Setting Up A Limited Liability Company (L.L.C.) in Abu Dhabi

[vc_row][vc_column][vc_column_text]There are six steps for starting a business in the Emirate of Abu Dhabi:

• Determining the New Activity.
• Determining the Legal Form.
• Registration of Trade Name.
• Issuance of an Initial Approval.
• Obtaining Approvals of Concerned Authorities.
• Issuance of License.

1. Determining the Economic Activity:

In order to start the procedures for issuing a business license, the type of activity/activities to be practised must be specified. Requirements, conditions and fees differ according to the type and nature of the activity, provided that some activities have special conditions and specifications related to the location (place and area), which means that they can only be practised in some locations with special conditions.

Inline with international intents to standardize economic activities, the Department of Economic Development in Abu Dhabi has adopted the “International Standard Industrial Classification” of all economic activities (ISIC4) issued by the United Nations, which has become an important tool in the comparison of statistical data on economic activities at the international level.

2. Determining the Legal Form:

There is a range of legal forms that commensurate with the needs of business activities in Abu Dhabi (such as an establishment, a limited liability company … etc.), where laws, requirements and conditions of the legal forms differ according to the nature of the business.

3. Registration of Trade Name:

After determining the activity and legal form, a trade name must be chosen for the facility to distinguish it from other facilities, and it must appropriately suit the nature of the activity and its legal form.

4. Issuance of an Initial Approval:

The Initial approval is a certificate which entitles the investor to proceed ahead with procedures for obtaining the business license and apply for obtaining required approvals of relevant authorities to practice economic activities.

The Initial approval is the stage, which precedes issuance of the business license, and it starts after approval of trade names. The initial approval does not allow the concerned person to practice the activity unless a commercial license is issued.

The Documents required to issue the initial approval

1. Obtaining the approved trade name.
2. Obtaining the approval of the Department of Naturalization and Residence for foreign investors.
3. Copies of valid passports.
4. Copies of valid Emirates ID.
5. Payment of prescribed fees
6. Collecting the Initial approval certificate.
7. Obtaining Approvals of Concerned Authorities:

Upon obtaining the Initial approval, you will be entitled to approach concerned authorities to get required approvals after fulfilment of terms and conditions. The issuing entity is determined depending on the type of activity to be practised. Some governmental entities offer electronic services that allow you to follow up the application online. You can follow up your application online with the following entities:

• Supreme Petroleum Council
• Department of Transport
• Abu Dhabi Municipality – Public Health Division – Al Ain
• General Authority of Youth & Sports Welfare
• Abu Dhabi Municipality – Public Health Division – Western Region
• Abu Dhabi Municipality – Public Health Division – Abu Dhabi
• Abu Dhabi Chamber
• Abu Dhabi Sewerage Service Company
• Waste Management Center
• General Directorate of Civil Defense
• Abu Dhabi Environment Health and Safety Center
• Abu Dhabi Center for Technical and Vocational Education and Training
• Ministry of Foreign Affairs

6. Issuance of Commercial License

The conditions and requirements for the issuance of commercial licenses depend on the legal form of the facility. Below are all the legal forms available.

• Establishment
• Company
• Branch
• Cooperative Societies

SETTING UP A LIMITED LIABILITY COMPANY (L.L.C.) IN ABU DHABI

Advantages

• Flexibility to do business in any part of the UAE with local and government authorities
• No limit on number of visas (depending on the size of the office space)
• Office premises anywhere in Abu Dhabi (excluding Free Zones)
• More options on business activities
• Fewer nationality restrictions in ownership and visas compared to other jurisdictions

Professional License

1. The establishment of entities formed under the UAE Civil Code which are restricted to carrying out “non-commercial” or civil activities. The UAE Civil Code entities (may be an Individual Establishment or a Civil Works Company) include promotion of services, skills, and expertise of the individual(s) conducting the business, as well as other related practices that involve the use or investment of intellectual faculties.
2. Professional companies may be 100% foreign owned. However, it is necessary to appoint a “Local Service Agent” or “Local Sponsor.”
3. To comply with the provisions of UAE law, we propose that one of the local partners of PRIME GLOBAL GROUP will act as the Local Service Agent. The nominated Local Service Agent will not have any management authority or financial commitment and he will only act on your behalf to facilitate the trade license and visa processes necessary to complete your trade license. The Local Service Agent Appointment Contract shall regulate the relationship between the two parties.
4. Depending on the business activity, this can be an LLC (Limited Liability Company) if 51% ownership is given to a UAE National or Company. For the latter and in certain business activities, the shareholders of the UAE Company must meet the same criteria as the expat partner/s.
5. Existing companies can only invest in a new Civil Company if they reflect the same business activity.

Commercial License

1. The establishment of a Limited Liability Company (LLC) in Abu Dhabi in accordance with the Commercial Companies Law. This is the most widely used commercial entity for companies with foreign ownership wishing to conduct commercial activities and trade in the UAE
2. Each of the partners shall only be liable to the extent of their share capital in the company upon incorporation as stated in the executed Memorandum of Agreement (MOA).
3. Under the UAE Companies Law, a minimum of 51% ownership must be held by a UAE National (Local Partner), and 49% ownership will be that of the foreign shareholder. However, the law permits the issuance of constitutional documents for an LLC to contain provisions designed to protect the interests of the foreign minority shareholder, including but not limited to the profits distribution, assets entitlement, appointment of directors/managers, powers of administration, and influence in decision making.
4. To comply with the provisions of the UAE Companies Law, we propose that PRIME GLOBAL GROUP LLC or a PRIME GLOBAL GROUP recommended UAE national act as your “Local Partner”.

Branch or Representative Office

1. It is stipulated under the UAE Companies Law that 100% foreign ownership is allowed provided that a local service agent is appointed.
2. A Branch office is a legal extension of the parent company and is permitted to secure contracts and conduct business activities, which are similar to those of its parent company subject to the approval of the UAE Ministry of Economy.
3. A Representative Office is established to promote the products and services of its parent company but may not carry out any trading activity or enter into commercial transactions and deals by itself. The number of employees allowed under this company is limited to 4.

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