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Incorporation of Companies

Limited Liability Company

The history of forming the United Arab Emirates started back in 1968 when Britain decided to leave the Persian Gulf. In the year 1971, Dubai and Abu-Dhabi, in conjunction with five other emirates Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain, Fujairah formed the United Arab Emirates. Abu Dhabi and Dubai are the only emirates who have veto power over matters of national importance, whereas the other emirates only have a vote on such matters. In addition to this, Dubai is represented by eight members on the Federal National Council, of whom there are forty in total.

Dubai is said to be the fastest developing business hub on the planet with the great future prospects today. A free economy which is always open to foreign business and investment, it is only right to term Dubai as a business heaven, that has attracted many businesses and leading brands who have opened their offices in Dubai. An exceptional approach, prime locations, large coastline and the global aviation hub together eases the transportation and connection of people from all around the globe to come together in one place. With the rising speed of growth, Dubai has gained a world-class image as a leading luxury destination. Setting up the business in Dubai provides great infrastructure and because Dubai is strategically developed between east and west economies, it has the ability to co-exist which helps Dubai in connecting and expanding business internationally.

Limited Liability Company (LLC) is the most common form of business in UAE. A Limited Liability Company is generally formed by a minimum of 2 and a maximum of 50 shareholders whose liability is limited to their shares in the business capital. The shareholding patterns for an LLC is that the foreign partner/s gets 49% in total whereas the UAE National partner will hold 51% alone. As it was mandatory to have a UAE national as a partner in the LLC (51% shareholding) , investor had the option to choose the one UAE national (sponsor) as a partner in the company. However, With the recent reform of the Foreign Direct Investment Law, UAE now allows foreign investors 100 per cent ownership of businesses effective from December 1, 2020 and accordingly several categories of business licenses will no more require UAE National as sponsors with 51 per cent shareholding rights.


Types of Licenses

1.Commercial License

Commercial License or Trade license is issued to a natural or juridical person for start-ups in Dubai to carry out any trading activity, buying and selling. Further a Trading License can be for a specific trade or a General Trading. A specific trading license limits the scope of activities to trade in only specific or the related items whereas a General Trading License has no limitations.

2. Industrial License

An industrial license is for the manufacturing and processing of raw materials into a finished product or to transform the semi-manufactured products into fully manufactured products by using mechanical power to assemble or packing them.

3. Professional License

A professional license is issued to a natural or juridical person holding the related professional degree or certifications for a recognized university or professional body. This license is issued for start-ups in Dubai to practice certain professions such as Management Consultancy, Tax Consultancy, Accounting and Auditing, Technical Services, IT services, other consultancy services such as business set up, company formation, medical and educational services etc.

4. Tourism License

Dubai has always been a tourist attraction for last few decades. Millions of people from across globe travel to the city every year. The City has gathered momentum and transformed is position as the world’s most prolific travel, business and investment destination with its distinctive global personality and multi-cultural society. Tourism has been a foundation pillar for Dubai’s diversified economic agenda over several decades. With the of aim to promote and regulate the tourism industries in UAE – the Department of economic department and the Dubai Department of Tourism and Commerce Marketing (DTCM) initiated tourism license in the UAE. Tourism License is been issued to travel agents, tour operators, hospitality industry.

Some of the business activities require approvals from the government bodies other than Department of Economic Development.

The major licensing Authorities includes: Department of Economic Development in Dubai, Sharjah and Abu Dhabi and Municipality/ Chamber of Commerce in other emirates


All mainland (onshore) UAE legal entities need to be licensed by the Department of Economic Development (DED) and governed by the UAE Commercial Companies Law (CCL). A Limited Liability Company set up on UAE mainland has freedom to trade anywhere in the UAE including all free zones, and even wider GCC nations or internationally. Free Zones, on the other hand, has territorial restriction on business activities and also the location of offices/premises.

The principle limitation for foreign investors setting up an LLC is the UAE foreign ownership restrictions. When setting up an LLC, the CCL prescribes that at least 51% of shares must be registered to a UAE/GCC national sponsor (either a UAE/GCC national individual or a corporate entity 100% owned by UAE/GCC nationals), often referred to as a local partner. If your business requires you to trade on the UAE mainland with local companies then you will need a DED-licensed company and this will require a local partner. Many foreign investors are concerned by the foreign ownership restrictions and uncomfortable about relinquishing control of their company to a local partner. To allay these concerns, Sovereign has created a “corporate shareholder” model that allows clients to effectively maintain 100% ownership control of their business while remaining in full compliance with UAE companies law.

  • • In an LLC, The Foreign ownership is 49% while the remaining 51% shares is held by UAE/GCC national. With the recent reform of the FDI law in UAE, certain category of licenses no longer requires UAE National as partner.

  • • No specific minimum capital requirements

  • • The most popular choice among investors while establishing a commercial company in UAE

  • • The investor becomes the partner in the company

  • • The investor is a partner of the company and obtains an investor visa to sponsor his/her family

  • • The investor can set up a new branch in the UAE

  • • The UAE Citizen as a partner, do not interfere in the day to day management of the business

  • • The assets and capital created remains with the company and not the local national partner

  • • Few activities are restricted

  • • A local/global bank accounts is set up and operated by expatriate partner & avail credit facilities

Our Services

  • • Obtaining all the necessary approvals from the government.

  • • MOA (Memorandum of Association) or Partners Agreement duly notarized by Dubai Courts

  • • Any other agreements or documents required

  • • Assist to bring on board, the UAE National as Partner and/or to contribute equity

  • • Arrangement with the banks to set up the Bank Accounts

  • • Assisting to identify the best available Office Space

  • • Other PRO services as required.