License Types

A Sole Proprietorship is a business owned by an individual, not a company. This person will own 100% of the business, control all of its operations and keep 100% of any profits. He or she will also be 100% responsible for business debts and any other financial obligations.

Activities:

• An industrial or commercial type Sole Proprietorship can be owned only by UAE Nationals or GCC Nationals.
• The owner of a sole proprietorship engaged in consultancy activities must have obtained a scientific qualification for the same activity selected
• Certain activities that go with this legal form can be practiced only by UAE nationals.

Owner(s):

• A professional-type sole proprietorship can be owned by an individual of any nationality. If the owner is a National of a country other than the UAE or GCC, they require a Local Service Agent (LSA).A corporate body cannot own a sole proprietorship.

Manager(s):

• Sole Proprietorship can appoint one manager only as per DED business regulations.

Capital:

• A business capital is not required for a sole proprietorship.

Trade Name:

• The trade name should be related to the commercial activity of the firm.

Branch(es):

• A sole proprietorship can have more than one branch. Each may undertake one or all of the activities included in the main business license.
• A sole proprietorship cannot have a branch outside Dubai.

Assignment of License:

• A sole proprietorship and/or its branches can be sold and waived to any party or company. The owner/s can also change its legal form according to DED procedures.
• An industrial or commercial type sole proprietorship can be sold to a UAE national only. In case a local owner/partner changed the activity to professional, a sole proprietorship can be sold to a foreigner but a Local Service Agent must be assigned.

The one person limited liability company is owned by one natural or one corporate body. This company is different than the other forms that require having two parties at least to sign a contract.
The one person company consists of one person only. It is similar to the sole-proprietorship but they differ in some provisions, the most important of which is that its liability is limited to the single partner’s share whereas in the sole-proprietorship the liability is unlimited.

Activities:

• The activities are according to the procedures.

Owner(s):

• A local/GCC person or corporate body can establish and own a one person company (LLC).
• A natural person (UAE national, or a decree holder as per the procedures, or GCC national).
• A corporate body (UAE or GCC establishment and 100 % owned by UAE or GCC nationals).
• The license owner is called a shareholder.

Manager(s):

• At least one and up to 11 managers should be appointed in the license.
• The manager can be of any nationality (according to the procedures).
• The license owner and the manager can be the same person.
• The number of the company’s managers shouldn’t exceed 11 managers.
• The company should notify the concerned authority about the end of service of the manager within duration of 30 days starting from the end of service date. The company should appoint a new manager during this period.

Capital:

• The capital of the company is determined in the memorandum of association only.

Trade Name:

• • The trade name can be determined in two ways: Shareholder’s name + the activity + the legal form+ LLC
    Example: Mohammad Ahmad general trading one person co L.L.C OR
  • The trade name + shareholder’s name + the activity + the legal form+ LLC
    Example: Golden sun owned by Mohammad Ahmad general trading one person co L.L.C

Remarks:

• The trade name should be identical to its owner’s name followed by one person and ending with LLC.
• The trade name should follow its legal form.
• The name of the shareholder in the trade name can consist of two names at least for instance the first name + the second name or the nickname (consists of more than one name).
• If the trade name doesn’t start with the shareholder’s name then the phrase “owned by” should be mentioned.
• The legal form should be fully mentioned “one person co.”

Memorandum of association:

• A memorandum of association for the company shall be issued and authenticated by the notary public.

Dissolving, liquidating, and stopping the activity of the company:

• The company is dissolved by the death of the natural person owner or by the dissolution of the founding corporate body. However, the company shall not end with the death of the natural person if the inheritors want it to continue. Its status shall be adapted according to the provisions of this law and someone shall be appointed to manage the company on their behalf within duration of six months starting from the death date.
• If the owner of the one person company dissolves it with bad intentions or stops its activity before the end of its term or before achieving the purpose stated in its memorandum of association, he is personally held liable for its commitments.

