What Are The Types of Companies that One Can Setup in Dubai

April 12, 2022

Dubai is the center of business in the United Arab Emirates. In fact, the fame of the UAE as a business-friendly nation is major because of the Dubai emirate. Since previous many decades, the emirate has been alluring overseas business people for Dubai company setup because of many encouragements and features it gives to all kinds of businesses. A vital reason that several kinds of businesses are thriving in this emirate is because of the prospect of opening various kinds of corporations in the Dubai emirate.

All these various kinds of corporations have their own needs, boundaries, and advantages. These distinct kinds of corporations are appropriate for different kinds of businesses as per their priorities and needs. There are several kinds of corporations that can be formed in the Dubai emirate. These corporations can be formed in Dubai free zone, mainland, and offshore jurisdiction.

Domestic and overseas business people can select the kinds of corporations they are curious about and register them as per the legal needs applied in the emirate. One thing has to remember that these needs are just distinct for domestic and overseas businessmen arriving in the Dubai emirate. Below we mentioned the names of these corporations that you can form in the Dubai emirate.

Here are the Different Types of Companies to be Setup in Dubai 

General Partnership 

This kind of Dubai company setup is just obtainable to UAE citizens. In a general partnership, two or more partners are liable for the earnings and loss activities of the corporation. These partners are liable for the debts of the corporation also. The curiousness of a partner can be conveyed in the following methods – in case this is specified in the partnership contract and permission from the other partners or all the partners.

Limited Liability Company 

It is a very common kind of company formation in Dubai in mainland jurisdiction. By forming an LLC company, businesses are able to make sales to the emirate and other portions of the country. A minimum of two and a maximum of fifty stakeholders are needed for forming a limited liability company in Dubai. The most highlighted limitation for overseas business people is that just 49% stakes of the corporation can be possessed by overseas businessmen while a domestic citizen would possess 51% stakes of the limited liability company in Dubai emirate.

But 51% stake does not need distribution of benefits with a similar ratio. Overseas businessman and Emirati citizen can set their revenue sharing separately. This is also potential to make a payment of particular charges to local partners rather than making them a partner in the profit of the corporation.

Civil Company 

A civil Company is a specific kind of corporation that set the target for the improvement of the leaders of different sectors comprising engineers, accountants, doctors, lawyers, and more. Such kinds of corporations are completely owned by experts but a UAE local service agent is needed for the completion of legal matters. In case an overseas corporation is in a similar sector, then this can become a partner of the civil corporation.

Free zone Company 

There are 45 free zones in the United Arab Emirates and over 50% of them are present in the Dubai emirate. This means the significance given to these free zones in the Dubai emirate. There have been major two kinds of corporations permitted in the free zone unit. Freezone company formation is almost the same as the limited liability company in the mainland of Dubai emirate with the need for a minimum of two stakeholders. On the flip side, just an individual stakeholder is needed to form a free zone formation.

The major benefit of corporations formed in free zones is that they are able to be completely possessed by overseas businessmen. Besides that, these corporations are majorly free from taxation. There are also numerous free zones in the Dubai emirate that are exempt from VAT. But there are some limitations imposed on these corporations. These Dubai-situated free zone corporations are just permitted to conduct within their particular free zone and can just run activities allowed in their business license.

Public Shareholding Company 

A public shareholding company should require a minimum of ten founders. Although, there is an anomaly where the government of the UAE is included. In this situation, the score of partners can be fewer than ten. The number of directors who would compose the corporation’s Board of Directors would be between 3-12. The chairman and most directors require to be the citizens of the United Arab Emirates. The responsibility of the stakeholder in a public shareholder company has boundaries to the amount of their fund assistance. All the stakes of the corporation would require similar rights and would be joined into a stake registry.

Private Shareholding Company 

Same as the public shareholding company, this corporation also not required less than three stakeholders. The minimum capital specified for such a corporation is around AED 2 million. Shares aren’t provided to the general public in this formation. It is the reason why this is needed that the incorporating documents of a private shareholding company specifically bans in advance and giving of stakes to the public.

Branch / Representative Office 

A domestic or overseas corporation can establish its branch or representative office in the emirate of Dubai. The branch office or representative office has nearly a similar formation process and needs, but they act as their parent corporations uniquely. A branch office runs similar kinds of business activities as per its parent corporation. But this cannot import products of its parent corporation.

This office is formed under the name of its parent corporation. On the flip side, a representative office can just enable the activities of its parent corporation. Such as civil corporations, the hiring of a local service agent is needed for the branch or representative office of domestic and overseas corporations.

Joint Venture 

A joint venture is commonly installed by two or more individuals or lawful units. The lawful processes of a joint venture can be just completed under the name of the partners who must be a citizen of the country. The government of the Dubai emirate precisely says that in any of these business formations, the participation of the citizen of the UAE shouldn’t be fewer than 51%. Although, for special zones such as free zones, overseas citizens can hold a business completely.