UAE has been in the news recently with a recent study ranking the country as one of the most trusted nations in the world. With timely strategized economic diversification projects being implemented, UAE has become a desired location to live, work and open a UAE company setup. As an international business powerhouse with world-class facilities and affordable company incorporation solutions, every business structure requires a unique approach to incorporate and establish its roots properly. Here is what every investor needs to understand about the different types of companies in UAE.
A sole proprietorship is an entity owned 100% by an individual, has control over all its operations and holds 100% shares to any profits. Similarly, any debts or financial duties will be liable to its owner. Although such legal forms are open to most business activities, some general rules must be obeyed before a sole proprietorship can proceed.
Recognized professions such as surgeons, doctors, accountants, engineers and lawyers can open a Civil Company in UAE. As the company can have partners owning 100% shares, the activities allowed for the civil company can only be from professional businesses. More specifically, such activities are narrated as physical or intellectual, practiced by one or more natural persons under a defined capital. To open a civil company some rules must be followed for successful incorporation
Limited Liability Company
LLC is one of the most popular forms of company registration in UAE, where minimum of 2 or maximum of 50 shareholders can invest-in and become liable only to extent of their shares individually – profit and loss is divided equally between parties. Aside from professional businesses and banking sector, LLCs can conduct any commercial or industrial business activity in the jurisdiction.
Private Shareholding Company
Private Shareholding Firm, also known as Private Joint-Stock Company is formed through a minimum partnership of AED 2,000,000 from at least 3 investors. Such legal structures are compatible with all sorts of commercial and industrial activities besides professional businesses.
Public Shareholding Company
Public Share Holding company is defined as a legal entity whose capital is a minimum of AED 10,000,000 with transferable shares of equal value with each shareholder liable only to the extent of their capital. During the company incorporation process, the trade name must not be from any partnering investors, except if the name is a patent of a shareholder or if the name is entitled to store belonging to the shareholder. This also means applying “Public Shareholding Company” in its trade name and corporate identity.
Branch Office- Definition / Ownership Rules
In simple terms a branch office is a dedicated outlet of a company. Though physically apart, branch office does not constitute as a separate legal entity. As a functional means to expand and grow business reach across countries, branch offices serve as an operational vessel to establish company presence in new regions and enhance prospects of sale and revenue.
Types of Branch Offices
Foreign Company Branch
A Foreign company branch office is can be established in UAE with 100% ownership of the parent company. The branch office will operate as its headquarters in the region, however, import of goods is only permissible through a local trading firm.
UAE Company Branch
A UAE company branch is a basically an extension of a UAE–based company that expands it parameters by establishing a branch within UAE which undertakes one or more than one activities legislated in the main company license. Companies with multiple branches in UAE can carry out different business activities if complies with main company license.
Free zone Company Branch
A free zone company branch originates from UAE’s free zone jurisdiction with the purpose to expand operations in other zones across UAE. A free zone company branch office can be opened in mainland by acquiring license from DED, given the owner has an Emirati shareholder. Companies who cannot produce a local shareholder can get approval from Ministry of Economy and avail the services of a Local Service Agent.
GCC Company Branch
Much like UAE company branch, a branch of a GCC-based company is allowed to undertake one or more than one activities as legislated in the main company license. Companies with multiple branches can register for different business activities as permitted in their main company license.
Free zone Company
Free Zone company is a multi-shareholder legal structure comprising of 2 to 5 stakeholders. Free zones are incorporated under geographically defined jurisdictions spread all across the UAE. With exclusive benefits, specialized incentives and pro trading policies, UAE is currently world’s most top-ranked markets for business setup, especially in Dubai free zones.
How can IBG Help?
IBG Consulting Middle East is a 360° business consultancy solution with a successful track record of establishing world recognized companies in UAE. We offer A-Z incorporation services for all types of business structures, legal entities and company jurisdictions in UAE. Our competitively priced premier services have helped over 300 companies, across jurisdictions and company types in UAE with impeccable results that we pride ourselves with. Please take a tour of our website to learn more about our affordable UAE company formation packages at ibgme.ae