A Limited Liability Company, or LLC, is a type of business structure that protects the owners’ personal assets from any business-related liabilities.
It gives the business its own legal identity and is often chosen by business owners because it is flexible and easy to run.
An LLC protects the personal assets of its owners from any liability that may arise from the business.
Setting up an LLC in Dubai can be an excellent way to take advantage of the city’s favorable business environment and diverse economy.
Dubai city has a strategic location, a stable political environment, and a world-class infrastructure.
With its open and liberal policies, Dubai provides entrepreneurs with a range of options to set up their businesses, including LLC companies.
Let’s understand what is the process of setting up an LLC company in Dubai
- Choose a Business Activity
Select your business type. Dubai is open to various types of businesses, but certain activities require additional approvals from regulatory authorities.
It is essential to obtain the licenses and permits required for your business.
- Select a Local Partner
In Dubai, a foreigner can only own 49% of an LLC company. Find a local partner who will own the other 51% of the business.
This partner can either be an individual or a company registered in the UAE. You can find a local partner through a business center, a law firm, or by networking.
- Reserve a Trade Name
Before registering the LLC, you need to reserve a trading name.
The name should be unique and not already on file with the Department of Economic Development (DED).
You can search the DED database or go to the DED’s website to see if the name is available.
- Prepare the Memorandum of Association (MOA)
The MOA is a legal document that outlines the LLC’s business activities, its shareholders, and the distribution of shares.
The MOA needs to be prepared by a local law firm or a business center and must be notarized by a notary public.
- Obtain Initial Approval
After preparing the MOA, you need to apply for initial approval from the DED.
This involves submitting the MOA, passport copies of shareholders, and other necessary documents.
- Rent Office Space
To obtain a trade license, the LLC must have a physical office space. The office can be a flexi-desk, serviced office, or commercial space.
The type of office space required depends on the business activity.
- Obtain Licenses and Approvals
After obtaining initial approval, you need to apply for the necessary licenses and approvals from relevant authorities.
This includes a trade license, a commercial license, and approvals from groups like the Dubai Municipality, Dubai Health Authority, Dubai Civil Defense, and Dubai Chamber of Commerce and Industry.
- Register for VAT
If your LLC’s annual sales are more than AED 375,000, you need to register with the Federal Tax Authority for Value-Added Tax (VAT) (FTA).
- Open a Bank Account
After obtaining all necessary licenses and approvals, you can open a bank account for your LLC.
You will need to provide the bank with the necessary documents, including the trade license, MOA, and passport copies of shareholders.
Final Thoughts-
Setting up an LLC company in Dubai can be hard, but professionals can help make the process easier.
One such professional service that can help you with setting up your business is XcelAccounting.
XcelAccounting is a reputable accounting and business consulting firm in Dubai that offers a range of services, including business setup, accounting, and VAT registration.
Our team of experienced accounting professionals can help you with every step of the process.
Whether it is from choosing a local partner to getting the necessary licenses and approvals, we will guide you.
With XcelAccounting, you can ensure that your business is set up legally and compliantly, allowing you to focus on growing your business in Dubai.
To find out more about our accounting services in Dubai, set up a meeting or call +971 (0)55 101 0691.
