How to Set Up an LLC Company in the UAE
An LLC (limited liability company) is the most widely used structure for foreign-owned businesses on the UAE mainland. It lets one to fifty shareholders own a company while each shareholder’s liability is limited to the capital they put in. Since the 2021 reform of the Commercial Companies Law, foreign investors can own 100% of a mainland LLC for most commercial and industrial activities, so you no longer need an Emirati shareholder.
Before you start, it helps to know that “LLC” can refer to two different set-ups depending on where you register:
- a mainland LLC licensed by an emirate’s economic department
- a free-zone company (often called an FZ-LLC or FZCO) registered under a free zone’s own rules
Picking the right one matters more than any single step in the process, so that’s where this guide starts.
What Is an LLC Company in the UAE?
On the mainland, an LLC is governed by Federal Decree-Law No. 32 of 2021 on Commercial Companies. The law describes it as a company with between two and fifty partners, where each partner is liable only up to their share of the capital. The same law also lets a single individual or corporate body form and own an LLC on its own.
A few legal features shape how an LLC works day to day:
- Name: The company name must include “Limited Liability Company” or “LLC”. A single-owner LLC is identified as a sole-proprietorship LLC.
- Management: One or more managers run the company. They can be shareholders or outside appointees, and they’re named in the Memorandum of Association (MoA) or appointed by the general assembly.
- Shares: Capital is divided into shares of equal value. A ministerial or Cabinet decision can set a minimum capital, but the law itself doesn’t set one.
- Separate legal personality: The company owns its assets and carries its own debts. Shareholders generally aren’t personally liable, although UAE law allows exceptions in cases such as fraud or misuse of the company.
Can a Foreigner Own 100% of an LLC in the UAE?
Yes, for most activities. Before 2021, a mainland LLC needed a UAE national to hold at least 51% of the shares. The reformed Commercial Companies Law removed that general rule.
The exception is strategic-impact activities. For these, the authorities can still require a specific level of Emirati ownership or extra approvals. Examples include security and defence, banking, insurance and exchange houses, and telecommunications. The list is set and updated by the authorities, so check your exact business activity with the licensing authority before you fix the shareholding.
Some professional activities are licensed differently and may involve a local service agent. A service agent is an administrative role paid a fixed fee, not a shareholder. If your business is professional services rather than trading or industrial, compare the LLC with a civil company in Dubai before you decide.
Mainland LLC or Free-Zone LLC: Which Do You Need?
This decision matters most, and it depends mainly on where your customers are.
| Factor | Mainland LLC | Free-zone company (FZ-LLC / FZCO) |
|---|---|---|
| Governing rules | Federal Commercial Companies Law plus the emirate’s licensing rules | The free zone’s own companies regulations |
| Licensing authority | The emirate’s economic department (e.g. DET in Dubai, ADRA in Abu Dhabi, SEDD in Sharjah) | The free-zone authority (e.g. DMCC, IFZA, RAKEZ) |
| Where you can trade | Directly anywhere in the UAE market, as well as internationally | Inside the free zone and internationally. Selling into the UAE mainland generally needs a distributor, a mainland branch or an additional permit where the emirate offers one. |
| Government contracts | Eligible, subject to the tender’s conditions | Generally limited without a mainland presence |
| Office | Usually physical premises with a registered tenancy contract (Ejari in Dubai) | Flexi-desk to warehouse, depending on the zone and package |
| Foreign ownership | 100% for most activities (see exceptions above) | 100% |
| Best fit | Retail, contracting, local services, anyone invoicing UAE clients directly | Holding structures, international trading, consultancy and tech businesses serving clients mostly outside the UAE |
If most of your revenue will come from UAE customers, a mainland LLC is usually the cleaner choice. If you mainly trade internationally or want a lighter set-up, a free-zone company can cost less to run.
For a detailed comparison in Dubai specifically, see our guide to Dubai mainland vs free zone business setup.
Which Emirate Should Your LLC Be Registered In?
The federal law is the same across the UAE, but each emirate licenses mainland companies through its own authority, with its own fees, office rules and processing systems.
- Dubai: Licensed by the Department of Economy and Tourism (DET). It’s the largest market and the most common choice for companies serving UAE-wide clients. See business setup on the Dubai mainland.
