Legal Documents for Every Startup

Are you planning to start a business in Dubai? Whether it is a UAE mainland business or offshore company formation, you need to first prepare essential legal documents to lay a strong foundation for your business. Failure to do so may lead to big problems in the future. When you have the right legal requirements and documents, you can better protect your business interest and assets.

With this in mind, here are the following important legal documents you should have as you start your business in Dubai.

Trade licence

Trade licence is like a birth certificate, it certifies the birth of a new business. In the UAE, a trade licence is issued by the Department of Economic Development Authority (DEDA). If your business falls in certain categories, you would need further approval from the concerned ministries and relevant authorities.

For example, if you are putting up a banking and financial business, you need to seek the approval of the Central Bank of the UAE. If you are going to start a health-related business, you would need the approval of the Ministry of Health.

Bylaws

In a business setup, it is crucial to accurately define the specific ways how it should operate.

This is where bylaws come in. Bylaws establish the rules of the company such as how it should settle disputes, determine the powers of shareholders, select leaders, and even how the same bylaws can be amended in the future. When preparing the bylaws of your company, it is good to have corporate lawyers in Dubai who can give you legal advice.

In the UAE, particularly in Dubai, bylaws would include memorandum of association (MOA) for UAE mainland commercial companies (LLC), local service agent agreement (LSA) for individual professionals, and article of association (AOA) for free zone businesses.

[...continue reading]

Get a Trade License in Dubai

Now that you finally decided to start a business in Dubai, you would need to get a trade license first. Whether you want to start a UAE mainland business or offshore company formation, it pays a lot to know the whole process of obtaining a license. Thankfully, you will get to know how to obtain a trade license in Dubai through this post.

Three types of trade license

The type of license you will apply for would depend on the nature of your business. You would most likely need to apply for one of the following licenses:

• Commercial trade license – if your company is involved in any commercial trade activity, then this type of license is for you. General and specialized traders need to apply for commercial trade license.
• Industrial trade license – if your company is involved in converting raw materials to marketable products, then an industrial trade license is for you. Most businesses in the manufacturing and production sector should have this trade license.
• Professional trade license – if your company provides services and depends on the skills of professionals, then you need to apply for the professional trade license. Professional trade licenses may further be subdivided depending on the area of expertise and educational attainment of those who apply for this license.

To get the correct trade license, you can seek the help of business setup consultants in Dubai.

How to apply for a trade license outside of a free zone

Since there are different types of businesses, there are also different ways to apply for a trade license. However, the following are the basic steps that you should know about.

1. The Department of Economic Development or DED is the government agency that has been tasked to issue local Dubai company licenses. They have offices from several locations. If you want to obtain a full range of their services, you would need to go to their main office located near the Clock Tower in Dubai.
2. Get the approval of the right minister for your company’s category. For example, if your company offer financial services, you might need approval from the UAE Central Bank. If you offer medical and pharmaceutical products, you would need approval from the Health Ministry.
3. Check how much you can own from your business. If you are an expat, you are allowed to own 49% of your business and you need to find a local agent or sponsor. However, there are some instances that you can own 100% of your company. One good example is when you choose a free zone as your place of business.

[...continue reading]

Company Formation: Limited Liability Company (LLC)

A Limited Liability Company or LLC is the most common form of business setup in Dubai and in the UAE as a whole. Thus, it is not difficult to see that the business you want to set up in Dubai right now would fall under the LLC category.

So, how can you form your own limited liability company in Dubai? That is exactly what you are going to learn through this blog.

What is an LLC?

Limited Liability Company or LLC in the UAE requires 2-50% shareholders. It is called limited liability in a sense that all shareholders’ liabilities are only limited to their shares of the paid in capital. This means that shareholders will not be liable for any debt or liability of their company.

LLCs are highly common in Dubai because of its hybrid nature of combining the benefits of both a corporation and a partnership or sole proprietorship form of business. Because of this, an LLC offers a great deal of flexibility when it comes to operating your business. You can even trade anywhere in the UAE.

To get a more in-depth understanding of an LLC, it is highly recommended that you speak to a qualified commercial lawyer in Dubai.

Things you need to know about LLC

If you are an expat and you want to establish an LLC, you would need to obtain a local agent or sponsor to do so. The UAE government has a strict law when it comes to owning a business. Thus, you can only own a maximum of 49% of your company while the rest should be owned by the local agent.

As this might be the case, local agents could simply for formality. They usually don’t get involved in running your business, but they do help in preparing legal documents and meeting government requirements.

Setting up an LLC in Dubai

There are various steps that you should take when it comes to starting your LLC company. If you are not sure, then don’t hesitate to seek the help of business setup consultants in Dubai.

The first stop you should make is the Department of Economic Development. You need to register your company with them. You can apply online or visit their office in person.

[...continue reading the article]