The landscape of business setup in Dubai underwent drastic changes when the government allowed 100% foreign ownership in mainland companies. From 1st June 2021, foreign investors were allowed to set up a Limited Liability Company (LLC) in Dubai with full ownership. As a result of the new change, many existing LLCs converted into single-owner companies retaining the limited liability benefit.
Not only the existing ones but new companies are also allowed to incorporate as a single owner LLC in Dubai mainland. You need to check the kind of activities and licenses that are eligible for 100% foreign ownership before starting the procedures. It is advisable to apply through business setup consultants in Dubai to remove any potential roadblocks. The following article deals with the requirements of setting up a single owner LLC in Dubai.
What is a Limited Liability Company with a Single Owner?
Before the new FDI law took effect, foreign investors were required to have a local sponsor to start an LLC in the UAE. As per the laws of business set up in the UAE, the Local Sponsor must be a UAE national. The previous commercial company’s law mandated that the Local Sponsor must hold at least 51% of the shares in the company and the foreign owner was entitled to only 49% of the shares in the company. Now, the UAE government has scrapped the requirement for appointing a Local Partner, which facilitated the emergence of mainland LLCs with a single shareholder or owner.
Types of Activities Eligible to Become Single Owners LLCs
As per the guidelines of the Department of Economic Development (DED), more than 1,000 commercial and industrial activities are eligible for 100% foreign ownership. Companies that conduct any of those activities can set up a single owner LLC in Dubai. However, economic activities with a strategic impact are excluded from the purview of the full foreign ownership reform. Existing companies with a local partner can convert into a single owner LLC by removing the UAE national sponsor.
Single owner LLC status was granted to commercial activities including general trade, contracting, jewellery, gold, pearls, luxury watches, foods, cars and trucks trading etc. Similarly, industrial activities such as metals and construction, flooring, building materials, foods, water production and paints sectors etc. were granted the single owner LLC status with full foreign ownership. Company formation consultants in Dubai can make the process easier for you.
Process of Converting into Single Owners LLCs
Companies with a Local UAE National Partner can convert into a Single Owner LLC without any hassle. The full ownership reform has not brought any changes to the existing rules and procedures of business setup in Dubai, except that it is no longer mandatory to have a UAE Local Sponsor. No additional fee, guarantees or capital is not required to convert into a one-person LCC with full foreign ownership. However, an LLC can’t change its legal structure to a Sole Proprietorship as the latter is a completely different legal form. Instead, the DED will transfer the existing license to a one-person company with limited liability.
Documents Required to Set up a Single Owner LLC
Investors should comply with the necessary documentation requirements while applying for an LLC license in Dubai. Inadequate documentation may delay the process of company formation in Dubai. However, business setup consultants in Dubai can advise on the type of documents you need to submit to open a single owner LLC. The following are the mandatory documents:
- Documents Required for Setting up a One Person LLC
- Attested copy of owner’s/shareholder’s passport
- Proof of residence
- Personal Profile of the owner/shareholder
- Name of the company that you are going to start
- Memorandum of Association (MoA) issued and authenticated by the notary public
- Details of the shareholders (if any)
Hire Experienced Business Setup Advisors in Dubai
Opting for a Single Owner LLC business setup in Dubai provides a lucrative opportunity for foreign investors as it not only gives full control over the business but also limits the owner’s liability to the company. The process of setting up a Person LLC in Dubai is nearly straight. Yet, having sufficient legal backup in the form of experienced business setup Consultants in Dubai such as Jitendra Business Consultants (JBC) saves the businessmen from unnecessary delays in obtaining the license. JBC offers the entrepreneurs efficient business set-up services in Dubai that cover documentation, getting approvals, bank account opening etc.
JBC has years of experience in setting up companies in Dubai as well as other emirates. Be it the mainland or free zone company formation in Dubai, JBC is one of the most trusted names in the industry. JBC incorporates companies quickly and cost-effectively which explains why both local and foreign businessmen put immense trust in the company’s services. JBC has a team of business setup consultants who with their impeccable legal know-how and experience dealing with the authorities simplify the process of business setup in Dubai.
