To start a business in UAE, there are two options namely free zone and the mainland. Both the economic zones have their benefits for the investors to finance according to their budget and ease of business activities allowed in these locations but In this blog, we will discuss another type of Company setup in Dubai that foreigners can own in UAE i.e. Civil Company. Before going deep into the structure and formation of the civil company in Dubai, First, we shall understand what a civil Company is.
Civil Company:
It is a special type of company in which two or more individuals having the same or different professional skill sets can provide their services together as partners in a company. Professionals like doctors, lawyers, architects, consultants, and engineers usually form a civil company and it is 100% owned by two or more partners whether it is in Dubai or anywhere else in UAE. It is an ideal opportunity for professionals who want to carve their name and want to make their identification not only as employees but as a firm in their field of specialization in Dubai’s global marketplace. There is no hard and fast rule, that owners or shareholders of the company must belong to UAE. In case one or more partners of the company are foreigners, then you need to hire a LSA (Local Service Agent) to support the license of your civil company.
What requires to start a civil company in Dubai?
- Civil company is also referred to as professional company forms with the partnership of two or more service-related professionals under one roof.
- The minimum number of partners required for a civil company is two and the upper limit is fifty.
- Most of the professional categories allow 100% foreign ownership which means all the partners can be foreigners except engineering which needs to have resident shareholders with 51% Shares Company in UAE.
Two things distinguish the civil company from LLC in Dubai:
1. Local Agent:
A civil company requires a UAE national as a local service agent. He is usually appointed under the Local Service Agreement and is responsible to provide local services and conducting business-related activities in Dubai. He can act as a moderator between government and foreign partners of the company and he is paid jointly by all the company partners on annual basis for his services which include communication with government bodies, issuance and renewal of professional license every year, residential visas, and local management services. Unlike Local partner rights in LLCs, they don’t have company owns shares in the civil company.
2. 100% Liability:
Due to 100% foreign ownership of the civil company, the stakeholder partners of the firm are responsible to pay for all the expenses, and financial losses including debts jointly occurring in the company. They are not facilitated with limited liability as per government policy for LLCs .instead the partners are entitled to 100% liability of the company.
Benefits of starting a civil company:
Opening a civil firm in UAE has many positive sights. Let’s have a look at them one by one:
- Quick and simple setup:
Setting up a civil company in UAE is an easy step if you are eligible and meet all the criteria mentioned by DED, you can register with DED within 90 minutes.
- Multiple Visas:
The civil company allows business owners to apply for multiple visas, with no visa limit in mainland businesses. Although, the more visas you apply for, the more office space you need to acquire. Generally, 100 sq. ft. of office space needs to be added on increased per visa.
- Sponsorship of dependents:
Other than sponsoring the employee, being a shareholder of the civil company you are entitled to sponsor the dependents which include, your spouse, children, driver, and other staff members.
- Low start-up cost:
People new to UAE enjoy a civil company setup for its minimum cost of start-up, as it does not ask to share capital with a resident of UAE, and the total number of partners is equally responsible to share the billing and expenses of the company.
Steps to set up a civil company in Dubai?
Setting up a civil company can be challenging for entrepreneurs that are new to UAE and are unfamiliar with the company licensing process. You can hire KWSME to turn your risks into beneficial profits but if you want to register your firm on your own, here is a list of steps mentioned below:
- Determine your professional business:
To form a civil company in UAE, the first thing you should know is to determine which professional category you lie in. Select carefully from the list of professional jobs keeping in mind your education and work background what best fits you.
Register Your Civil Company Name:
As your company name must be aligned with the nature of the services you provide. After deciding on the name submit it to the department of economic affairs for approval and to ensure no other company is already registered with this name. Trade names already registered can be crucial to your business in the future.
Application to DED:
To secure initial approval from DED, you first fulfill the application form with all the required information and necessary documentation attached to the application and submit this application to the higher authorities of DED.
Submit Documentation:
Civil company formation requires the following documents:
1Initial approved application signed by all stakeholder partners and LSA.
2Trade Name Certificate.
3.Passport copies for all partners and local service agents.
4. A legal contract agreement with the UAE national resident to be hired as a local service agent by the civil company.
5. Partnership agreements between local partners and foreigners that include all the details regarding the monetary asset, profit percentage, capital, and shareholding information.
6. Contact information containing an address.
7.Tenancy agreement from Land Department.
Obtain License
Once all the mandatory information is submitted to the DED and the required fee is paid by the partners of the civil company. You are good to get your civil company license within 2-3 days and be able to conduct business activities under a professional company in Dubai.
Why choose KWSME:
We can help you in carving your name among the best professional civil companies in UAE by providing you with quality services and can provide you best LSA to assist you in registering your civil company license in Dubai. We prepare all the legal documents and contract necessary between the partners of the firm as well documentation required by DED. To sponsor the dependents from entry license, medical fitness test, Emirates ID, and visa stamping we do all these steps on your behalf in a seamless way. If you still have any queries regarding the formation of a civil company in UAE, Contact our team.
