DED (Dubai Economic Department) has divide the all the business activity in three different categories:-
Commercial License – All the activities relating to Trading is covered in this category and as termed as LLC formation
Professional License – All the activities relation to Services, Profession, artisans and Craftsmen are covered in this category.
Industrial License – All the activities related to Manufacturing are covered in this category.
All the above license is issued by Dubai Economic Department. There are certain activities which require approval from certain ministries and other government authorities. Below are the list of activities requires approval from external ministries:-
- Restaurant License fall under Dubai Municipality
- Rent a Car License fall under RTA (Road and Transport Authority)
- Advertising, Publishing and Printing fall under National Media Council
- Banking service and Financial Institutions fall under Central Bank of UAE
- Insurance License fall under Insurance Authority
- Industrial and Manufacturing License fall under Ministry of Economy
- Pharmaceutical License fall under Ministry of Health
- Contracting License fall under Dubai Municipality
- Logistic, Cargo packaging, Cargo Clearing License fall under Dubai Maritime City
- Travel and Tourism License fall under DED
- Sports Activity License fall under Dubai Sports Council
- Jewellery and Precious metals License fall under Dubai Protective System
All commercial license and industrial license in Dubai needs to be registered under Dubai Chamber of Commerce and Industry.
Some of the License needs Bank Guarantee and additional charges to be paid to the third Party
Inbound Tourism – Bank Guarantee of Dh100,000 to be deposited in Bank
Outbound Tourism – Bank Guarantee of Dh200,000 to be deposited in Bank
Once the license is cancelled the deposit will be refunded
Travel Agency – An amount of Dh100,000 to be deposited at Department of Tourism & Commerce Marketing. Once the license is cancelled the deposit will be refunded.
Building Contracting Companies
Building Contracting Company License needs to pay Dh10,000 extra at the Department of Economic Development as one time fee.
General Trading License needs to pay Dh15,000 extra at the Department of Economic Development as one time fee.
Custom Broker license requires deposit of Dh50,000 to be paid at Dubai Customs. The deposit can be refunded on cancellation of License.
Following fees need to be paid to RTA at the time of Initial Approval
For Rent a Car activity fee Dh5000
For Bus Rental activity fee Dh1000
For Passenger Transport by rented Buses activity fee Dh 1000
Telecommunications Equipment Trading
A one-time fee of Dh5500 to be paid at Telecommunications Regulator Authority (TRA).
Security Service & Surveillance Services activity
This activity requires approval from Department of Protective Systems.
Oilfield & Natural Gas related activities
This activity requires approval from Ruler's Court
This activity requires approval from Central Bank of UAE and Department of Protective Systems
Jewellery & Precious Metal, SIM Card Trading, Stamp & Seal Making
This activity requires approval from Department of Protective Systems
A minimum of 2000 square feet is required for getting the approval from DED.
For any other license an Ejari of 200 square feet is required to process the License.
In LLC (Limited Liability Company) the local Emirati holds Fifty-one per cent of shares in the Trade License and the balance 49% is held by the Expat. This is the general requirement for all UAE established companies.
In Professional License 100% ownership can be an Expat under DED License. The Local Emirati will be the Local service agent in the License.
100% Ownership by Expat without Local sponsor is possible for the below:
- In Any Free Zone Expat can be 100% Owner
- Company owned by GCC national
- Branch of a Foreign company
- Representative Office of Foreign Company.
Types of Legal Structure in Mainland
In Dubai all business entities fall under commercial, professional & sole establishment and registered under DED (Dubai Economic Department) are known as Dubai Mainland License. All the Emirates, Abu Dhabi, Sharjah, Ajman, Ras AL Khaimah, Umm AL Quwain & Alain follow the same practise. In all Mainland Commercial License the Local Emirati is 51% shareholder or a local service agent in Professional License.
Limited Liability Company(LLC)
In Dubai Mainland LLC formation falls under Commercial category and can be formed with a minimum of Two shareholders or a maximum of 50 shareholders in the license. The liability of the shareholder is limited to the shares invested in the company. In this license the 49% shareholders can be an Expat and 51% shareholder can be a Local Emirati.