A Civil Company is a business partnership for professionals in recognised fields such as doctors, lawyers, engineers and accountants.

Activities:

• Partners of any nationality can practice professional activities in accordance with DED business regulations.

Owner(s):

• A Civil Company can be owned by professional partners of any nationality. If the owner is a National of a country other than the UAE or GCC, they require a Local Service Agent (LSA).
• A foreign company can be a partner in a Civil Company, as long as the foreign company is in the same profession as the civil company.
• A civil company for engineering must have one partner who is a UAE National, who owns no less than 51% of the business and must be an engineer of the same type as the business’s activity.
• A civil company can practice consultancy activities but must be 100% owned by professional partners of the same type as the business’s activity.

Manager(s):

• A civil company can appoint one manager only as per DED business regulations.

Capital:

• The capital shouldn’t be specified but mentioned in the Memorandum of Association.

Trade Name:

• The trade name should be consistent and in proportion with the commercial activity of the firm.

Branch(es):

• A civil company can have more than one branch. Each may undertake one or all of the activities included in the main business license.

Assignment of License:

• A civil company and/or its branches can be sold and waived to any party or company. The owner(s) can also change its legal form according to DED procedures.

A Limited Liability Company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC must have between 2-50 shareholders, each of whom is liable only to the extent of his or her share in the capital of the company. With the exception of public shareholding company, an LLC can be changed to any other legal form.

Activities:

• LLCs can practice any industrial, commercial, professional or tourism activity. Some professional activities are excluded as per DED’s business regulations​ and other require approvals of authorities that regulate these activities.

Owner(s):

• At least 51% of LLCs must be owned by UAE Nationals, and can be owed by GCC nationals by up to 100%. In this case, the capital can be distributed in a different ratio as per the Memorandum of Association.
• A foreign company can be a partner in a Civil Company, as long as the foreign company is in the same profession as the civil company.
• An LLC can be owned by partners of any nationality in accordance with DED business regulations. A corporate body can buy shares of an LLC.

Check this table for more details about LLC ownership rules and requirements according to owners’ nationalities:
Manager(s):

• LLCs must appoint between 1-11 managers for the business. The managers may be selected from the partners. Unless the Memorandum of Association states otherwise, the manager has full powers of administration. Within the scope of his or her powers, the manager’s actions and commitments are binding to the business.
• The company must send a notice of termination to the concerned authority within a maximum period of 30 days from the date of the termination and appoint another manager during that period.
• LLCs must appoint a UAE-accredited auditor.
• The auditor must notify DED in case of resignation. The General Assembly must also notify DED in case the auditor was dismissed.

Capital:

• The capital shouldn’t be specified but mentioned in the Memorandum of Association.
• Shares of an LLC cannot be offered to the public. The company may not resort to public subscription to establish or increase its capital or secure loans, and it may not issue any negotiable stocks or shares.

Trade Name:

• A limited liability company shall have a name derived from its activity or from the name of one or more partners.
• The term “with limited liability” shall be annexed to the company’s name.

Branch(es):

• An LLC can have more than one branch. Each may undertake one or all of the activities included in the main business license.li>

Assignment of License:

• The limited liability company branches can be sold and waived to any party or company. The owner can also change its legal form according to DED procedures.

A Private Shareholding Company (Private Joint-Stock Company) is a partnership of 2-200 individuals. The partners must invest a minimum capital of AED 5,000,000 in the business.

Activities:

• A Private Joint-Stock Company can be created for any commercial or industrial type of business. Professional activities are not allowed under this legal form.
• An approval from Ministry of Economy must be obtained to establish a private shareholding company.

Owner(s):

• A private shareholding company can be owned by partners of any nationality in accordance with DED business regulations. A corporate body can establish and own a private shareholding company and the term “private shareholding company” shall be annexed to the company’s name.
• At least 51% of a Private Shareholding Company (Private Joint-Stock Company) must be owned by UAE Nationals, and can be owed by GCC nationals by up to 100%.

