Limited Liability Company in UAE On-shore
A limited liability company (LLC) is one of the widespread companies formed in the UAE. The main reason for its prevalence is that foreigners can participate as partners in an LLC and their liability is limited only to the extent of their share in the capital of LLC. According to the UAE Federal Commercial Companies Law, 51% of shares of LLC shall belong to a UAE national and 49% of shares can be owned by a foreign individual or entity. Profit and loss distribution can be mutually agreed by the parties at different ratios.
An LLC can be formed by partners of not exceeding fifty but should not be less than two. As a general rule, the Law requires a minimum amount of AED 300,000 share capital divided into equal shares with a minimum face value of AED 1,000. However, at present, there is no requirement to deposit the share capital amount in a bank account while incorporating LLC. Nevertheless, for certain business activities the amount of share capital can be different. Shares of an LLC shall not be offered to the public. The company may not resort to public subscription to establish or increase its capital, or to secure loans, and it may not issue any negotiable stocks or shares.
An LLC is largely formed to carry out commercial business activities. Commercial business activities are defined in the Article 5 – 6 of the UAE Federal Law No. 18 of 1993 on Commercial Transactions and include the activities such as trading, import-export, real estate development, brokerage, facilities management, construction, manufacturing and others. LLC can also be formed to conduct certain professional activities such as restaurant, cafeteria, medical clinics and some other activities.
At Mimo Legal Consulting we have the expertise you need to setup your business in the UAE. We will help you to choose the right legal structure and license based on your requirements and business objectives. We can also assist you in opening your bank account and acquiring residency visas in the UAE. If you are interested in setting up your business in the UAE, please contact us for further information.