UAE has emerged as one of the widely sought business destinations for investors, considering the pool of benefits it offers. It is also evident from the increasing strength of expats in the country with each passing year. However, before starting your business, it is very important to determine the form of business, mode of operation, and revenue generation. Normally, all the major business entities work through the module of “company”. In this article, we will explore what are the legal requirements of setting up a company in the UAE mainland with the help of the best company lawyers at a minimal cost.
For achieving a strong presence in the local market of UAE, having a company on the mainland is a big plus for you. All the entities that work in the UAE mainland must obtain a license from the Department of Economic Development (DED). Among companies, there are various choices also such as Limited liability companies (LLC), Civil companies, Joint Stock Companies, etc.
The steps involved in the formation are as follows-
Just like a person is known and recognized by its name, similarly a company is also named to distinguish it from other business entities. An interested person needs to register the name of the company with the Economic Department of the respective Emirates.
However, it is important to note that there are certain restrictions when choosing the name. The name shouldn’t be offensive; the words referring to Allah, religious groups, political groups, etc should be strictly avoided. If you want to name your company after a person, it must be the partner or director of the company with their full name. Further, the name shouldn’t be identical or in resemblance with any existing company.
While making an application for registering the trade name, you will be issued a transaction number, which can be used to track the status of your application.
The term initial approval means to take the nod of the government that it doesn’t have any problem or issue with the establishment of the company in the mainland. The investor can proceed with the next step only after getting the initial approval.
For a foreign investor, it is essential to obtain the approval of the General Directorate of Residency and Foreigners’ Affairs before getting the initial approval. If you want to do business in certain other activities, such as legal affairs, security affairs, financial securities, etc, you shall be required to have additional approvals.
The MOA is the constitution of the company containing all the essential information about its objective, functioning, share capital, etc. For setting up a company on the mainland, it is one of the major requirements. It is strongly advisable to choose the best legal attorneys specialized in Company Law to draft the MOA properly.
The foreigners who intend to work in the mainland also need to have a local service agent. The Federal Law No. 2 of 2015 (UAE Company Law) provides that a UAE national must have a 51% stake in a company if the company is set up outside the DIFC. While drafting the agreement, it is essential to comply with all the applicable legal requirements. The agreement must be attested through a notarized public or the court.
The Economic department is responsible for issuing the business license. To get a license, the following documents should be submitted before the department-
You need to make a payment within 30 days of receiving the payment voucher to get the license. In case of failure, your application may be canceled.
For setting up a company in the UAE mainland, it is essential to comply with all the above-mentioned steps and get the necessary approvals. The registrar of companies (ROC) acts as a unified authority to handle all the matters related to the company formation.
Recently, 100% foreign ownership has been allowed even for mainland companies for some specific sectors. It is a progressive step to attract more investors across the globe. If you want to obtain further details, contact the best legal attorneys, who have years of experience and specialization in company formation.