Manager(s):

• The company must have an appointed manager as per DED business regulations.

Capital:

• Minimum capital of AED 5,000,000.
• While the shares of a Private Shareholding Company (Private Joint-Stock Company) cannot be offered to the public, the business can be converted to a public company two years or more after its creation, given certain conditions:

-The nominal value of the issued shares is fully paid up
-A period of not less than two financial years has expired
-During the two years preceding the application for conversion, the company achieved net profits distributable to the shareholders, the average value of which is not less than 10% of the capital
-A resolution of the extraordinary assembly for the conversion of the company is adopted by a majority of shareholders representing at least three quarters of the company’s capital

Trade Name:

• • The trade name should be consistent and in proportion with the commercial activity of the firm. The firm name should be identical to the trade name. Both names must include one or more of the partners’ names and followed by the phrase “Private Shareholding Company”.

Branch(es):

• • • The company can have more than one branch. Each may undertake one or all of the activities included in the main business license…li>

Assignment of License:

• • Private shareholding company branches can be sold and waived to any party or company. The owner(s) can also change its legal form according to DED procedures.

A Public Share Holding Company is a company whose capital is divided into transferable shares of equal value.

Activities:

• Partners can practice any industrial, commercial or professional business activities in accordance with DED business regulations.

Owner(s):

• A public shareholding company can be owned by partners of any nationality in accordance with DED business regulations. A corporate body can own shares in a public shareholding company.
• A Public Share Holding Company must have at least 5 founding members who are UAE Nationals, owning between 30% and 70% of the capital shares.

Manager(s):

• The company must have maximum 5 appointed managers as per DED business regulations.

Capital:

• Minimum capital of AED 30,000,000.

Trade Name:

• • The business name cannot include the name of any of the shareholders, with the exception of patents registered in the name of a shareholder or if the business uses a store that has the name of a shareholder. The phrase “Public Shareholding Company” must be included in the business name.

Branch(es):

• • • The company can have more than one branch. Each may undertake one or all of the activities included in the main business license.
    •  

Assignment of License:

• • Public Shareholding Company branches can be sold and waived to any party or company. The owner(s) can also change its legal form according to DED procedures

A Simple Limited Partnership is formed between a minimum of two partners – one general partner and one limited partner. The general partners are liable for the company’s liabilities to the extent of all their personal and business assets; the limited partners are liable for a share of company liabilities equal to their share of the company capital.

Activities:

• The company can conduct commercial and industrial activities only.

Owner(s):

• A Simple Limited Partnership must have UAE Nationals as general partners; Nationals of other countries can be limited partners.
• Each general partner and limited partner can own any share of the business. There is no minimum or maximum ownership level for any partner.
• A limited partner may not intervene in management or administrative issues related to the other partners. If he or she does so, that limited partner shall be responsible for all the business’s obligations.

Trade Name:

• • The name of the company should be that of one or more of the general partners, with an addition noting that this is a company name. The company can also have a special trade name. The name of any limited partner should not be mentioned in the name of the company.

Branch(es):

• • The company can have more than one branch. Each may undertake one or all of the activities included in the main business license.
  •  

A Partnership Company is a single business where two or more people share ownership. Each partner contributes to all aspects of the business and must administer the company unless a contract assigns administration to one partner or to another party.

Activities:

• The company can conduct commercial and industrial activities only.

Owner(s):

• A Simple Limited Partnership must have UAE Nationals as general partners; Nationals of other countries can be limited partners.
• Each general partner and limited partner can own any share of the business. There is no minimum or maximum ownership level for any partner.
• A limited partner may not intervene in management or administrative issues related to the other partners. If he or she does so, that limited partner shall be responsible for all the business’s obligations.

Trade Name:

• • The name of the business must contain the name of one or more of the partners, with the addition of a word signifying that it is the name of a business. If a non-partner is named in the business name, with his or her knowledge, that individual is jointly responsible for the business’s debts. The business can also have a commercial name.

