5 Reasons LLC Company Formation is The Best Onshore Option in The UAE MainlandAuthor businessconsultantsdubai
Formation of Limited Liability Company is one of the most popular and preferred forms of business setup in Dubai and across UAE. Dubai LLC Company offers not only an ideal strategic location to conduct your business but is a reliable business structure that gives you the opportunity to engage with other government organizations and private institutions.
For business setup in UAE, an entrepreneur comes across two options normally; either set up a free zone company or a mainland company. While Formation of free zone company offers numerous benefits to a foreign investor such as complete ownership, complete repatriation of profits, variety of business licenses, exemption from taxes and so on, Mainland companies on the other hand are opted by an investor to conduct his business onshore i.e. to trade directly with the local market of UAE, a feature that is not available to free zone companies.
LLC – Defined
Limited Liability Company is the most common form of onshore business in UAE. It is defined as an independent legal entity that is established with the help of a local sponsor. It is mandatory that local sponsor be a UAE national and will hold minimum of 51% of company shares. Rest of 49% shares will be owned by foreign investor.
There are various types of local sponsors in UAE. Usually, they do not get involved in company’s day to day decision making and you can also retain 100% of your company’s profits to yourself. Typically, local sponsors are paid an annual fee for their service.
If you are looking to setup your business in UAE, LLC Company is a straightforward and an affordable way to trade from and with mainland. Let’s explore the reasons as why LLC company formation is the best option for mainland business in UAE.
Business Setup in UAE- Why Choose LLC?
1. Limited Personal Liability
The major advantage of setting up LLC in UAE is the protection that an entrepreneur gets from the government in case of business failure.
Limited Liability Company in UAE is considered as separate legal entity. If due to unforeseen circumstances or by any reason the business gets into trouble, business owner or shareholder will not be held personally liable. Liability of the business owner is limited to the extent of his shares in the company; his personal assets will not be taken to pay off creditors.
2. Simple And Affordable Setup
Formation of an LLC is made quite easy by the government. You just need to register online with Department of Economic Development (DED) for issuance of your license. The process is so easy and quick that if you meet the required criteria, you can register within two hours, without having to commit to lease agreement.
Along with ease, onshore company is popular among new investors due to low cost of setting up. License cost is as minimal as under AED 20,000 which is comparable to popular Dubai free zone – (DMCC) Dubai Multi Commodities Center. Furthermore, there is no requirement for paid up front share capital.
3. Trade From Anywhere And Directly With Local Market
Limited Liability Company can establish and trade from anywhere in UAE Mainland. It is also permitted to trade directly with entire UAE market unlike Free Zone Company which has to hire a distribution agent if it wants to trade with local market.
Another opportunity for Mainland LLCs is that they are allowed to bid for government tenders. These lucrative projects run into billions of dollars each year.
4. Great Tax Incentives
One of the key features of mainland business in UAE is that LLCs are 100% tax-free. They are not required to pay tax on all profits.
5. Business Setup Benefits
- Trade in variety of business activities – DED has listed over 2,000 activities that you can undertake for your company.
- Open multiple branches – Setting up Limited Liability Company brings forth strong foothold and momentum in UAE as you can open additional branch offices throughout the Emirates so as to build a greater presence across the mainland.
- Multiple shareholders – LLCs can be formed with multiple shareholders between 2 to 50. Shareholders can be individuals, corporations or combination of both.
- Plenty of visa options – you can get multiple visas for your employees. There is no upper limit. However, obtaining visas is linked to the size of the premises. More office space, more number of visas you can obtain.
- Easy to sponsor dependents – forming an LLC renders your eligibility to obtain investor visa, you can easily sponsor your family. The process is straight forward and you can stay as resident in UAE for up to three years.
Setup LLC in Dubai with Business Consultants Dubai
Business setup in UAE is an important process which you must not do alone. Get an advice from an expert in order to attain full understanding of business culture and to ensure a smooth setup process for your company. Our company formation agents can assist you from scratch till end for establishment of LLC.
Contact our representatives here for further guidance.