There are some cases when, within opening a business in the UAE, a free zone company does not fit the requirements and a local UAE LLC company must be opened. In the present overview we provide some typical cases when such company may be categorically required.
Case 1 - when the company activities fall under certain activity type which can be executed by local UAE LLC companies only. Such activities are, for example, real estate brokerage or travel agency. To obtain a license for this business type company must have the LLC status. Means, for these activities, a local person must be at least 51% owner of such company.
Case 2 - when your business is linked to some certain territory of the UAE and such territory is not a free zone. For example, you need to open a shop or a restaurant in a chosen residential area or a shopping mall and such territory is not a free zone. In such case you also must register the UAE LLC company.
Case 3 – the services / business of your company is provided on the main territory of the UAE. For example, if you sell retail some goods to end consumers in the UAE or provide some services to the country residents (for example, house maintenance or gardening) your company must also be in the status of the UAE LLC company.
Case 4 – you wish to participate in the tenders of the UAE government. In such cases commonly your company also must be in the LLC status or have the officially appointed local agent in the UAE. Whereby, before registering such company, you shall know in which Emirates exactly you plan to participate in such tenders – due to additional regulations which may apply. For example, to participate in the tenders in Abu Dhabi, your company must not only be in the legal status of the UAE LLC company, but be registered specifically in Abu Dhabi.
When registering the UAE LLC company, there are some additional regulations and requirements to be fulfilled. Some are mandatory for all types of LLC companies; some are applicable only to certain types of activities. For example, each LLC company must lease a real office of at least 30 sq. m. And, if it is a travel agency – inbound and outbound – its office must be at least 60 sq. m. – 30 sq. m. per sub-activity.
In terms of local sponsor / agent – there are also various cases and regulations. For example, for most of the professional activities, for example, IT consulting, LLC company can be 100% foreign owned and a local UAE citizen plays a role of a local agent means is appointed as a contact person for all issues related to communications with governmental authorities.
For the cases when a local citizen is required as the 51% or 100% owner of the UAE LLC company, the additional agreement can be signed, which would protect the interests of the foreign investor. Moreover, there is also the solution of paying the share capital of AED 300.000,- and depositing it with the UAE governmental authorities. In such cases the local sponsor would not be required as your cash deposit of the share capital covers this obligation.
If you need to register a company in the UAE and require an advice on the choice of the right company form and type – please feel free to get in touch with us.
