Guide to Setting Up a Limited Liability Company (LLC) in Dubai

One of the key aspects of opening any business in the UAE is the legal entity type you choose for it, as it has to suit your business model and provide you with all the essential opportunities without being overly complicated, especially in terms of formation.

An LLC fits all these criteria, and it’s no wonder that this is the most common company type for emerging businesses. So, let’s explore this topic in detail and learn the specifics of LLC company formation in Dubai.

What is an LLC?

LLC stands for Limited Liability Company, which is a business structure that combines the limited liability protection of a corporation with the flexibility and tax benefits of a sole proprietorship or partnership.

In recent years, the UAE has continued to modernize its Commercial Companies Law, giving LLCs more flexibility in terms of corporate governance and shareholder arrangements. This includes the ability to create different share classes and tailor voting and dividend rights, which is particularly relevant for investors, joint ventures and structured deals.

The primary advantage of a Limited Liability Company is that its members are typically not personally liable for the company's acquired debts and liabilities. This effectively means that if the business gets sued or goes broke and cannot pay its debts, the members' personal assets are usually secured.

In addition, LLCs offer variability in management and tax structure. They can choose to be taxed as a sole proprietorship, partnership, or corporation. Additionally, the operational structure of an LLC is often less formal than that of a corporation.

Limited Liability Companies are massively popular among startups and SMEs everywhere, including the UAE, because they provide all the legal qualities and functions necessary for running a business together with liability protection without some of the formalities and restrictions associated with larger entities such as corporations.

Advantages of opening an LLC in Dubai

Some of the advantages of opening an LLC company in Dubai have to do with the specifics of the LLC as a legal entity, others – with Dubai itself and the UAE in general. The first category includes the following benefits:

1. Limited liability protection. Among the primary perks of an LLC company is providing limited liability protection to its shareholders, meaning their assets are generally secured from any business debts or liabilities.
2. Easy and straightforward formation process. As LLCs are the predominant company structure type for businesses, the formation process is streamlined and does not require much time or paperwork.
3. Multiple shareholders. As mentioned earlier, an LLC company can include up to 50 shareholders, which offers a high degree of flexibility.
4. 100% foreign ownership. Previously, LLCs in the UAE generally required a local sponsor to hold 51% of the company’s shares. Today, most business activities on the UAE mainland can be carried out through LLCs that are 100% foreign‑owned, with no mandatory UAE national shareholding. Certain strategic and highly regulated activities may still require UAE national participation or special structures as per the federal Commercial Companies Law and the rules of the competent authorities.

And here are the key advantages related to Dubai and the UAE as a whole:

1. Taxation. Dubai offers a very competitive tax environment for businesses. The UAE corporate tax regime applies a 0% rate on taxable profits up to AED 375,000 and a 9% rate on profits above this threshold for most taxable entities, while there remains no personal income tax on individuals. Certain qualifying free zone companies may benefit from preferential corporate tax treatment if they meet specific conditions, which makes Dubai particularly attractive for both SMEs and larger enterprises.
2. Extensive market accessibility. Dubai's geographic location provides access to emerging markets in the Middle East, Africa, and Asia. This can offer a plethora of opportunities for expansion and international trade.
3. Business-friendly climate. Dubai has a well-established infrastructure, business-friendly regulations, and a transparent legal framework that makes it easier to set up and operate a business.
4. Asset protection. By establishing an LLC company in Dubai, owners can also benefit from the asset protection provided by the jurisdiction’s legal framework.
5. No currency restrictions. As it currently stands, there are no general foreign exchange controls or currency restrictions in the UAE, which makes it easier to transact in different currencies and facilitate international trade. Local banks, however, apply strict KYC and AML procedures and may set internal limits or enhanced checks for certain types of transactions.
6. Professional reputation. Operating from Dubai can enhance a company’s professional reputation as it is seen as a global business hub with a robust economy.
7. Residency visa. Setting up a Limited Liability Company in Dubai can also open up the potential for obtaining residency visas for owners and their families.
8. Access to free zones. Dubai hosts numerous free zones, each with its own regulator and set of incentives such as full foreign ownership, customs exemptions and duty‑free import or re‑export of goods. Entrepreneurs can choose between establishing a mainland LLC regulated by the Dubai Economy and Tourism (DET) or forming a separate Free Zone LLC (FZ‑LLC) under a specific free zone authority, depending on their business model and target markets.

However, before proceeding with setting up an LLC in Dubai, it's essential to consult with qualified business setup advisors who are knowledgeable about local regulations and customs to ensure that this is the best option for your specific business needs.

LLC company formation costs in Dubai

The total cost of forming an LLC company in the UAE includes many variables depending on such aspects as the type and size of the intended business, Investor and Employee visas required, and the specific requirements set by the government and licensing authorities.

Generally, LLC company formation in Dubai typically starts from around AED 15,000–20,000 for a basic mainland license, and the final cost can be significantly higher depending on the type and scale of the business, the number of visas, the chosen jurisdiction (mainland or free zone) and any additional government or service fees. The exact figure can only be determined after a detailed assessment of your planned company structure and requirements. 

