The United Arab Emirates has emerged as a top investment destination for international investors. The country offers a unique geographical location and advanced infrastructure facilities to investors. With the help of a strong industrial base, UAE is constantly developing new industries in the country.

 

The government is also playing an important role in attracting foreign investors into the UAE by offering them a tax-free business environment and state of art infrastructure facilities. UAE is also an attractive place for foreign investors because it offers cheap labor, easy availability of raw materials, and market access to key markets like Asia, Europe, and Africa.

 

Moreover, the UAE has become the most preferred logistics hub of the Middle East because of its ideal location near the main shipping routes and advanced infrastructure facilities like Jebel Ali Port which is the world’s biggest man-made harbor.

 

With an exciting economic outlook and a great investment opportunity, business registration in UAE is a solid idea that you can materialize to expand your business globally. 

 

Keep reading to know about the types of companies and licenses you can avail yourself of to register your business in UAE.

Types of Companies in the UAE

When setting up a business in the UAE, many entrepreneurs get confused about the various types of companies available for registration. For this reason, we have put together a brief overview of all the different types of companies that can be incorporated into the UAE along with their main features.

Free Zone Company

A free zone company is a legal entity that can only conduct business activities inside the free zone where it was established. Each free zone has its own set of rules and regulations to follow. For example, some free zones only allow certain types of licenses such as trading or commercial while others do not have such restrictions.

Public Shareholding Company

A public shareholding company is a business that is owned by the public and its shares are traded on a stock exchange. For example, the Saudi Aramco IPO is a case of a public shareholding company because it’s owned by the Saudi government and its shares will be traded on two of Saudi Arabia’s stock exchanges: Tadawul and an international exchange.

 

The Saudi Aramco IPO in December 2019 was the biggest initial public offering (IPO) in history. It valued Saudi Aramco at $2 trillion, which would make it significantly bigger than Apple and Amazon — the two most valuable companies in the world today.

 

The minimum capital required to establish a public shareholding company may not be less than AED 10 million (approximately USD 2.7 million).

Limited Liability Company 

A limited liability company (LLC) is a legal business structure that combines the limited liability of a corporation with the pass-through taxation of a partnership or sole proprietorship.

 

An LLC provides the same limited liability protection as a corporation, meaning your personal assets will be shielded from creditors and lawsuits. However, an LLC is taxed as a partnership or sole proprietorship, which means the business profits and losses pass through to your personal tax return (unless you opt to be taxed like a corporation).

Sole Proprietorship

A sole proprietorship is a business owned by one person and is the simplest type of business entity to form and operate. The owner of a sole proprietorship is called a sole proprietor who can use his or her personal name as the name of the business or choose any other name as long as it complies with state requirements.

 

The owner controls every aspect of the business and keeps all profits made by the business. Moreover, the sole proprietor is also entitled to all profits and is responsible for all losses and liabilities.

Branch Office and Subsidiary

A branch office is a business location where a company conducts its regular business operations and is typically a smaller version of the parent organization. In contrast, a subsidiary is an organization that is completely or partially owned by another company. A subsidiary may be an independent company, but it has to comply with the laws of the state in which it is incorporated and those of the country in which the parent company resides.

 

Both branch offices and subsidiaries have their own departments that report to management on site. Although they are operating divisions within the same business, they are run as separate companies, each with its own mission statement, objectives and goals.

Team Up with Future Directions For Business Registration in UAE

 

With decades of experience in company formation in Dubai, our business consultants can assist foreign investors interested in starting a business in Dubai with the process of registration of any type of company in the UAE. Future Directions has a trusted team of professionals who bring expertise in the fields of business, finance, law, and investment, to provide satisfactory service to foreign expatriates.