Corporate Structures for Company Registration in Dubai, UAE

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Corporate Structures for Company Registration in Dubai, UAE

Every applicant for Company Registration in Dubai must choose an appropriate Business Structure before applying for the requisite business license. In this article, we have discussed the eligible business structures as per the RoC in Dubai. The types of business structures eligible for Registration in Dubai with the UAE Authority are as follows:

• Limited Liability Company
• Branch Office
• Joint Stock Company
• Free Zone Company
• Dual License Branch Office
• Trade Representative Office
• Let us begin by defining them one by one. 

Limited Liability Company

The Limited Liability Company of LLC offers the shareholders benefits of limited liability. These corporate shareholders are liable only to the extent of their share capital contributions. To set up a Limited Liability Company, the applicant needs sponsorship from the following one or two to act as a National Sponsor:

• UAE Citizen
• Wholly-owned UAE Corporate

The UAE Authority puts no minimum capital requirement for LLC registration. However, the company must have atleast AED 100,000 per market standard. The UAE Authority does not mandate any ITR on its Corporates unless they are involved in traditional economic activities such as oil, natural gas, etc.

• The Authority mandates a physical office space before registration. He must also maintain a minimum of one Director/Manager.
• The Authority puts no constraints on the funds' repatriation, but the company must maintain a legal reserve of 10% of its profits. 

Branch Office

A branch office is just an extension of the parent company. It is not a separate legal entity. Any local/foreign company can set up its own branch office in both Mainland and Free Zones jurisdiction across Dubai state.

Joint Stock Company

A Joint Stock Company divides its capital into negotiable shares. Each share must be of equal worth. In a Joint Stock Company, a partner is liable only to the extent of its sharing capital contribution.

Types of JSCs

The Registrar defines two types of Joint Stock Companies in UAE:

• Private Joint Stock Company
• Public Joint Stock Company

Every JSC in Dubai must have a minimum of 2 and a maximum of 15 member directors. Each of these directors must be elected for three years. The majority of the Company's Board must be UAE nationals.

Public & Private JSCs

A public JSC must maintain a minimum share capital of 10,000,000 dirhams. It must also maintain a minimum of 10 founders for its incorporation. In contrast, the private JSC must maintain a minimum share capital of 2,000,000 dirhams. They must also maintain a minimum of three founders for the incorporation.

Free Zone Companies

The Free Zone companies are situated in Dubai's Free Zone. Special laws related to the designated Free Zone are as follows:

• Customs
• Taxation
• Ownership

These companies are distinct from that in mainland Dubai. Two kinds of companies can be established in Free Zones, such as:

• Free Zone Company
• Free Zone Establishment

Free Zone Company

A Free Zone Company has multiple shareholders with a limit of five. Both natural persons can incorporate as a Free Zone company. The respective Free Zone Authority frames the legal requirements required for LLC incorporation.

Free Zone Establishment

Every Free Zone Establishment must have a single shareholder, each with limited liability. Both natural as well as legal entities can incorporate themselves into a Free Zone Establishment. The regulations framed by the respective Free Zone Authority are the legal requirements for such Establishment's incorporation.

Dual License Branch Office

A Branch Office with Dual License is an extension of a Free Zone Company in Dubai. It is situated in Dubai's mainland area. These Branch offices also hold an additional license along with the Free Zone Incorporation license.

A Dual Branching License reduces the cost as well as the duration of incorporating a company in the Gulf City's Mainland Area. This office is not a subsidiary. It is a Branch Office of a Free Zone company, without appointing a Local Sponsor. Such Branch Offices cannot register with the Ministry of Labour in UAE and are not eligible to issue labour permits, with staff as free zone resident holders.

Trade Representative Office

A Representative Office is an extension of its Parent Company. It must not be considered an independent entity. A TRO is permitted for limited functions. It can collect information for projects by its parent company. It can also act as Marketing or Administrative Center in Dubai.

Establishing a Trade Office in Dubai requires the appointment of any one of the following entities:

• UAE National
• Completely-owned UAE Company
• Trade Office who cannot purchase property in UAE under their name

Every TRO applicant must deposit a Non-Refundable Deposit of 50,000 dirhams as working capital.

To know more about the eligibility requirements for Business Setup in Dubai, connect with the Incorporation Experts at Registrationwala. 

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