Manager(s):

• • • A Partnership Company can appoint one manager only as per DED business regulations.

Branch(es):

• • A Partnership Company can have more than one branch. Each may undertake one or all of the activities included in the main business license.
  • Assignment of License:
  • Partnership Company branches can be sold and waived to any party or company. The owner(s) can also change its legal form according to DED procedures.

• A branch of a foreign company can practice professional activities and some commercial and industrial activities.
• An approval from the Ministry of Economy is required for practicing commercial and industrial activities.

• A Branch of a Foreign Company is 100% owned by the parent company, operate under the same name and conduct the same business as the managing firm,in order to open a branch in Dubai.
• A Branch of Foreign Company also requires a Local Service Agent (LSA), who can be a UAE National or a company owned by one or more UAE Nationals.

• A branch of a foreign company must have a manager to represent the company and to open the branch, appointed by the Board of Directors.

A Representative Office for Commercial Activities is not a business structure in its own right but it is a business activity that a branch can conduct. It has its own criteria, which includes the authorisation to promote and market the parent company’s business – but not conduct business operations. A Representative Office requires a Local Service Agent (LSA), who can be a UAE National or a company owned by one or more UAE Nationals.

The Agent’s responsibilities towards the company and third parties shall be limited to rendering necessary services to the company without his bearing any financial liabilities or obligations related to the company or its branches and offices inside and outside the State.

• A Branch of a Dubai-based Company must undertake one or all of the activities included in the main company license. For a company with multiple branches, each branch can undertake different activities as long as they were all included in the original license for the main company.
• An approval from the Ministry of Economy is required for practicing commercial and industrial activities.

• A branch of a Dubai-based company must be 100% owned by the parent company.

• A branch of a company should appoint a branch manager.

• Not required.

• Branches of LLCs, public shareholding companies and private shareholding companies:
• The trade name of a branch can be different from the trade name of the parent company provided that the trade name of the branch includes the phrase “a branch of the parent company name” and the legal form of the parent company (e.g.: a branch of Gulf Company for General Trading LLC).
• Branches of civil works, partnership and simple limited partnership companies: The trade name of the branch must be identical to the trade name of the parent company.

• Branches can be sold and waived to any party or company. The owner(s) can also change its legal form according to DED procedures.

• A Branch of a UAE-based Company must undertake one or all of the activities included in the main company license. For a company with multiple branches, each branch can undertake different activities, as long as they were all included in the original license for the main company

• A branch of a UAE-Based Company must be 100% owned by the parent company.

• The trade name of the branch must be identical to the trade name of the parent company. The trade name of the parent company must be changed in case the same name previously registered in Dubai.

• A Branch of a GCC-based Company must undertake one or all of the activities included in the main company license. For a company with multiple branches, each branch can undertake different activities, as long as they were all included in the original license for the main company.
• While other GCC countries may follow different rules in terms of combining activities, for Dubai branch licenses, only activities of the same group will be accepted, even if other activities are registered in the GCC main company

• A Branch of a GCC-based Company must be 100% owned by the parent company

• The trade name of the branch must be identical to the trade name of the parent company. The trade name of the parent company must be changed in case the same name previously registered in Dubai.

• A branch of a free zone company can carry out commercial, industrial and professional business as long as the activity of the main company is authorised in mainland Dubai. If you have a company whose main license was issued in a UAE free zone, (not as a branch of a foreign company), you can obtain a branch license from DED to expand your operations to mainland Dubai.

• For a branch of free zone company, if there is no local shareholder in the main company, or the local shareholder in the main company owns less than 51% of the shares, you will need an approval from Ministry of Economy and a Local service agent.
• Neither a local service agent nor an approval of the Ministry of Economy are required if the branch performs professional activities.
• Companies owned 100% by GCC nationals do not need a local service agent.