The United Arab Emirates (UAE) offers a diverse and attractive environment for business Start-Ups. With its business-friendly climate, strategic location, and various legal forms, the UAE is an ideal destination for entrepreneurs worldwide. In this blog post, we explore the different legal forms and opportunities available to entrepreneurs in the UAE, as well as the differences between Free Trade Zones (Free Zones) and the Mainland.
Legal Forms in the UAE
Choosing the right legal form is crucial for the success of a business. The UAE offers several legal forms, each with specific advantages and requirements:
1. Limited Liability Company (LLC)
- Definition: An LLC is the most common business form for companies wishing to operate in the UAE. It is particularly suitable for small and medium-sized enterprises (SMEs).
- Ownership: Due to recent legislative changes, 100% foreign ownership is possible in most sectors.
- Liability: The liability of shareholders is limited to their contributions.
2. Branch of a Foreign Entity
- Definition: A foreign company can open a branch in the UAE to conduct business.
- Ownership: The foreign parent company retains full ownership in most cases (some sectors may require an Emirati sponsor).
- Usage: This form is ideal for companies wanting to establish their brand in the UAE without creating a separate legal entity.
3. Freelancer License
- Definition: Individuals can operate as freelancers.
- Ownership: Fully owned by the freelancer.
- Usage: Suitable for sole proprietors and professionals such as designers, journalists, or IT specialists.
4. Free Zone Entity
- Definition: Companies in Free Trade Zones enjoy numerous benefits, including customs and tax exemptions.
- Ownership: 100% foreign ownership is possible.
- Usage: Ideal for international businesses, import/export activities, and services.
5. Public Joint Stock Company (PJSC)
- Definition: A PJSC is suitable for larger companies and projects and allows for raising capital by issuing shares to the public.
- Ownership: Requires at least 10 founders and must meet strict capital requirements.
- Usage: Ideal for large-scale projects and publicly traded companies.
Conclusion
Regardless of the chosen legal form, it is advisable to seek tax and legal advice to ensure all legal requirements are met, and the business stands on a solid foundation. The UAE remains a dynamic and attractive location for entrepreneurs worldwide eager to succeed in a growing market.
