- According to the Company Act 2015, anycompany registered in Dubai must have one or more UAE citizens as partners who will own at least 51% of the share capital in the company.
- Except Joint Liability Companies and Simple Commandite Companies
- According to the Company Act 2015, anycompany registered in Dubai must have one or more UAE citizens as partners who will own at least 51% of the share capital in the company.
- All companies must have a Memorandum of Association which will be drafted in Arabic and legalized by a public notary.
- In order to register a public joint stock company a minimum share capital of 30 million AED will be required, while for a private joint stock company a minimum share capital of 5 million AED was established
- The basic requirement for all business activity in Dubai is one of the following three categories of LICENCE:
- Commercial licences covering all kinds of trading activity;
- Professional licences covering professions, services, craftsmen and artisans;
- Industrial licences for establishing industrial or manufacturing activity.
- FORMS OF COMPANIES: The company shall take one of the following forms:
- Joint Liability Company.
- Simple Commandite Company.
- Limited Liability Company.
- Public Joint Stock Company.
- Private Joint Stock Company.
- ARTICLE 12- NAME OF THE COMPANY
- The company shall have a trade name, without contravention of the public order
of the State. The name shall be followed by the legal form of the company. No
company may be registered in a name previously registered in the State or in any
similar name to the extent that it may lead to confusion.
- The company may change its name to another name by virtue of a special Resolution issued by its General Assembly and the like, as approved by the competent authority and as acceptable to the registrar. The change of the name of the company shall not prejudice its rights or obligations or the legal proceedings initiated by or against the company. Any legal proceedings that have already been initiated by or against the company shall also continue in the amended name of the company.
- ADDRESS AND CORRESPONDENCES OF THE COMPANY
- Every company shall have a registered address in the State to which notices and correspondences shall be dispatched.
- DRAFTING OF THE MEMORANDUM
- The Memorandum of Association of a company and each amendment thereto shall be made in Arabic and
attested by the Notary Public, failing which the Memorandum of Association or the amendment thereto shall be invalid. If the Memorandum is issued in a foreign language in addition to Arabic, the Arabic text shall be the applicable text in the State.
- REGISTRATION OF THE MEMORANDUM OF ASSOCIATION OF THE COMPANY WITH THE COMPETENT AUTHORITY
- Company’s Memorandum of Association and any amendment thereto shall be registered in the Commercial Register with the competent authority to be effective.
- The companies shall notify the competent authority and the Registrar in writing within 15 (fifteen)working days upon the occurrence of any amendment or change in the registered particulars of the company, including its name, address, share capital, number of shareholders or legal status.
- EVIDENCING THE MEMORANDUM OF THE COMPANY BY THIRD PARTIES
- A third party may prove the presence of the Memorandum of the Companyor any amendment thereto by all means of proof. Such third party may hold to the existence or the invalidity of the company against the shareholders.
- ACCOUNTING RECORDS
- Every company shall keep accounting records showing its transactions to accurately reveal at any time the financial position of the company and enabling the partners or shareholders to confirm that the accounts of the company are properly kept in accordance with the provisions of this Law.
- Every company shall keep its accounting books in its head office for a period of at least 5 (five) years from the end of the financial year of the company.
- The company may keep an electronic copy of the original of the documents and records kept and deposited therein in accordance with the controls issued by a Ministerial Decision
- FINANCIAL YEAR OF THE COMPANY
- Every company shall have a financial year as determined in its Articles of Association, provided that the first financial year of the company shall not exceed 18 (eighteen) months, but at least 6 (six) months, to be calculated from the date of registration of the company in the Commercial Register with the competent authority.
- The subsequent financial years shall consist of consecutive periods, each of 12 months commencing directly upon the expiry of the preceding financial year.
What are the types of companies which can be set up in Dubai?
Dubai Joint Venture Company
A joint venture is a contractual agreement between a foreign party and a local party licensed to engage in the desired activity. The local equity participation in the joint venture must be at least 51%, but the profit and loss distribution can be prescribed. There is no need to license the joint venture or publish the agreement. The foreign partner deals with third parties under the name of the local partner who – unless the agreement is publicised – bears all liability.
Dubai Public and Private Shareholding companies
The law stipulates that companies engaging in banking, insurance, or financial activities should be run as public shareholding companies. Foreign banks, insurance and financial companies, however, can establish a presence in Dubai by opening a branch or representative office.
Shareholding companies are suitable primarily for large projects or operations, since the minimum capital required is AED 10 million (USD 2.725 million) for a public company, AED 40 million for banks and AED 25 million for insurance and investment companies, and AED 2 million (USD 0.545 million) for a private shareholding company. The chairman and a majority of directors must be UAE nationals and there is less flexibility of profit distribution than is permissible in the case of limited liability companies.
- A minimum of 25% of the shares of a Public Shareholding Company must be offered to the general public.
Dubai Limited Liability Company
A limited liability company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. Such companies are recognised as offering a suitable structure for organisations interested in developing a long term relationship in the local market.
Companies Law stipulates that an LLC may engage in any lawful activity except for insurance, banking and the investment of money for others.
- In Dubai, the minimum capital is at the time of writing AED300,000 (USD82,000), contributed in cash or in kind. While foreign equity in the company may not exceed 49%, profit and loss distribution can be prescribed. Responsibility for the management of a limited liability company can be vested in the foreign or national partners or a third party.
The following steps are required in establishing a limited liability company in Dubai:
- Select a commercial name for the company and have it approved by the Licensing Department of the Economic Department;
- Draw up the company’s Memorandum of Association and have it notarised by a Notary Public in the Dubai Courts;
- Seek approval from the Economic Department and apply for entry in the Commercial Register;
- Once approval is granted, the company will be entered in the Commercial Register and have its Memorandum of Association published in the Ministry of Economy and Commerce’s Bulletin;
- The licence will then be issued by the Economic Department;
- The company should then be registered with the Dubai Chamber of Commerce and Industry.
Dubai Branches and Representative Offices of Foreign Professional Companies
Branches and representative offices of foreign professional firms may be 100% foreign owned provided UAE nationals or 100% UAE owned companies are appointed as local agents. As mentioned previously, such agents are not involved in the operations of the firm but assist in obtaining visas, labour cards etc and are paid a lump sum as remuneration. The Economic Department is the authority in charge of licensing such branches or representational offices.
Dubai Sole Proprietorships
In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. Such firms may engage in professional or artisan activities but the number of staff members that may be employed is limited. A UAE national must be appointed as local service agent, but he has no direct involvement in the business and is paid a lump sum and/or percentage of profits or turnover.
Company Secretary GAURAV SHARMA+919990694230 Connect on Watts App with Gaurav Email us [email protected] Official Blog Fema India Experts Connect with our Facebook Page:- Click and Like our Page Subscribe our Email updates like other 21,000 Members, Free/Easy/Comfortableway
