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6 Types of Company Formation in Dubai, UAE

The UAE is well known for its time-tested, fast and affordable company formation process, with good reason. With the right support, you can be up, running and ready to trade out here in a matter of days.

However, the process is not always the same. The steps and documents required to start a business in the UAE will depend on numerous factors from the location of your enterprise to the type of license you require.

There are also several types of company formation in Dubai. So, the first step when applying for your license is deciding on the most appropriate one for your needs. The expert team at Business Incorporation Zone (BIZ) can help with this step – and the rest of the company formation process too.

To get you up to speed before you start your license application, below is a rundown of the most common setup types.

Types of company setup in the UAE

The type of company setup that’s right for you will depend on the nature of your business activities, your chosen jurisdiction and more.

All of the following types of company formation in Dubai can be established in the mainland, and many are also permitted within UAE free zones.

When you set up in a free zone, you are guaranteed 100% ownership of your operation. You can also benefit from zero currency restrictions, customs tax exemption, and capital and profit repatriation.

Mainland companies can be 100% foreign owned in some cases and can be established anywhere in the UAE. However, they do not benefit from the other advantages listed above.

Read through the options below to see which types of company formation in Dubai are most suitable for your business.

Public shareholding company

A public shareholding company must have at least ten shareholders or active participants, unless a UAE government entity is involved. This group must include at least three directors but no more than 12.

Public shareholdings must present AED 10m of share capital on formation with 25% paid on subscription. Over half, at least 55%, of the company’s shares must be made available to the public. All shares must be of equal value.

Private shareholding company

This company type is similar to the public version in that there is a minimum requirement of three directors. Private shareholdings must also put up AED 2m of share capital.

The most notable difference between the two setup types is that, in this instance, shares cannot and must not be made available to the public. At least 51% of shares must also remain in the control of GCC nationals. Foreign investors are allowed to own the remaining 49% of shares.

In some instances, private shareholding companies can be converted into public companies after a period of two years.

General partnership

A general partnership can be established by two or more partners. Both partners are responsible for the company and all of its commitments and liabilities. This type of company can only be formed by UAE nationals. Partners names can be included in the company name.

A partnership can be dissolved when one partner withdraws from the agreement, goes bankrupt, dies, or loses their mental capacity. However, the partnership can continue in such events should the remaining partners unanimously agree.

Limited partnership

In this instance, the partners are liable for the company’s debts only up to the value of their investment into the business – hence the term limited liability.

Once again, partners must be UAE nationals. Partners in limited liability companies cannot include their personal names in the company name.

Joint venture

A joint venture is similar to a partnership in that it is formed by at least two UAE-nationals. In this case, only one of the partners’ names can be used in the company name.

Joint ventures are also commonly known as consortiums.

Limited liability company (LLC)

This is one of the most common business types anywhere in the world. It must be established by at least two people but no more than 50.

As with a limited partnership, each shareholder’s liability is limited to the value of their shares. The minimum share capital for this type of corporate entity is AED 300,000. Foreign ownership of shares is permitted within LLCs.

LLCs are allowed to perform a wide array of activities in the UAE with the exception of banking, insurance and other finance-related operations.

Starting your business with BIZ

That’s all there is to it. As you can see, if you’re armed with the right knowledge, business setup in Dubai and the UAE doesn’t have to be overly complex.

That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.

To help you ensure that this is the case, it’s a good idea to work with a company formation specialist such as BIZ when establishing a new company in the UAE.

We are a team of UAE company formation professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.

As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.

We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visa applications that are required to trade in the UAE.

In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.

Contact us for more information

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