Mainland (local) company registration

Registration is the first and most important step in setting up own business in the United Arab Emirates and expedient for those companies planning to carry out their activity in retail business as shops, café and restaurants, service providers and consultants, car rent agencies and medical centers. The license to such activity may be actually obtained in the most of free trade zones in the UAE, however it is often restricted. In addition, any travel or real estate agencies, passenger carriers or oil and gas companies may be incorporated for UAE only.

The most common legal forms of companies registered in the UAE are LLC (Limited Liability Company) and Civil Company. In order to register your trade company in the UAE, you should form your business in the form of LLC and involve the local citizen (investor) as the major shareholder who shall hold 51% shares in the company according to the law. Actually, the relevant agreement is concluded with the investor immediately after the state registration of the company, under which the investor refuses to be involved in management of the company’s affairs, as well as waives any claims for profit, for the proper consideration in the form of the fixed annual fee. But in such a case it is important to remember that neither visa, nor any required authorizations, may be obtained without the investor’s signature, therefore you should be serious in choosing the investor. 

For the companies providing any professional services it is more expedient to register their business in the form of Civil Company, so in most cases the founders and employees of such companies are required to certify their competence. The undoubted advantage of such legal form is that the foreign investor may hold 100% share in the capital. In such a case it is binding to appoint any local citizen to act as agent in relations with the government agencies in the UAE, who shall not be entitled to claim for any part of business, however neither public document may be executed without his signature.

The procedure for incorporation is as follows: reservation of the firm name of the company, conclusion of the contract of lease for office/trade spaces, obtaining the prior authorization registration issued by the Department of Economic Development of the respective emirate, conclusion of the partnership agreement and applying for the license that is issued within 4-5 business days.

The amount of fee for the licensing depends on the legal form and specificity of activity and includes the amount of 5% of the annual rental fee for the office premises. The total amount of fee may not exceed 10-15 thousand Dirhams. The companies registered for operating in the UAE should not freeze their authorized capital in the bank account but state its amount in the memorandum and articles of association.

The companies engaged in import or export are subject to further registration with the Customs House of the United Arab Emirates and the trade companies should ensure annual registration with the Chamber of Industry and Commerce in the respective emirate.

For more information about fee, requirements and procedure for registration visit the official web-sites of the Departments of Economic Development.

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