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Registration of LLC company with a local partner in Dubai, UAE

Registration of LLC company with a local partner in Dubai, UAE

The most popular types of companies in Dubai and in the other Emirates of the UAE are offshore and onshore companies which are registered in the free trade zones of the UAE.

There is one more important type of companies which is commonly used for business in the UAE – companies which are registered in the mainland of UAE – LLC companies.

There can be the number of reasons for the registration of the companies of this type. First of all, such companies can be required for the certain types of business. For instance, for retail trade on the main territory of the UAE. Besides, these companies will become obligatory while participating in the public tenders in the Emirates. One more example is, when business must be opened in the certain location, which is not on the territory of the FTZ, but, for example, in a shopping center, in a popular residential area_ etc. If a company leases premises in the main area of Dubai it, respectively, must be registered in the form of the LLC.

A local partner is not always required in the companies of this type being registered in Dubai. If the company comes within the category of the professional activities, such as consulting, audit, legal services etc., then, the company in the form of the LLC does not require a citizen of the UAE as the obligatory shareholder of the company. Such a company can be of 100% foreign ownership. The only requirement is that a local citizen must be appointed as the agent of the company. His tasks and powers will be limited solely to the communication with the government registration authorities in the process of company registration and its renewal. The entire control over the activities of the company is in the hands of its foreign shareholder.

The availability of the local citizen, who owns a company at least by 51%, is required in the case when the activity of the company comes within the commercial category – trade and alike. In practice, the role of such local shareholder comes to the nominal ownership of the shares in the company. The local citizen signs the additionally prepared agreement, that he is not the effective owner of the shares of the LLC company and his role is limited only to the minimal functions without the rights to influence on management of the company. The local citizen receives a fixed amount of money per year for his services.

A company with LLC status has certain advantages over the companies on the territory of the FTZ. It can rent premises in any part of Dubai, it has no restrictions on business activities on the territory of Dubai, and it is treated more positively by the banks in the UAE.

Besides, if such company is involved in manufacturing in the UAE, it may be exempted from the payment of the customs duties when exporting its products to the other countries of the region.

Besides, the costs of visas for employees may be the important factor, when choosing a company of this type. For employees visas are less expensive than for the companies in the free trade zones, and if the company has a significant number of employees – it also serves in favour of the LLC.
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