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Dubai Onshore
Limited Liability Company (Mainland / DED License)
Dubai is one of the seven Emirates that makes up the United Arab Emirates (UAE) and is the most heavily
populated city in the Country. The other six Emirates are Abu Dhabi (The Capital), Sharjah, Ras Al Khaimah,
Umm Al Quwain, Fujairah and Ajman. Each of the seven Emirates is ruled by a hereditary Emir but the
country has one National President.
Almost 90% of people living in Dubai are expatriates that have relocated here to advance their career and
standard of living.
The oil reserves of the UAE are the 6th largest in the world however oil is not the only reason that companies
relocate here. Dubai is the premier business and transport hub for the Middle East and South Asia with
one third of the world’s population within a 4 hour flight. It is also regarded as one the safest cities in
the world and is therefore a logical choice for businesses looking to expand in the region. The eyes of the
world have been on Dubai for the last 20 years as it has been growing and developing at an exponential
rate. The city will remain in focus as it now prepares to expand its infrastructure further to host the world
exposition in 2020, commonly referred to as ‘Expo 2020’. This event looks set to grow the economy of the
UAE significantly.
The city is already home to some of the world’s largest companies such as Microsoft, Facebook, Linkedin,
Sony, Mitsubishi, Mastercard to name a few
The Currency of Dubai is the Arab Emirate Dirham or Dirham for short. The dirham is indefinitely pegged
against the US Dollar (USA) at an exchange rate of 3.67 Dirhams to the Dollar.
Limited Liability Company (LLC)
This is the most common form of company found in the UAE. Any LLC which wishes to do business locally
must be majority owned by an UAE national (natural person acting as a sponsor). However a much better
arrangement is for Sovereign Corporate Services to hold the 51% of the shares (company acting as a
sponsor) but pass the control and all financial benefits of the business back to the foreign party in return
for an annual sponsorship fee.
Sovereign adds a layer of protection as we are long established and will be trusted and well known to our
clients. Additionally there can be succession planning issues, where a relatively unknown local individual
is the shareholder, which are absent under a corporate ownership arrangement- an individual cannot live
forever but a corporation can. The client will have no need to have any involvement with local individual
sponsors which means they will be free to run their business as they wish with minimum interference from
their sponsor.
The main benefit of having a business located in mainland Dubai is that, unlike in the Free zones, there are
no territorial restrictions on the business activity or on the location of the office premises. The company will
be able to trade anywhere in Dubai, including all free zones, and will have a far wider range of real estate
options to choose from. There is also no need for an LLC to pay the standard 5% customs duty on imported
goods.

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Taxation
There are no corporate or personal income taxes in the UAE. The UAE has an extensive and growing list
of double tax treaties with other countries. Under these treaties, profits derived from shares, dividends,
interest, royalties and fees are normally taxable only in the contracting state where the income is earned.
For example, dividend income paid by an UAE company to a resident of a country which has a double
taxation treaty with the UAE is normally not taxable.
Shareholders
An LLC must have 2-50 shareholders each of whom is liable for his or her share in the capital of the company
until paid up in full.
The minimum paid up share capital imposed by the Department of Economic Development has been waived.
Only one shareholder is required where the person is a GCC national.
Managers
A minimum of one Manager of the company must be resident in the UAE. Corporate managers are not
allowed. Sovereign can provide an individual manager for an annual fee that will depend on the size and
nature of the activities to be conducted.
Companies Law in the UAE does not recognize Directors or a Board of Directors. UAE companies must
appoint Company Managers or a Board of Managers. These are essentially the same as directors.
Visas
Once the entity has been incorporated and the trade license issued, all staff members are eligible for a 2
year renewable UAE residence permit.
All UAE Visa holders need only visit the UAE once every six months to ensure its validity. Once a visa has
been issued to a manager or an employee of a company, that person can then “sponsor” their immediate
family. Ordinarily those visas would be successfully issued.
Please note that only once the company has been incorporated and the license issued, can the visa be
applied for. To get the residency stamped in his/her passport, the client must travel to the UAE, take a
medical test and stay in the country for a minimum of two weeks. Sovereign can assist clients with the
application for all types of visa.
Office Space
It is a requirement for all LLCs to have their own rented or owned office space. The size of the required
office must be sufficient for the stated number of employees. Sovereign can assist the client with locating
suitable space. There are many serviced offices available in Dubai which can suffice for these purposes.
Reporting and Accounting
Annual accounts must be prepared and kept at the Registered Office and be available for inspection. No
public filing of accounts is required. We have an internal accounting department based in Dubai, which can
assist with bookkeeping, payroll, preparation of financial statements and auditing.

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DISCLAIMER © The Sovereign Group 2015
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute
legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.
Bank Account
There is no paid up share capital requirement so the bank account can be opened after the license has been
issued. We can assist with this for a fee of from US$1,500. If a Sovereign director is to act as the Manager
of the company they will also need to be the signatory on the bank account and will only provide limited
powers to others.
Fee Schedule
The amount of fees depends upon a number of different factors such as; the activities of the company,
the number of employees, the perceived risk to Sovereign, the number of ministerial approvals required
at a local level and the amount of input that the client expects from Sovereign going forward. So it is not
possible to accurately state fees in this presentation but a detailed quotation will be given prior to work
commencing.
There are five cost elements when establishing an LLC;
Government Fee – This is a mandatory cost to the Dubai Government for the issue of the Trade License. The
Cost will vary depending on the lease value of the office premises. Sovereign will provide a receipt for this
from the Dubai Government.
Service Fee – This is the fee Sovereign receives for establishing the company from initial consultation to the
issue of the trade license. The client will also have access to ongoing support to government liaison services
and to Sovereign’s multilingual operations team.
Document Fee – This covers the drafting of all legal documents necessary to incorporate and manage the
company.
PRO/Disbursement fee - This is a one off cost in year one and includes all sundry expenses associated with
the formation such as translation and typing of local documents. All unused disbursements will be returned
to the client upon issuance of the trade license and receipts will be provided.
Corporate sponsor fee – This is an annual fee which is paid to Sovereign where we are acting as the
nominee shareholder.
Holding Entity
Sovereign strongly recommends that all onshore structures are supported by a common law offshore
holding entity in order to store all intellectual property, assets and capital. Sovereign are able to set up the
holding entity at preferential rates for clients who are establishing a presence in Dubai.