Sponsorship in Dubai UAE

Limited Liability Company (LLC) is the most common form business in UAE. A Limited Liability Company can be formed by a minimum of 2 and a maximum of 50 shareholders whose liability is limited to their shares in the businesses capital.

Most companies with foreign partners have opted for the Limited Liability Company, due to the fact that this is the only option that’ll give maximum legal ownership i.e. 49% to the expatriates for a local business. As it is mandatory to have a UAE national as a partner in the LLC (51% shareholding) prospective investor has the option to choose the one UAE national (sponsor) as a partner in the company.

L.L.C is flexible and differential profit sharing arrangements also possible. This permits the foreign investor a great edge as 51% legal equity is with local partner.

In Public Shareholding Company or private limited company, The Chairman and majority of the directors must be UAE nationals. And also minimum 51% of the shares should hold by the Emirates.

In such companies a shareholder’s responsibility is limited to the amount of shares they hold. At least AED 10 million (US $2,724,796) required to start a Public share holding company with a nominal face value of AED1-100,and for a insurance and investment companies is AED 25 million and AED 40 million for a banking entity.

And other necessities for set up a private limited company is preparation of a organizers agreement, a prospectus or invitation for public subscription supported by an overall business plan or feasibility study and an auditors certificate, a due diligence survey, a memorandum and articles of association.

A PJSC must have at least 10 founder members and its management should be vested in a board of directors consisting of a minimum of three to a maximum of fifteen persons whose term of office may not exceed three years. The founder members may only hold 35% of the share capital, as 65% is required to be offered to the public. Companies engaged in banking, insurance or financial activities can be run as public share holding companies.

The Commercial Companies Law covers the formation and regulation of branches and representative offices of foreign companies in the UAE and stipulates that they may be 100% foreign owned, provided a local service agent is appointed.

A branch office, legally regarded as part of its parent company, is a full-fledged business, permitted to perform contracts or conduct other activities as specified in its license. A branch office may only be engaged in activities similar to those of its parent company.

Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local service agents. Local service agents – also sometimes referred to as sponsors – are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum fee per annum. The time required to form a branch of a foreign company is approximately 3-4 weeks from the date of receipt of all the documents.

Business plan, current profile and last two year financial statements must be submitted to prove the credibility of the company. The Companies that are of trading nature must have manufacturing facilities at its country of origin. All branch ventures are subject to an approval of the Ministry of Economy.

A representative office, on the other hand, is limited to promoting its parent company’s activities, i.e. to gather information and soliciting orders and projects to be performed by the company’s head office. Representative offices are also limited in the number of employees that they may sponsor. Procedures are same for representative office setup except two year financial statements are not mandatory.

The detailed procedure and cost breakup can be availed via a request.