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P.O. Box 23271, Dubai, UAE

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Business In Dubai

Company Formation

 Registration of Business

Each business entity, to establish itself in an Emirate, must obtain a trade licence (or in the case of professional firms, a professional licence). Each business entity is permitted only one form of business under an individual licence. The trade licence is a necessary prerequisite to apply for permission to employ staff and to various other administrative matters including registration of company vehicles.

In addition to the licence fees which are payable annually, certain fees are payable based on the rent paid for the office and any other accommodation rented for the firm's staff.

 

Establishing Branch Office of a foreign company

The Commercial Companies Law allows Foreign Companies (including those wholly owned by non-UAE nationals) to establish a branch office in the UAE. For this purpose the approval of the Ministry of Economy & Commerce (MEC) is required. The law does not expressly restrict the activities of a branch office of a foreign company. However, it is the current practice to grant such a branch office a licence which will entitle it to represent the foreign company but not to trade. Generally, such branch offices either act as regional administrative headquarters or provide support for its product in the local market. The branch is not allowed to import such products.

A foreign company which wishes to establish a branch in the UAE must be sponsored by a UAE national or by a locally registered company which is wholly owned by UAE nationals. A formally notarized sponsorship agreement is required. The foreign company must be in existence for a few years and is required to file audited accounts for the past two years.

A branch office registration can be a useful precursor to the establishment of a more substantial presence in the UAE or to the formation of other entities for particular projects

 

Company Formations

We advise and assist the client in selecting the location for their business, formation and documentation, identification of a national partner if required, assisting in licensing and complying with legal requirements, business set-up and relocation.

 

Sole Traders and Professional Licences

Sole Traders are not covered by the Companies Law and the existing rules applicable to their business establishment continue to apply. With the exception of the emirates of Abu Dhabi and Dubai, foreigners can establish and own proprietary businesses (employing less than five people) but a UAE national is required to be appointed as local service agent to complete the local formalities. As for professional practitioners (consulting engineers, architects, etc.) the current view is that these individuals are not within the Companies Law and the present practice of individual professional licences issued by the local Economic Department or Municipality continues. Banking, financial or investment consultancy companies need a minimum capital of AED 1 million. UAE nationals must own at least 51% of the capital in these companies and must constitute the majority of the board of directors, including the Chairman. Financial brokers involved in local shares and bonds need a minimum capital of AED 1 million. Those dealing in foreign stocks and bonds need to have a minimum capital of AED 2 million. Those dealing in commodities, currencies and cash market operation would need a minimum capital of AED 3 million. The share of UAE nationals must not be less than 60% of the capital.

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