In compliance with Federal laws of the United Arab Emirates on the territory of the country it is permitted to incorporate companies having different legal status. The most popular among foreign investors in the UAE are the following types of companies:
- Companies on the main territory with limited liability
- Public limited companies
- Partnerships
- Companies operating in FTZs with different shareholder structures
Companies in the UAE registered outside FTZ.
Some organizational forms of establishments / companies operating outside the territory of the UAE Free Trade Zones are subject to restrictions relating to participation of foreign nationals in the share capital of the company. Let's try to analyze this issue in detail.
- For companies that fall under the category of professional activity, participation of local partners in the share capital of the company in the UAE is not required. Local national is required only in the capacity of a local agent that represents the company when getting in touch with governmental authorities.
- Companies that fall under the category of commercial activity are required to ensure the participation of a local national in the share capital of company. His percentage in share capital shall constitute at least 51%.
Companies with limited liability in the UAE operating on the main territory (outside FTZ) are subject to the following requirements relating to subscribers. Minimum number of shareholders of companies - 2, maximum number - 50.
Management of the company in the UAE is normally carried out by the sole director, and in cases when management is carried out by the Board of Directors, which may include individuals, the maximum number of members of the Board shall not exceed five. In addition, for particular types of activities, more than half of members of the Board shall consist of nationals of the UAE. The aforesaid provisions apply to companies which operate outside the FTZs. Companies operating in FTZs are subject to other regulations – please see respective info part.
Directors of the company in the UAE may be of any nationality and are not required to be shareholders of the company;
Public companies may be incorporated by at least 10 shareholders, and in cases where UAE government bodies have any interest in the company, the number of shareholders may be reduced. Such company is managed by the Board of Directors, which may include from three to fifteen individuals.
A partnership, operating in the UAE may be established by two or more partners. Management thereof is carried out by either appointed managers or partners themselves. General partners of the entity shall be nationals of the UAE.
Companies registered in FTZ of the UAE.
Today, on the territory of the United Arab Emirates there are more than thirty five Free Trade Zones (FTZs); such zones are regulated by the laws of the country and by their own administrations, which are authorized to alter and amend to some extend regulations and rules relating to companies, registered and operating in FTZ of the UAE.
Such administrative departments of Free Trade Zones of the Emirates carry out registration of companies in such FTZs, issue licenses for relevant business and resolve other issues related to administrative aspect of companies’ operation.
Unlike main territory of the United Arab Emirates, FTZs provide for companies with foreign participation a number of specific advantages, such as:
- 100% participation of foreign shareholders in the capital of the company;
- 1 - 5 shareholders may participate in establishment of the company;
- The number of directors may be altered subject to conditions and requirements of particular free trade zone.
- Full tax exemption.
Majority of foreign entities, choosing the UAE as a place for doing business, are registered in such FTZ. Companies in such FTZ of the UAE may have real offices, warehouses, industrial and other premises, hire staff in the UAE and carry out practically all types of commercial activities in the UAE
