfer of capital & profit. |
No restriction on transfer of capital & profit. |
No restriction on transfer of capital & profit. |
Period of License |
One year & renewable thereafter |
One year & renewable thereafter |
One year & renewable thereafter |
Permitted to operate |
Only within Free Zone or outside UAE |
Only within Free Zone or outside UAE |
Only within Free Zone or outside UAE |
Note:
- JAFZA means Jebel Ali Free Zone & SAIF Zone means Sharjah Airport International Free Zone
- JAFZA and SAIF Zone stated herein only for comparison purposes. Can also provide information on other free zones in UAE.
- Our Professional fees shall depend on the services rendered
COMPARATIVE CHART FOR COS. IN UAE
Amt in UAE Dirhams (AED) (Equivalent to USD 1 = AED 3.68)
| Co. Type | Sole Proprietorship | Limited Liability Company | Branch Office | Free Zone | Offshore Co. in UAE |
| Ownership | Single Individual | 2 upto 50 (incl. corporate shareholders) | Parent Company | One or more individual or company depending on type of organisation | 1 or more individual |
| %age ownership for Foreigner | 100% | Max. 49%. But complete rights of management & majority of profit sharing can be to minority foreign shareholder. | 100% | 100% | 100% |
| Minimum Capital | No minimum capital | 300,000/- in Dubai and 150,000/- in Other Emirates | No capital requirement | Depends on free zone and the type of company | No minimum capital stipulated |
| Activity | Services (Trading permitted in Sharjah & Ajman only) | Trading, Services or Manufacturing (Generally only one or related activity permitted) | Generally as a representative office of the parent company (As a Liasion Office) | Trading, Services or Manufacturing (Generally only one or related activity permitted) | Any activity as desired by owners except banking, insurance |
| Area of Activity | In the Emirate where registered | In the Emirate where registered | In the Emirate where registered | In the Free Zone where registered | Outside UAE. Can not deal / trade with any person / company in UAE (incl. Free Zones) except for banking / professional services/ investments |
| Liability | Unlimited | Limited | Unlimited | Depends on form of organization | Limited |
| Audit | Not required | Required | Required & to be submitted to Ministry of Economy | Depends on form of organization | Required but not to be submitted to authorities |
| Taxes | No corporate or personal tax in UAE | No corporate or personal tax in UAE | No corporate or personal tax in UAE | No taxes applicable due to exemption | No corporate or personal tax in UAE |
| UAE Visas | Available depending on activity & office | Available depending on activity & office space | Available depending on activity & office space | Available depending on activity & office space | Not Available unless own office premises rented |
| Repatria-tion of Investment / Profits | No restriction | No restriction except for Share Capital which can be withdrawn only on liquidation as per commercial law | No restriction | No restriction except for Share Capital which can be withdrawn only on liquidation as per commercial law | No restriction except for Share Capital which can be withdrawn only on liquidation as per commercial law |
| Premises & Local Sponsor / Partner | Required. | Required. | Required. | Premises Required (estd. min. cost 30-35,000/-) but Local Sponsor not required. | Not Required. No Rent or Sponsor Fees. Registered Agent required and this address can be used as registered office. |
| Rent (depends on location & size of premises) + Local Sponsor Fees (depends on type of local partner) | Rent (depends on location & size of premises) + Local Partner Fees (depends on type of local partner) | Rent (depends on location & size of premises) + Local Sponsor Fees (depends on type of local partner) | |||
| Estd. 1st year cost: | Rent + Sponsor Fees | Rent + Sponsor Fees | Rent + Sponsor Fees | Rent | No Rent or Sponsor Fees. |
| License Fees 7,000/-(depends on rent & above amt. is only approximation) | License Fees 12,000/-(depends on rent & above amt. is only approximation) | License Fees 18,000/-(depends on rent & above amt. is only approximation) | License Fees 15,000/- to 25,000/- | Incorporation & Year 1 Fee 4,500 to 10,500 | |
| 2nd year onwards | Rent + Sponsor Fees | Rent + Sponsor Fees | Rent + Sponsor Fees | Rent | No Rent or Sponsor Fees. |
| License Fees 5,000/-(depends on rent & above amt. is only approximation) | License Fees 8,000/-(depends on rent & above amt. is only approximation) | License Fees 10,000/- | License Fees 8,000/- to (depends on rent & above amt. is only approximation) | Annual Fees 2,700/- 10,000/- |