How to Form a Local Business in the UAE
Ways to form a local business in the UAE
If you choose to open a mainland business in the UAE, foreign ownership is generally limited to 49%, with the remaining 51% to be held by a UAE national. Despite that, there are protections in place to ensure that you as a foreigner still retain operational control over your entity.
Permitted local business types in the UAE
Locally-incorporated bodies may be formed as Civil Companies or under the Companies Law. The Department of Economic Development defines the available legal format for a firm.
Most foreign investors choose to establish a limited liability company (LLC) since foreigners can exert significant control over these legal entities sans minimum capital.
Most mainland company structures require you to enter a national agent agreement. In practice, the national agent’s role is confined to providing specific services such as assisting in communications with government departments (e.g. facilitating visas for foreign company personnel) or undertaking other administrative matters. The annual fee payable to a national agent is a matter of negotiation.
Foreigners in local business in the UAE
There are some restrictions on business activities for non-Emirati citizens but there are safeguards in place to ensure foreigners have protections under the law. They include that the foreign shareholder may appoint all of the company’s directors, as well as nominate the company’s general manager.
The foreign shareholder may have a veto over major decisions of the company and may be entitled to all of the assets of the company on liquidation.