At Present there is no need for Minimum capital requirement to form the company as in August 2009 the minimum capital requirement law was abolished. In this license the Partners can appoint a Manager to run the business among them or to a third party. The minimum share required to get a Partner Visa in LLC is 24% in the license.
To form a LLC license we at PRO Desk assist in setting up a business in Dubai by following the below steps:-
Trade Name Reservation
The first and foremost step in registering the License in DED is to select a name and it needs to be approved by DED.
On completing the Trade name reservation, we need to get the Initial approval for the activity from DED.
Drafting of MOA & Legalisation
On receiving Initial approval, the MOA needs to be drafted in English & Arabic and get it notarised from Dubai court.
The Tenancy contract required to submit the documents to the DED for final approval. Minimum of 200 square feet is required.
On submitting all the above documents the company will be registered in the Commercial Register. The license will then be issued by the DED.
Branches and Representative Offices of Foreign Commercial Companies
Those Foreign companies who are interested to open a Branch or a Representative office in Dubai are governed under Commercial Companies law to do the formation in Dubai and other Emirates. These companies can be 100% owned by the foreign entity with the appointment of Local service agent.
The term Local service agents mean the UAE nationals or a firm which is owned 100% by UAE national. These local service agent are also referred to as sponsor for the license and are not involved in the day to day operations, but helps the companies in getting Establishment Card, Company Labour Card, etc and are being paid as a lump sum in terms of remuneration and or a percentage in profit or turnover as per the agreement made. The Branch of a Foreign companies are not allowed to conduct any Importing activity except for re-export.
To form a Branch of a Foreign Companies or Representative office license we at PRO Desk assist in setting up a license in Dubai by following the below steps:-
The first and foremost step is to get the approval from Ministry of Economy and Commerce by submitting the Local service Agreement with a Local Emirati or a company 100% owned by Local Emirati.
The application will be forwarded to the DED for getting the Initial approval.
Federal Foreign Companies Committee
The activity listed in the application will be then forwarded to the Federal Foreign Companies committee for their approval.
Ministry of Economy
The Ministry of Economy will then issue the Certificate to carry out the activity mentioned in the application.
With the copy of the Certificate issued from MOE (Ministry of Economy) submit the final application to the DED to register in the Commercial Register.
Dubai Chamber of Commerce
The Branch license then must be registered in the Dubai Chamber of Commerce.
PRO Desk assists Investors or clients who want to set up a Professional License in Dubai. This activity related to any Profession falls under this category. The Foreign Expat can be 100% owner in the License and the legal Entity of the License could be a Sole Proprietorship or Civil company. Under this license the Local Emirati will be appointed as a Local Service Agent, however he doesn’t have direct involvement in the business and for his appointment he is remunerated with a lump sum fee annually. The Local service agent assists the companies in obtaining Establishment card, Company Labour card, Visas, etc. We at PRO Desk assist clients in getting good Local service agent at a very reasonable rate.
Joint Venture Companies
A Joint Venture company is bound by a contractual agreement between two or more parties like Foreign entity and Local Entity establishing license to conduct a desired activity. The Local party should be 51% shareholder in the License; however the profit and loss can be shared as per the agreement between the two parties. This kind of formation is best suitable for companies who are working on a specific project.
Public and Private Shareholding Companies
Those companies who would like to start a business comprising of Insurance, banking or financial services should run as a public shareholding companies as stipulated in the Law. Companies who want to open a branch license in the field can establish a Branch of a Foreign company or a representative office.
The capital required for a Public Shareholding companies for a large projects is Dh. 10 million and for a Private shareholding company is Dh. 2 million. As per the law the Chairman and the majority of Board directors must be a UAE local nationals.
The UAE provides an option for GCC to set up a business in Dubai without involving Local Emiratis as a Sole Proprietorship. Inorder to have Partnership with Expat without local Emirati the Investment for a particular project should be minimum of Dh. 10 million and should have sound business knowledge. The business fall under this categories are Tourism, services, Industrial activity and any other such business which will add value to the UAE economy.