| 1. |
Can a L.L.C. of another Emirate open branch in Dubai? |
Yes, but if the capital of the company is less than Dhs. 300,000/- then it should be raised to Dhs. 300,000/- by an amendment to the Memorandum of Association. The original and the amendment to the Memorandum of Association along with other documents have to be filed with the Department of Economic Development, Dubai.
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| 2. |
Can a partner transfer his shares to any other partner or person? |
Yes, the following documents are required to transfer shares by one partner to another partner/ person: Sale of shares agreement
- Amendment to Memorandum of Association
- Department of Economic Development will give advertisement in Arabic
- Newspaper for 15 days for no objection by any member of the public.
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| 3. |
Can a sole proprietorship/partnership company be converted into a L.L.C.? |
Minimum two and maximum fifty persons can form a limited liability company. However, U.A.E. National's share in the capital should be minimum 51%; at any given time share of the U.A.E. National partner should not fall below 51%. Partners may be natural persons or a corporate body/company. Each partner shall be responsible only to the extent of his share in the capital for the company’s liabilities. |
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| 4. |
Can the company open branches in Dubai? |
The company can open branches in Dubai by submitting an application along with the original trade licence and other documents |
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| 5. |
Can the company open branches in other Emirates? |
The company will have to incorporate a new company in other emirates with the required capital and with a new Memorandum of Association stating therein that this new company is a branch of the Dubai Company.
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| 6. |
Can the partners admit a new partner? |
Existing L.L.C. can admit new partner with full capital contribution in cash or kind. If the company opts for kind contribution the following documents are required:
- Sale of shares agreement.
- Audited financial statements
- Statement of capital contributed in kind by all the partners
- Resolution of the partners
- Amendment in the Memorandum of Association of the company
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| 7. |
How long is the process for the Incorporation for a Consultancy License (Time Frame)? |
Upon receiving the complete set of documents & tenancy contract for the office 5-7 working days to get the License. |
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| 8. |
How long is the process for the Incorporation for a LLC License (Time Frame)? |
Upon receiving the complete set of documents & tenancy contract for the office 10-12 working days to get the License ( Varies, based on the Business Activity) |
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| 9. |
How many persons can form a company and who can be the partners? |
The Law stipulates that companies engaging in banking, insurance, or financial activities should be run as public shareholding companies. Foreign banks, insurance and financial companies, however, can establish a presence in Dubai by opening a branch or representative office.
Shareholding companies are suitable primarily for large projects or operations, since the minimum capital required is Dh. 10 million (US$ 2.725 million) for a public company, and Dh. 2 million (US$ 0.545 million) for a private shareholding company. The chairman and a majority of directors must be UAE nationals and there is less flexibility of profit distribution than is permissible in the case of limited liability companies.
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| 10. |
If the other existing licenses of a local partner are expired will the Department of Economic Development accept the documents submitted to form the L.L.C.? |
The Economic Department will not allow a company to be incorporated if any licence issued in the name of the local partner has expired. Therefore before submitting the name and objects approval form to the Economic Department the investor has to ensure that all the licences issued in the name of the local partner are valid.
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| 11. |
Is residential address to be stated anywhere? |
The residential address of the expatriate partners has to be stated in the Memorandum of Association and supported by the tenancy contract copy as 5% tax has to be paid on the per annum rental value.
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| 12. |
What are the benefits of forming a limited liability company? |
- Liability of partners is limited to the extent of unpaid capital.
- Company attains a corporate entity different from its partners.
- The partners can appoint Director(s) who are authorised by the
- Memorandum to carry on the business of the L.L.C. independently without involvement of the U.A.E. national partner.
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| 13. |
What are the documents required for Group Visa? |
- Trade license copy
- Labor card copy
- Immigration card copy
- Group Visa request letter from the company in Arabic
- Project details of the company in Arabic and English (Attested from the Ministry of Labor)
- Letter from the Main Contractor or Consultant (For Construction companies)
- Passport copy of the PRO
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| 14. |
What are the main contents of the Memorandum of Association? |
The Memorandum of Association is a contract between the partners to form a L.L.C. and it contains the following information:
- Name of the company, its objectives and registered office address.
- Name of the partners, their nationalities, place of residence and residential addresses.
- Amount of the share capital, share of each partner and value of each share.
- Names of the partners and method of capital contribution by the partners.
- Names of the directors and their nationalities.
- Date of commencement and period of contract.
- Method of profits or losses distribution and share of the partners in the profits or losses.
- The procedure to be adopted for sending notices to the partners.
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| 15. |
What are the major costs payable to the economic /other government department for forming a limited liability company? |
- One time charges to Economic Department Dhs. 3,000/-.
- Part of license fees are based on -
- 5% of the tenancy contract value of expatriate Director's residence
(located in Dubai or any other Emirate) or AED 1000/- in absence of the Directors residence tenancy contract.
- Dhs. 750/- charged for Director being appointed for unlimited period.
- 10% of the tenancy contract value of office, go down, stores, shop rented by the company.
Note: Expatriate partner's residence is not considered for license fees if he is not a Director in the company. If all partners are U.A.E nationals, their residence, offices, shops, etc. are not considered for license fees.
- Notarization fees - 0.25% of capital OR a sum arrived at by multiplying the annual salary of each director with the number of years of his appointment as stated in the memorandum of association, which ever is higher; maximum Dhs. 10,000/- only. No further fees for alteration of capital is payable if initially Dhs. 10,000/- have been paid.
- Other miscellaneous fees and Chamber of Commerce fees.
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| 16. |
When can the company commence business activities? |
The partners can commence business on receipt of the Certificate of Commercial Registration, provided the partners have obtained a residence visa. The partners shall be jointly liable for all acts and transactions performed on behalf of the company prior to its registration.
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| 17. |
Which are the documents required to be submitted to the Department of Economic Development? |
A complete list of documents required to form a Limited Liability Company is enclosed herewith. |
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| 18. |
Which business activities can be undertaken by the company? |
The company may undertake any business activity permitted by the Department of Economic Development except business of banking, insurance and investment of funds for third parties.
By practice, the department does not permit, two different classified business activities under one license e.g. trading and manufacturing need separate licenses or two different designated classes of activities under one license, e.g. trading of electronics and Jewellery need separate trade licenses. |
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| 19. |
Who will manage the business of the company? |
The shareholders / partners may appoint themselves or other persons as Directors to run and manage the business of the company. Only the directors have the powers to run and manage the day to day operations of the company, the partners are not given any powers to run and manage the company.
Either there will be one Director or Board of Directors appointed to manage the company.
All Powers of Directors are generally stated in the Memorandum of Association including power to open and operate bank accounts and borrow money from banks.
Even a company can be appointed as a Director of the company. |
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