- August 16, 2020
- Posted by: DBS Editorial Team
- Category: Business Setup Services in Dubai
What are the types of legal structure for company formation in Dubai?
Company formation in Dubai as well across the various Emirates is done in accordance to the UAE commercial law. However, there are two types of company registrations in Dubai. The first one is established under the Commercial Companies Law and the second one is registered under the Civil Companies regulated by the Civil Code. As the name suggest the legal structure for company formation in Dubai defines the structure of the business or establishment. The Federal Law No. 8 of 1984 states that the legal business structures which were amended by Federal Law No. 1 of 1984, Federal Law No. 13 of 1988, Federal Law No. 15 of 1998 and Federal Law No. 4 of 2000.
Every Emirates has a Department of Economic Development. The Economic Department is responsible to provide license and formulate the legal structure of the company. The right legal structure for company formation in Dubai provides commercial opportunities as well as dynamic business prospects. Understanding that a legal structure in a business is one of the most important aspects of company registration in Dubai. Make sure that you chose a legal structure that suits the nature of your business activity and that delivers a maximum outcome.
Here are the types of legal structures majorly used for company formation in Dubai:
A sole proprietorship is a commercial entity owned and operated by a single individual. Under such a structure there is complete control of operations and profits within the organisation. Also, single proprietorship is liable for any kinds of debts and solely takes care of any other financial responsibilities. Only UAE national and a national from the GCC countries (subject to conditions) can register company in Dubai under this legal form.
The one-person company registration in Dubai is a limited liability company owned by a single individual. A one-person company is different from a sole proprietorship in terms of limitation on the shares held by the owning entity. He or she can be owned by a UAE national or a GCC national, with limitations on the share capital he or she holds.
Civil company registration in Dubai is a collaborated company made-up of professionals in a filed such as doctors, teachers, lawyers and more. In simple terms, if there are more than one owner in a company which is setup under a professional license – the company is known as Civil company.
Limited Liability Company
Limited liability company in Dubai has two to 50 shareholders; each shareholder is liable only to the extent of his or her share – meaning a shareholder cannot be held personally liable towards the loss or debt of the company. Another crucial factor of starting a business in Dubai or around UAE, under an LLC business setup allots 51% of shares to the local partner.
Partnership company registration in Dubai as the name suggests is a company owned by two or more partners. It may be a general partnership company or a limited partnership company.
Branch offices simply states a company branch is operated in a given region wherein the headquarter of the company may or may not be in Dubai.
SME licenses provides 100% owned businesses by UAE Nationals and is free to adhere to any given legal formats. Moreover, SME’s are known to be the backbone of the Dubai economy as it represents 95% of establishments in the region.
Intelaq / Home Based Business
Only UAE nationals can apply for this kind of legal structure that allows to do business from home in Dubai. However, the business license holder under Intelaq cannot hire or sponsor any staff but can engage with contractors.
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