Business Start Up
Doing business in UAE, the Philippines and UK.
Our company formation services extends from the preparation and filing of memorandum and articles of association, securing trade license and approvals from authorities to the drafting of protective agreements vis-à-vis foreign investment restrictions.
LIMITED LIABILITY COMPANIES (LLC)
Each emirate will have its own set of rules and regulations governing the affairs of a LLC. In Dubai, LLCs are governed by the Commercial Companies Law.
Profit distribution rules are subject to the requirements of each emirate. In Dubai, shareholders may agree that the local partner who owns 51% of the company shareholding will only be entitled to a minimum of 20.
As regards the minimum share capital of an LLC, the minimum in Dubai is AED300,000. The Dubai Department of Economic Development (DDED) which is the local licensing authority shall only issue the business license upon proof that all shares are paid up in full prior to incorporation.
An LLC may not commence business until it holds a certificate of commercial registration, issued by the federal UAE Ministry of Economy and Planning (MEP) and an appropriate business license, issued by the DDED.
Partnerships are the least popular form of business in the UAE. The three main forms of partnership are: general partnership, simple limited partnership and partnership limited with shares.
Only UAE nationals may be partners in a general partnership, while non-UAE nationals may only be silent partners having no managerial role in a simple general partnership. A partnership limited with shares must have at least one UAE national partner (who will assume full liability) and foreign partners with limited liability to the extent of their equity participation.
A foreign company may establish a branch office in the UAE as provided for by the Commercial Companies Law.
The branch is required to obtain the consent of the MEP before a local business license is issued. Membership in the local Chamber of Commerce and Industry are likewise required.
A UAE national or a locally registered company, which is wholly owned by UAE nationals must be appointed by the branch as its service agent. The service agent will sponsor and assist the foreign company, in return for a fee.
Another alternative is to license a representative office. The allowable activities for a representative office however are limited to representative, marketing and other promotional activities. A representative office cannot engage trading. A local services agent is likewise required.
Governed by the UAE Civil Code, professionals such as lawyers, doctors, accountants and other recognized professions can establish professional partnerships in the form of service companies wholly owned by foreign nationals. Similar to a foreign company branch office, a UAE national agent must be appointed by the service company. The grant of license for service companies is discretionary and is based on the full liability of the partners.
COMMERCIAL AGENCY/INFORMAL ESTABLISHMENTS
Depending on its business operations and strategy, a foreign entity may transact within the UAE without establishing a formal entity within the jurisdiction.
A commercial agency is advisable for entities intending to limit their activities to exporting goods or services to the UAE through a distributorship, agency or franchising agreement which must be entered with a UAE national.
This contractual relationship is governed by the Commercial Agencies Law. Registration of the agency agreement with the MEP may give rise to certain statutory obligations and therefore, utmost care and precaution must be exercised by the principal, specifically on the scope of agency and termination.