FAQ’s on Setting up a Limited Liability Company (LLC) in Dubai

What is an LLC?

An LLC is one of the most common forms of establishment of a company in Dubai for foreign investors. A Limited Liability Company as defined by Article 218 of the UAE Commercial Companies Law is a company in which the liability of its partner is limited only to the extent of their shares in the capital of the company. The number of shareholders in an LLC may range from 2 to 50.

Can an LLC be 100% foreign owned?

No, an LLC cannot be 100% foreign owned. A foreign shareholder can hold up to 49% of the shares of an LLC. A balance of 51% shares of an LLC is required to be held by a local Emirati sponsor, also known as a silent partner. The silent partner generally assists in liaising with the local government and filing the necessary paperwork with them. However, the sharing of profits and losses between the foreign and Emirati sponsor can be different compared to the actual shareholding.

Can an LLC engage in any kinds of activities?

An LLC can engage in all kinds of activities except for banking, insurance or money investment.

What are the advantages of setting up an LLC?

• Access to the UAE Markets: A 100% foreign owned company set up in the Free Trade Zone (FTZ) of the UAE cannot provide services outside of the FTZ in which it is incorporated. Therefore, setting up an LLC provides a company the flexibility to operate and access the entirety of the UAE markets.

• Customs Duty: An LLC is not required to pay the 5% customs duty applicable on imported goods.

• Easy Set Up: An LLC can be incorporated within a period of 1 week by submitting the necessary documents to the Department of Economic Development.

• No Fixed Capital: There is no fixed capital required to open an LLC.

• Bank Account: It is easier to open a bank account in the UAE upon setting up an LLC.

We at D’Andrea & Partners Legal Counsel have a team of experts to advise you on setting up an LLC in Dubai. Do get in touch at info@dandreapartners.com for any queries.