Paolo Soro

Set Up a Company


The following are the general requirements for the majority of types of companies:

  1. -          The registration of the statute with the Trade Register
  2. -          The authorization of the Emirate territorial jurisdiction
  3. -          Participation in partnership with nationality in the UAE share of at least 51%

Nonetheless there are several exceptions.

A foreign company may decide to operate in the UAE through one or more subsidiaries (permanent establishment), which offer them the advantage of circumvent the limit that requires the 51% of ownership by a local entity, because the subsidiary can be fully owned by the parent company. The foreign company will have to find a local sponsor (UAE citizen) or, in the case of a legal entity, a company owned entirely by UAE residents.

The L.L.C. (which corresponds to the Italian SRL) can be founded by 2 to 50 members responsible only for the capital contributed to the company. It has not been prescribed a minimum capital requirement so far, members can decide on this matter freely. Maximum participation of foreign capital is 49% and the local partner should control 51% of the capital. The distribution of profits and losses can be determined with different percentages. The management position of the company can be assigned to the foreign partner, the local partner, or a third party. Every company need to have an office approved by the Authority, a bank account at a local bank and have to appoint an auditor. The company has to be registered with the Ministerial Department of Economic Development and the Chamber of Commerce of the Emirate. Registration and licensing need to be renewed each year.

In its Jebel Ali free zone, Dubai offers the possibility of forming a IBC. This particular form of company is ideal for those activities that do not require the acquisition of a local office as headquarters (e.g. an holding company), but it prevents the company from running any commercial activity within the UAE. As a rule, however, the shareholders will have no obligations to acquire a visa of the Emirates, or to bank capital, which in fact is merely figurative (the minimum requirement is 1 AED) and even transmit the budget to the local Authority (does not exist, therefore, the obligation to audit the financial statements by an auditor local).

The Sole Establishment (sole proprietors/freelancers) are authorized to pursue an economic activity with unlimited financial liability tied to the person of the owner. Foreigners and people from countries other than the GCC (Gulf Cooperation Council) may carry out, through a Sole Establishment, only the professional activities (non-industrial, or commercial, or agricultural or estate) and have to appoint a local agent (UAE citizen). The local agent does not have to take part in any business activity and his/her role is to maintain the relationship between public institutions, working as a spokesman in order to obtain residence visas. The entity need to have an administrative office in the Emirate and it is subject to approval. The registration and the license have to be renewed every year.

The Representative Branch is a fast and easy solution from an administrative point of view and it is less demanding in terms of financial needs, but its field of activity is limited to marketing and public relations. The amount of 50.000 AED need to be deposit at a local bank as a security. This type of company requires a local agent too that does not have to participate in the business activities, but that maintains the relationship with public institutions, working as a spokesman in order to obtain residence visas. The application have to be submitted by the applicant to the Ministry of Economy and Commerce together with the following documents: certificate of incorporation, articles of association, corporate profile, the last two years of financial statements, the powers delegated to the CEO, in agreement with the local partner prepared in accordance with national law.

The Branch Office can obtain a trade license. This is possible only in the case the parent company is a manufacturing company and the Branch Office is licensed to import in the country for selling only products produced by its parent company. The registration and the license have to be renewed every year.