- Abu Dhabi: Mainland registration moved to the Abu Dhabi Registration and Licensing Authority (ADRA), launched in January 2025. It’s relevant for businesses working with Abu Dhabi government entities or the energy sector. See business setup in Abu Dhabi.
- Sharjah: Licensed by the Sharjah Economic Development Department (SEDD). It often has lower premises costs and is a good fit for industrial and trading businesses.
- Northern emirates (Ajman, Ras Al Khaimah, Umm Al Quwain, Fujairah): Each has its own economic department. These can suit cost-sensitive or activity-specific set-ups. See business setup in Fujairah.
Choose the emirate based on where you’ll operate and hire, not only on the licence fee. Rent, visa costs and renewal fees usually outweigh the difference in initial licence costs.
How Do You Set Up an LLC Company in the UAE?
The sequence below describes a typical mainland LLC. Portals, document formats and the order of some steps vary by emirate and activity.
- Define your business activity. The activity decides your licence type (commercial, professional or industrial), whether full foreign ownership applies, and whether you need any external approvals. Getting this wrong is the most expensive mistake to fix later.
- Confirm the jurisdiction and emirate. Mainland or free zone, and which emirate, as covered above.
- Reserve a trade name. It must follow UAE naming rules and end with “LLC”. See our guide to UAE business name rules.
- Get initial approval. This confirms the authorities have no objection to the shareholders carrying out the activity.
- Draft and notarise the Memorandum of Association. The MoA sets out shareholdings, capital, management powers, profit sharing and share transfer rules. This is where you plan for future investors and exits (see the 2025 amendments below).
- Secure premises. Sign a lease for an approved commercial space and register it (Ejari in Dubai). The premises must suit your activity. See Ejari tenancy contracts in Dubai.
- Get external approvals if needed. Regulated activities such as healthcare, education, food and financial services need sign-off from the relevant authority.
- Pay fees and receive the trade licence. The licence is issued once the documents, premises and approvals are in place.
- Get an establishment card and visas. The establishment card registers the company with immigration so it can sponsor investor and employee residence visas.
- Open a corporate bank account. Banks carry out their own due diligence on shareholders and activity. See opening a corporate bank account in Dubai.
- Register for corporate tax. Every UAE LLC must register with the Federal Tax Authority, even if it expects to pay no tax.
Timelines depend mostly on external approvals and premises. A standard trading or consultancy LLC with its documents ready moves much faster than a regulated activity.
What Documents Are Needed to Register an LLC?
Exact requirements differ by emirate and activity, but most applications need:
- Passport copies of all shareholders and managers (and a UAE visa or Emirates ID where the person is a resident)
- For a corporate shareholder: its certificate of incorporation, constitutional documents and a board resolution approving the investment, legalised and attested for use in the UAE
- The notarised Memorandum of Association
- A power of attorney, if a representative is handling the application
- The trade name reservation and initial approval
- A tenancy contract or Ejari registration for the premises
- Any external approval letters for regulated activities
- Ultimate beneficial owner (UBO) details
Documents issued outside the UAE usually need attestation. This often takes longer than people expect, so start it early.
How Much Does It Cost to Set Up an LLC in the UAE?
There isn’t one accurate figure. The total depends on the emirate, the activity, the premises and how many visas you need. It helps to budget in four groups:
| Cost group | What it includes | Type |
|---|---|---|
| Licensing | Trade name, initial approval, trade licence fee, MoA notarisation, any external approval fees | Government / authority fees |
| Premises | Rent, tenancy registration and any fit-out the activity requires | Third party |
| Immigration | Establishment card, and per visa: entry permit, medical test, Emirates ID and residence visa | Government fees |
| Professional support | Setup consultancy, MoA drafting, document attestation, PRO services | Optional / service fees |
Rent is usually the largest item for a mainland LLC, and it recurs every year along with licence and visa renewals. For current Dubai figures, see our Dubai business setup cost guide. Treat any single “package price” you see online as a starting point, not the full cost.
Is There a Minimum Capital for a UAE LLC?
