The Federal law states the different categories of business organisation that can be set up in UAE. It also lays down that a local equity of not less than 51% is necessary in a commercial company in UAE.
The seven categories of business organization defined by the Law are:
- General partnership company
- Joint venture company
- Public shareholding company
- Private shareholding company
- Limited liability company (LLC)
- Share partnership company
Dubai limited liability companies must have at least one UAE national partner holding at least 51% of the paid-up capital.
Free zone companies allow 100% foreign ownership.
Several types of companies can be set up in Dubai depending on their business objectives. Before deciding on the type of company one must select the category of business license as the Dubai Department of Economic Development regulates three types of business licenses. These are:
- The commercial license - The commercial license is available for types of companies involved in trading activities, among which sales.
- The industrial license - The industrial license applies to companies involved in manufacturing, processing and packaging activities.
- The professional license - The professional license applies to personally offered services such as consultancy and is suitable for sole proprietors in Dubai.
The registration of a company in Dubai provides many benefits to foreign investors, that is why the Emirate has flourished during the last few years. Among these benefits are:
- The simple regulatory system
- The tax-free economy
- The lack of capital gains and corporate tax in Dubai
- The possibility of owning real estate
- Multiple currency available bank account for companies
- The skilled Dubai workforce