Company Formation

Selecting the right free zone

With numerous Free Zone Registries in the UAE, we highlight four registries on our site that typically cater to the requirements of the majority of our clients

Meydan Free Zone Registry (situated in Meydan, Dubai)

• IFZA Free Zone Registry (located in Dubai Silicon Oasis, Dubai)
• DWC Free Zone Registry (situated in Dubai South, Dubai)
• DMCC Free Zone Registry (positioned at Jumeirah Lakes Towers – JLT, Dubai)
• DIC Free Zone Registry (based in Dubai Internet City, Dubai)

Understanding various mainland company types

Foreign nationals have the option to establish two types of companies in the UAE:

1.Professional Company

• A Professional Company can exist as a Sole Establishment with a single partner or as a Civil Works Company with multiple partners.

2.Limited Liability Company (LLC)

• An LLC is another form of a company that can be established by foreign nationals.

Key differences between a Professional Company and an LLC

1. In a Professional Company, partners are personally liable without limit for the company’s debts. In an LLC, partners are only liable up to their capital contributions.

2. A Professional Company is restricted to service-based or consultancy activities and cannot engage in the sale of goods or manufacturing. There are no such restrictions for an LLC.

3. A Professional Company cannot be owned by a legal entity; its partners must be natural persons. Alternatively, a Branch of a foreign company or a UAE-registered company can be established if needed.

Choosing activities for your company

• Consulting/Services

1. For professional, service, and consulting activities, foreigners can now have 100% ownership.
2. A “local service agent” is required, who must be an Emirati and acts as a representative before the Registry. Their remuneration is fixed at AED 3,000 per year.
3. Partners in a Professional  Company have unlimited liability, making it crucial to consider potential consequences in local disputes. Establishing a Branch of a limited liability company in the Mainland can be a solution to avoid this issue.

• Sale of Goods/Import-Export

1.   Many trading activities no longer necessitate an Emirati sponsor. However, some activities may still require sponsorship.
2.   No requirement to appoint a local service agent.
3.   Partners’ liability is limited to their capital contributions.

Note: Upon special request to the Registry Director, it is possible to seek an “exemption” to register a consulting/service company as an LLC, allowing for limited liability, rather than as a sole establishment or civil company. Contact us for more information.

A foundation is an autonomous legal entity that maintains assets separately from the founder’s personal property.Diverging from the common law-rooted concept of a trust, the foundation originates from civil law jurisdictions.

Similar to a corporation, a foundation possesses its own legal personality. However, unlike a corporation, it does not issue shares or any other form of legal title, rendering it an “orphan” structure. A foundation is required to engage in one or more business activities, serving the benefit of one or more beneficiaries, whether explicitly named or not.

Governed by its charter and by-laws, reflective of the founder’s intentions, a foundation is administered by Council Members and may be overseen by a Guardian to ensure alignment with the founder’s wishes. The foundation’s assets are owned in its own name.

Foundations are commonly utilized for the following purposes

• Structuring assets, succession planning, and estate management.
• Safeguarding assets from forced inheritance laws, adversarial creditors, and takeover attempts.
• Establishing a long-term holding structure.
• Pursuing charitable and/or philanthropic objectives.