The Commercial Companies Law doesn’t set a fixed minimum capital for LLCs. It allows the authorities to set one by decision. In practice, the shareholders set the capital in the MoA, and some activities or authorities require a specific amount or proof of deposit.
Setting capital too low can cause problems with banks, visa quotas or certain approvals. Setting it high doesn’t reduce your liability exposure in any meaningful way, but it does commit that amount on paper. Choose a figure that fits your activity and funding plans.
What Changed for UAE LLCs in 2025?
Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law. It came into force in October 2025. For LLC owners, the most practical changes are:
- Different share classes: LLCs can issue shares with different rights over voting, profits, redemption and liquidation. This is useful for bringing in investors without giving up control. Detailed implementing rules are expected from the Cabinet.
- Drag-along and tag-along rights: These common investor protections can now be written into the company’s constitutional documents with clear legal recognition.
- Re-domiciliation: Companies can move their registration between authorities (for example, between mainland and a free zone) without losing legal continuity, subject to implementing regulations.
- Share transfer on death and share buy-backs: The MoA can now provide for these, which helps with continuity planning.
If you’re forming an LLC with more than one shareholder, or you plan to raise investment, draft the MoA with these options in mind. That’s easier than amending it later.
What Are an LLC’s Obligations After Licensing?
Many new owners miss this part. A licensed LLC has ongoing duties:
- Corporate tax: Register with the Federal Tax Authority and file annual returns. Taxable profit above AED 375,000 is taxed at 9%. Businesses with revenue of AED 3 million or less may elect Small Business Relief, which has been extended to tax periods ending on or before 31 December 2029. It doesn’t apply to Qualifying Free Zone Persons or members of large multinational groups. See UAE corporate tax and Small Business Relief.
- VAT: Register once taxable supplies pass the mandatory threshold.
- Beneficial ownership (UBO) register: Keep a register of the individuals who ultimately own or control the company and file it with the licensing authority. Update it when ownership changes.
- Auditor and accounts: The Commercial Companies Law requires an LLC to appoint an auditor. Corporate tax rules separately require audited financial statements from certain businesses, for example where revenue exceeds AED 50 million.
- Statutory reserve: The 2021 law requires 5% of annual net profit to be set aside until the reserve reaches half of the share capital, unless the MoA provides otherwise where the law allows.
- Renewals: The trade licence, tenancy contract, establishment card and visas all renew on their own cycles.
What Are the Advantages and Limitations of an LLC?
Advantages
- Liability is limited to your capital contribution
- 100% foreign ownership for most activities
- Direct access to the whole UAE market, including government work
- Can sponsor residence visas for owners and staff
- The 2025 amendments give it investor-friendly features that used to be available only to joint-stock companies
Limitations
- Usually needs physical premises, which is a recurring cost
- More compliance than a sole establishment
- Some activities are still restricted or need Emirati participation
- Shares aren’t freely tradeable. Transfers follow the MoA and legal procedure.
If you want to hold investments rather than trade, a holding company may suit you better. If you’re extending an existing overseas company, compare the LLC with a branch office.
What Mistakes Should You Avoid When Forming an LLC?
- Choosing the jurisdiction on the package price alone. A cheap free-zone licence is expensive if your customers are on the mainland.
- Using a template MoA. Default clauses on share transfers, management powers and deadlock cause most disputes between shareholders later.
- Assuming 100% ownership without checking the activity. Confirm it before you commit to premises.
- Leaving document attestation until last. Overseas corporate documents are the most common cause of delays.
- Forgetting the post-licence obligations. Missing corporate tax registration or UBO filings can lead to penalties.
How Can KWS Middle East Help You Set Up an LLC in the UAE?
KWS Middle East helps founders decide between a mainland LLC and a free-zone company, choose the right emirate and activity, and handle trade name reservation, MoA drafting, licensing, visas and post-setup compliance. If you’ve already decided on Dubai, our LLC company setup in Dubai service covers the full process.
Planning to form an LLC company in the UAE? KWS Middle East can review your activity, ownership structure and target market, then recommend the right jurisdiction and emirate before you commit to a licence or premises.
Fees, ownership rules and procedures change. This guide reflects the position as of September 2026. Confirm current requirements with the relevant licensing authority before applying.