Legal Business Structures in Dubai

These structures are applicable to new businesses set up within Dubai, excluding all free zones

The Department of Economic Development lays down acceptable legal structures for companies based in Dubai. The rules and regulations for each of these vary accordingly and the categorisation is based on the ownership of the firm. If you are a foreign national, you may want to go for a free zone license if you want 100 per cent ownership of your business.

1. Sole Proprietorship

A sole proprietorship firm is a legal entity owned and operated by a single individual. He/she will be in complete control of operations and profits, while being 100 per cent liable for debts or any other financial obligations.

Things to know

1. A commercial or industrial type sole proprietorship can be owned only by UAE nationals or GCC nationals.

2. The owner of a consultancy type of sole proprietorship should have a scientific qualification for the activity selected.

3. A sole proprietorship firm can have only one manager.

4. A sole proprietorship has no minimum requirement for business capital.

5. Trade name should be related to the activity.

6. A sole proprietorship can have branches, which can perform all activities included in license of parent firm.

7. The firm and its branches can be sold but industrial or commercial type of firm can only be sold to UAE nationals or GCC nationals.

2. One-person company

A limited liability firm owned by an individual or a corporate body is called a one-person company. The difference between sole proprietorship and this legal form is that the liability is limited to the shares held by the owning entity.

Things to know

1. A UAE national or GCC national can set up and own this legal form of firm.

2. A corporate body which is 100 per cent owned by UAE or GCC nationals can own such a firm.

3. The owner is a shareholder and his liability is limited to the value of the shares he holds.

4. Share capital is as recorded in the Memorandum of Association

5. The trade name should include owner name, legal form (one person co.) and end with LLC.

3. Civil company

This is a partnership for professionals in recognized fields such as doctors, lawyers, engineers and accountants.

Things to know

1. Partners of any nationality can be involved in this form.

2. If the partners do not include any UAE or GCC nationals, the firms needs a local service agent.

3. If the company is involved in engineering activities, one partner should be a UAE national who owns no less than 51 per cent of the business.

4. If the company is involved in consultancy activities, the firm must be owned by professional partners practicing the same activity, with 100 per cent ownership.

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