Legal Types in UAE for Business Setup | edtechreader

A timely strategy for economic growth in the UAE, enhancing FDI inflows, accelerating GDP, and globally accredited favorable Dubai company setup rules have formed the nation to talk of each overseas businessman today. As a powerhouse of business brimming with acquisition possibilities and top-class features, the country fosters different business activities within its technical jurisdictions. As each business requires a different framework to integrate, the country features distinct legal frameworks to aid corporations start, developing, and prospering.

Here Is A List Of Legal Types Of A Dubai Company Setup 

  1. Sole Proprietorship 

As the name indicates, a sole proprietorship is held by a single person who has right over all its functions and owns full stakes in any profits. This business unit is a simple form of company framework in the country and doesn’t imply any distinctive needs other than holding a residence permit in terms of an overseas citizen.

Features Of A Sole Proprietorship 

  • An individual of any nationality can carry a professional sole proprietorship.
  • Only GCC and UAE citizens can hold a sole proprietorship that is industrial or commercial which ought to be held fully.
  • If the proprietor isn’t a UAE citizen, a local service agent is employed for this sort of Dubai company setup.
  • The local service agent is supposed to manage license needs and government-related tasks for the company.
  • A sole proprietorship does not need minimum share capital.
  • There should be a connection between the company name and the type of business activity.
  • A sole proprietorship can have solely one manager.
  1. Limited Liability Company 

A limited liability company in the country is the highly chosen structure of a business by businessmen. The liability of the partners in a limited liability company is confined to the period of their acquisition into the corporations.

Features Of A Limited Liability Company 

  • Consultancy and professional activities can’t be run by this structure of business except, for insurance, banking, or investment.
  • A limited liability company can run any commercial or industry business activity.
  • 51% equity must be held by the UAE citizen and the rest 49% can be maintained by the business owner.
  • Limited liability company establishments need a UAE-certified auditor.
  • A minimum of 2 and a maximum of 50 stakeholders can make an investment in the corporation.
  • As a functions business framework, limited liability companies should hire 1 top 5 managers who can be also elected from the lawful partners.
  1. Private Shareholding Company 

This kind of business is also recognized as a Private Joint Shareholding Company in the country. This can be built through a minimum partnership of AED 5,000,000 from nearly 3 investors. Such lawful frameworks are compatible with all kinds of industrial and commercial business activities apart from a professional business.

Features Of A Private Shareholding Company 

  • A permission letter from the Ministry of Economy should be acquired to start a private shareholding company.
  • The company should hire one manager.
  • The minimum capital needed is AED 5,000,00.
  • The corporation can conduct over one branch. Each can go through one or all the business activities comprised of the major business license.
  • Around 51% of the stakes should be held by the citizen of the UAE.
  • A GCC citizen can hold complete shares.
  1. Public Shareholding Company 

A public shareholding company is described as a legal unit whose capital is around AED 30,000,000 with transferable stakes of equal value with each stakeholder liable just to the extent of their capital. A public shareholding company is even known as a public joint stock company in the country. The business name of the corporation should not be from any partnering person except in case the name is a patent of a stakeholder or in case the name is permitted to store assets to the stakeholder.

Feature Of A Public Shareholding Company 

  • Partners can practice any commercial, industrial, or professional activities as per the business rules of the Economic Department.
  • The company should have around 5 founding members who are UAE citizens, holding between 30% and 70% of the capital stakes.
  • The corporation should have a maximum of five hired managers according to the business rules of the Economic Department.
  • The corporation can have over one branch.
  1. Civil Company 

Popular professions like doctors, engineers, accountants, and lawyers can start a civil company in the country. The corporation can have partners holding full shares and the business activities permitted for the civil company can be just from a professional business. Particularly, such business activities are narrated as intellectual or physical, practiced by one or more natural persons under a described capital. To start a civil company, certain rules should comply for successful integration.

Features Of A Civil Company 

  • In case an overseas company invests as a partner in a civil company, it should be from a similar kind of business activity.
  • A Dubai company setup procedure is required by a local service agent if the owner is an overseas citizen.
  • Partners from any nationality can begin this company.
  • In case the corporation is included in engineering activities, one partner must be a country citizen.
  1. Partnership Company 

Under this type of business unit, the ownership is shared by two or more partners who share benefits and losses as per the determined ratio.

Features Of A Partnership Company 

  • General partners should be made by UAE citizens in an easy limited partnership. Partners of other nationalities should be limited partners
  • General and limited partners can own the same amount of stock.
  • Limited partners must not intervene in management matters.


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