LLC FORMATION

This type of company allows for a joint venture between UAE national (local) and foreign (expatriate) partners. Foreign partners are permitted to hold shares not exceeding 49% of the capital, with the national partner holding the remaining 51%. This is the most common type of entity for retail business in UAE.  In an effort to encourage new business, the UAE law was amended in August 2009 to exempt new companies from the previous “minimum share capital requirement” of AED 300,000 (US$ 81,750). There may be a requirement to have some level of share capital paid up to a local bank, depending on the type of business being set up. This is decided by the Economic Department on a case by case basis, and normally will only apply to those in financial services or insurance. It is standard to have an annual fee payable for the services of the “local partner”.  The shares of such companies are not open for subscription by the public. Despite the split in shareholdings, it is common for the local partner not to be involved in the day to day running of the company.  The expatriate partner may undertake management of the company.  A further detailed information sheet complete with set up fees and guidelines can be emailed upon request.