1. Professional and legal fees. You may need to engage the services of a local law firm or a business consultancy to assist you with the paperwork, legal documentation, and navigating through local regulations. The fees would depend on the complexities involved and the services provided.
2. Trade name reservation fee. Before registering your company, you will need to reserve a trade name for your business. This incurs a fee that depends on the duration of the reservation.
3. Initial approval certificate. This is a mandatory expense particularly applicable for LLC formation in the UAE mainland. The cost can vary with regard to your business activities and intended location.
4. License fees. The UAE demands businesses to obtain specific licenses based on their activities or operations, such as commercial trading, professional services, industrial activities, etc.
5. Registration fees. The fees associated with registering your Limited Liability Company with the Department of Economic Development or other relevant authorities.
6. Visa costs. If you plan on applying for UAE visas for yourself or any employees, these costs should be factored in as well.
7. Office space rental (optional). Most free zones do not require you to rent a traditional office, as they can issue a license with a flexi‑desk or shared workspace lease. On the mainland, every company must have a registered business address, but the exact requirements (physical office, flexi‑desk or business center solution) and the timing for providing a lease agreement depend on the license type and current practices of the Dubai Economy and Tourism (DET). In many cases, a more flexible approach is available in the first year, with full office requirements becoming stricter at the time of renewal.

All these costs can add up, so it’s vital to understand all the financial implications involved. Also, forming an LLC company in one of Dubai's many free zones will have different associated costs compared to forming an LLC outside of these zones.

Step-by-step process of LLC company formation in Dubai

As with any other legal structure type, the process of forming an LLC company in the UAE involves several steps. While the specific requirements and procedures may be different with regard to the type of business activity, the location (mainland or free zone), and certain other factors, here is a general step-by-step process for setting up an LLC in Dubai:

1. Decide on the type of business activity. Determine the type of business activity you intend to conduct. This will influence various aspects including licensing requirements and the jurisdiction in which you can operate.
2. Pick a name for your company. Come up with a unique name for your company, following the naming conventions and regulations set by the authorities.
3. Engage with a local consultant or law firm. Seek out a UAE-based consultancy or a law firm that specializes in business setup services in Dubai to assist you with the LLC formation process. They can guide you through legal requirements, paperwork, and compliance aspects based on your specific needs.
4. Determine the jurisdiction. Decide whether you want to set up your company in a mainland area or within one of Dubai's many free zones. Each jurisdiction has its own regulations and benefits.
5. Prepare necessary documents. Gather all required documents such as passport copies of shareholders, proof of initial approval from relevant authorities, and application forms as per the guidelines provided by your chosen jurisdiction.
6. Submit the documentation. Bring in all the mandatory documentation collected beforehand including application forms, legal documents, and approvals to the Department of Economic Development (DED) if setting up on the mainland or to the relevant free zone authority if having chosen a free zone for your LLC formation.
7. Acquire an Initial Approval Certificate.  Once your documentation is processed and approved, you will be granted an Initial Approval Certificate from the Dubai Economy and Tourism (DET, formerly DED) (for mainland businesses) or the corresponding free zone authority.
8. Rental agreement (mainland). If setting up in mainland Dubai, secure office space as per requirements; this often involves drafting lease agreements for office premises.
9. Payments and final submission. Pay applicable fees including license fees, registration fees, and visa costs for any employees/shareholders if required, and then make final submissions of all required documents as per guidelines provided by authorities.
10. Receive trade license. Upon completing all these steps and meeting all regulatory requirements, you will receive your LLC license which signifies that your Limited Liability Company is now officially registered and operational.

Today, many of these steps can be completed partially or fully online via the official DET and free zone e‑services portals, which significantly speeds up the licensing process and reduces the amount of in‑person visits required.

Documents required for LLC company formation in Dubai

When starting an LLC company in Dubai, there is an array of necessary documents to be prepared and submitted in the process. These documents may slightly vary depending on the specific requirements of the licensing authority guidelines, the company’s business activity, structure, etc. However, here is a list of common documents needed to start an LLC in Dubai:

• Passport copies and, where applicable, UAE residence visa copies of all shareholders and authorized signatories.
• Proposed trade name reservation certificate.
• Completed company registration application form, signed by all shareholders or their authorized representatives.
• Attested power of attorney if a legal representative is acting on behalf of any shareholder(s).
• No Objection Certificate (NOC) from the current sponsor or employer if any shareholder holds a UAE residence visa (requested on a case‑by‑case basis, depending on the jurisdiction).
• Tenancy contract or Ejari certificate for a valid business address in Dubai (for mainland LLCs that are required to provide an office or flexi‑desk solution at the time of licensing or renewal).
• Passport‑size photographs of shareholders and managers, as required by the licensing authority.
• Memorandum of Association (MoA) and any other incorporation documents in the format prescribed by DET or the relevant free zone authority.
• Any additional approvals or documents required by specific regulatory bodies depending on the nature of your business activity (for example, for healthcare, education, financial services, etc.).

The exact list of documents and attestations may vary depending on your activity, the chosen jurisdiction and whether the shareholders are individuals or corporate entities, so it is strongly recommended to work with a local business setup expert who can provide a tailored checklist and ensure full compliance.

As mentioned, the exact list of documents you may need will depend on several factors, so it's recommended to consult with a local business setup expert who can provide accurate information based on your specific situation and ensure compliance with all UAE regulations.

LLC company formation with Emirabiz

At Emirabiz, we provide a full range of company formation and follow-up support services in the UAE. We can aid you in starting and managing an LLC company in Dubai or guide you in the aspects of daily business operations, laws and regulations, and the local business climate.

Our experts provide a range of related services:

• Company setup and registration
• Business licenses
• Corporate support
• Legal advice
• Taxes and accounting
• VAT-related services
• Consultancy on all business-related issues
• And more

We can provide you with advice on numerous topics regarding LLC setup in Dubai and help you get your company up and running in no time.

Contact our team today and get a free consultation!