Things you must know about company formation in Dubai
Dubai is one of the most important business hubs in the region. It connects Asia with Africa and West through its strategic ports. Fact of the matter is that Dubai has a strong and diverse economy that provides endless opportunities for investments. It’s economic policies encourages foreign investment by offering tax relaxations and infrastructure support that is essential for the growth of an emerging market like Dubai.
If truth be told, Dubai has a significant share of small and medium enterprises in its diverse economy. For the further development of this sector, Dubai offers various business structures for the businesses which are divided into three legal statuses, sole proprietorships, partnerships and companies. No matter, if you are setting up a business in Dubai economic departments’ jurisdiction or in a free zone like Dubai Silicon Oasis company setup, you will be offered with the same set of legal entities for your business.
All three of these has their own features that provides various benefits to the businesses. Selecting the right legal status largely depends on the nature of work and products and services offered by a business. If truth be told, all of these also have their own sets of positives and negatives associated with them which can be easily understood by the following legal advantages and disadvantages related to each one of them:
One of the major benefits of sole proprietorship business is that there are no minimum capital requirements for this. Moreover, owner enjoys 100% ownership of the business. However, there are a few restrictions regarding this type of ownership. For instance, if a person wants to run a consultancy business through this type of business he must be qualified to deliver services that he is going to offer. Moreover, this license is only available for UAE and GCC nationals. As a disadvantage, owner is considered fully responsible for any financial obligations related to the business.
Between 2 to 50 partners can form a partnership firm known as LLC (limited liability company) as the name suggests in an LLC formation in Dubai partners are only liable for their share in the company for financial obligations. For this form of business it’s obligatory to have a local partner holding at least 51% shares of the firm.
It can only be established by UAE local or by a GCC national. No matter if it is a one-person company or more, its shares cannot be owned by a non UAE or non GCC national.