Frequently Asked Questions

Company Incorporation

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.

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.

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.

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

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.

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

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.

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)

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

Jebel Ali Free Zone

Can I be a partner in more than one company?

Yes. There are at present no restrictions on the number of businesses in which one person can be involved.

Can I bring my Family members?

Yes, subject to your eligibility as per the immigration rules.

Can I convert my Driving Licence?

Yes. The UAE recognises driving licences from certain countries. Yes. The UAE recognises driving licences from certain countries. A local UAE license can be issued upon the completion of required formalities.

Can I establish a branch of my own company?

Yes, many companies establish subsidiaries in the Free Zone.

Can I have a licence from Jafza but operate from Dubai or other Emirates?

The licence issued by Jafza is valid for operating your business only inside the free zone territory. You cannot use this licence to set up a business in any of the other Emirates. Goods maybe sold to other Emirates through distributors.

Can I import and export goods?

Yes, subject to your particular licence. Jafza companies operating in the Jebel Ali Free Zone are amongst the major re-exporters in the region. No duties imposed if goods are imported and exported within the Free Zone.

Can I manufacture products in the LIU’s (Light Industrial Units)?

Yes. Some of the variants of the LIU has a higher electrical capacity and can be used for assembly operations.

Can I transfer my money outside the country freely?

Yes. The authorities impose no restrictions on the movement of capital.

Can members of my family work?

Yes. Once they have residence visas, they may apply for work.

Can my staff live on my factory premises?

No. However, they can be put up in the Staff Accommodation in the Free Zone, or outside the Free Zone

Do I have to employ nationals in my business?

There is no compulsion to do so and you are free to hire staff from any country.

How do I bring in Business visitors?

Jafza operations department provides the service of issuing visit visas for business purposes.

How do licence holders clear goods for sale locally?

Licence holders can sell their goods to companies in the UAE (through an agent or distributor) and also in the FZ. In the former case the Ex-FZ import bill is cleared through customs in the name of the buyer. Please Note: Blank bills of entry may be purchased from Dubai Customs located at either Jebel Ali or Port Rashid Terminals. Dubai Ports Authority has a common documentary system. As a result, the documents may be processed at either location.

How long is my resident UAE visa valid?

The residence visa issued by Jafza is valid for a period of three years from the date of issue.

What documents do customs need to see?

  • Delivery Order – This will be issued by the shipping agent upon receipt of freight charges and either the original bill of lading or a bank guarantee.
  • Original Invoice – This should be produced by the original exporter and legalised by a recognised authority in the country of export. (This document is used by customs here for duty charges and statistical purposes.)
  • Certificate of Origin – Produced by the original exporter and legalised by a recognised authority in the country of export. This is used by customs to confirm the country of origin and its legitimacy.
  • Bill of Entry – Must be completed by the consignee or C&F agent. Free Zone (FZ) bills of entry are used for cargo declared for the zone. Cargo bound for Dubai is entered on a standard bill of entry.
  • Customs Duty Receipt – This is issued by customs if duty is payable. Certain importers are able to operate a credit facility with customs.
  • Duty Exemption Certificate – This is held either by companies importing cargo which do not attract duty, or by the agents acting on their behalf.

What is the minimum capital required for establishing a company in the Free Zone?

There is no minimum capital requirement asked for by Jafza if you are merely setting up a branch of your company. However, if you are establishing an FZE or FZCO, then the minimum capital requirement is Dhs. 1 million (US $270,000) or Dhs. 500,000 (US$135,000) respectively.

What type of business enterprises are allowed in the Free Zone?

All types of legitimate business operations are allowed in the zone under Industrial, trading and service sectors subject to Jebel Ali Free Zone Authority approval.

Who is authorised to clear cargo through customs at Jebel Ali and Port Rashid Terminals or Dubai International Airport?

  1. Consignees holding a UAE federal or Dubai Economic Department licence or any of the four Free Zone licenses.
  2. Agents holding a Dubai Economic Department Clearing and Forwarding (C&F) licence may also clear cargo on behalf of consignees.

Will the Government or the Free Zone Authority provide finance for projects in the Free Zone?

The Government or the Free Zone Authority does not provide project funding. However, the companies can approach other private financial bodies for financing their projects.

Will the Government protect my product by the imposition of protective duty?

No. The UAE has a free trade policy and no protective duties are imposed.

Dubai Offshore

Do I need a registered office and local agent?

Dubai offshore company must maintain a local Registered Agent approved by the local authorities and a local Registered Office, which is usually provided by the Registered Agent.

Is it necessary to have regular board and shareholder meetings?

Dubai offshore company meetings need not be held in Dubai.

Is it necessary to submit audit and financial returns?

No annual reports or accounts need to be filed. Accounts must be audited and accounts must be distributed to shareholders (but NOT filed with the authorities). Dubai offshore company may retain their accounting records wherever in the world the directors deem appropriate.

Is there a requirement regarding Directors of the company and the secretary?

A minimum of two directors and one secretary are required and they cannot be bodies corporate. One of the directors can also be a secretary. A register of directors must be held at the Registered Office, but it is not a matter of public record.

What are the minimum and maximum number of Shareholders a Dubai Offshore Company can have?

A Dubai offshore company can have minimum one and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. 100% foreign ownership of the company is allowed. There is no public register of shareholders and directors. Shareholders need to visit Jafza and sign the incorporation documents in the presence of the authorized official of Jafza. Alternatively a power of attorney, notarized and legalized by UAE Embassy, can be issued to a nominated person who can then sign before Jafza authorized official.

What are the provisions of the Federal Law regulations?

The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in the UAE. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. The seven categories of business organization defined by the Law are: General partnership company, Partnership-en-commendams, Joint Venture Company, Public Shareholding Company, Private shareholding company, Limited Liability Company, Share Partnership Company. By far the most usual form that businessmen and/or corporations prefer is the limited liability company.

What is the law that governs operations of foreign business?

Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 – the Commercial Companies Law – and its by-laws govern the operations of foreign business.

What is the minimum share capital required?

Dubai offshore company can select its own minimum capital. Usually we recommend share capital to be US Dollars 1,000. All shares must be fully paid when allotted. A company may not create different classes of shares. Bearer shares cannot be issued. Presently, joint shareholding is not allowed.

What is the taxation law?

Dubai offshore companies pay no taxes on profit, capital gains or anything else in Dubai.

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