The thriving environment of the UAE makes it an attractive location for business professionals. Also, the emirates of Dubai and Abu Dhabi are witnessing great corporate and industrial transformation. Many entrepreneurs want to start a civil company in Dubai to provide services.
In case, you have got the entrepreneurial bug, then United Arab Emirates is calling your name. You can turn your business aspirations into reality by setting up a civil company in the heart of the UAE. That’s true whether, you’re an engineer, lawyer, accountant, or any other professional looking to begin your own venture in Dubai.
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.
Process to set up a civil company in Dubai
Establishing a civil company can turn out challenging for entrepreneurs that are new to the UAE. Either you can register your firm on your own, or can hire professional business consultants like KWS ME. Here is the step-by-step licensing procedure for a civil company in Dubai.
- Decide professional business category
- Choose your civil company name
- Get initial approval from the DED
- Appoint the local service agent
- Rent or lease an office space
- Finalize partnerships and profit sharing
- Apply for suitable business license
- Obtain essential regulatory permits
- Acquire the license after approval
- Put financial foundation with bank account
- Visa processing for partners and staff
Now, we briefly look upon this registration process for a civil company in Dubai.
Decide professional business category
First-of-all, you must determine under which professional business activity you lie in. Pick carefully from the list of professional careers to form a civil company in the UAE. Keep in mind your education and the work background that best fits your skills.
Choose your civil company name
Select a suitable company name that must align with the nature of the civil services you provide. After deciding on the business name, submit it to the Department of Economic Development (DED) for approval. Also, ensure no other company already holds this corporate name.
Get initial approval from the DED
To secure initial approval from DED, you first duly fill the application form with all the necessary information. Also, attach all essential legal documentation with the application. File this application with the DED, acquire the NOC, and reserve the trade name for your business.
Appoint the local service agent
Some professional sectors not fully open to foreign ownership require an Emirati national as a Local Service Agent (LSA). For example, a civil company working in the medical field needs an LSA who helps in doing administrative tasks. Similarly, some professional segments may have to on-board a UAE national local sponsor with minority stake for governmental liaison.
Rent or lease an office space
Civil companies in Dubai must have to lease or rent a physical commercial workspace. Also, a healthcare clinic needs to meet different space requirements in comparison to a construction firm in the UAE. You have to prepare an office lease agreement or a tenancy contract, and submit the cope to the DED.
Finalize partnerships and profit sharing
Civil companies in the UAE can have 2 to 50 partners. Draft the partnership agreement to list down the roles and responsibilities of the shareholders. Outlining the civil company’s legal structure, this MOA notes down the profit-sharing ratios and dispute resolution mechanisms.
Apply for suitable business license
Submit application for business license to the DED that suits your civil company’s activities and pay the fee. Normally, the civil companies in Dubai require to register for a professional license. However, some public facing civil companies may need to get a commercial license.
Obtain essential regulatory permits
You may need additional permits from the relevant UAE authorities to perform specific professional activities. After-all, you need to make sure that your civil company complies with professional industry regulations. These are some examples of the professional sectors which may need to seek additional approvals from regulatory authorities in Dubai.
- Construction, architectural, and engineering businesses (from Dubai Municipality)
- Medical businesses and well-being centers (from Dubai Health Authority)
- Environmental businesses (UAE’s Ministry of Climate Change and Environment)
- Professional law firms (from Dubai Legal Affairs Department)
Acquire the license after approval
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.
Put financial foundation with bank account
Open a corporate bank account for your civil company in Dubai. Essentially, it lays down the financial foundation to let you perform monetary operations. Together with managing your company’s finances, business bank account is necessary for running payrolls and other dealings.
Visa processing for partners and staff
You can apply visa for partners from the General Directorate of Residency and Foreigners Affairs (GDRFA). Also, civil companies in Dubai can file visa applications for the foreign staff. Moreover, owners can sponsor their spouses and other family members through the business visa scheme.
Necessary documents for civil company registration in Dubai
Civil company formation in Dubai requires the following legal documentation.
- Initial approved application signed by all stakeholder partners and LSA
- Trade name certificate
- Passport copies for all partners and local service agents
- A legal contract agreement with the UAE national resident to be hired as a local service agent by the civil company
- Partnership agreements between local partners and foreigners that include all the details regarding the monetary assets, profit percentage, capital, and shareholding information
- Contact information containing an address
- Tenancy agreement from the Dubai Land Department
Requirements to open a civil company in Dubai
These are the requirements for starting 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 they can have foreign partners.
- However, engineering businesses need to have resident shareholders with 51% shares.
Benefits of opening a civil company
These are the advantages of beginning a civil firm in Dubai, UAE.
- Quick and simple setup
- Low start-up cost
- Multiple visas
- Sponsorship of dependents
Let’s have a look at these perks of launching a civil company in Dubai.
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.
Low start-up cost
People new to the 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.
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.
Defining the civil company
A civil company is a special type of business in which two or more individuals can provide their services together. These partners can have the same or different skill sets (and expertise). Professionals like doctors, architects, consultants, and engineers usually form a civil company.
Every civil company 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. They can 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 the UAE. In case, one or more partners of the company are foreigners. Then they can hire a local service agent (LSA) for regulatory liaison for the license of the civil company.
Difference between the civil company and LLC in Dubai
These factors distinguish the civil company from a limited liability company (LLC) in Dubai.
- Local service agent
- 100% liability
Next, we compare the civil company with an LLC in Dubai.
Local service 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.
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.
Conclusion
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.
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