In the United Arab Emirates, there are different types of business establishments applicable. The various legal types can be Sole Proprietorship, Limited Liability Company, Branch Office, Free zone Company, Civil Business Company, Private Shareholding (Joint Stock) Company etc.
The UAE Commercial Companies Law requires that each company established in the UAE have one or more UAE National Partner(s) who hold at least 51% of the Company’s Capital.
- Companies established in Free zones.
- Sole Establishment and Civil Companies.
- Companies that undertake certain activities are exempt from the 51% requirement, including companies involved in the oil and gas industry, Companies that produce electricity and gas, Companies involved in the treatment of water and transmission and distribution.
- Foreign Banks are exempt from having to appoint a sponsor.
The primary concern of expats when setting up an Onshore Limited Liability Company (LLC) is that the UAE law requires a local partner to own 51% of the shares – this generally forces people to think twice about setting up in the UAE. Starting a free zone company solves this as there is no such requirement in free zones.