

Setting up a Company in the UAE
The diverse commercial landscape of the UAE allows for a variety of entities to trade in harmony. Below we review and compare a few of the common company types that operate in the UAE as set out by Federal Law No 2 of 2015 on Commercial Companies.
Sole Proprietorship
A sole proprietorship is wholly owned by a single individual. Its owner has 100% ownership of the shares and is fully liable for the company’s debts. A benefit of such an ownership structure is that owners have the freedom to run the company as they see fit. They can also receive all of the profits generated.
Limited Liability Company
Another common company type is a Limited Liability Company (LLC). LLCs can be owned by up to 50 shareholders. A shareholder may be a natural individual or a company, unlike in a sole proprietorship where the owner must be a natural person. One of the discerning factors of an LLC is that the company is a separate legal entity and so shareholders have ‘limited liability’. Limited liability means that shareholders are only liable for debts to the extent of the money they invested into the shares. This offers a valuable level protection to shareholders.
Foreign Companies
Foreign companies may operate in the UAE mainland as a branch of their international counterpart. The agent of a foreign company branch must be a UAE national or a company wholly owned by UAE national(s).
It should be noted that these are only a few of the company types in the UAE, and the regulations may vary in a free zone area. It is important to follow the relevant regulatory procedures when setting up any type of company. Feel free to contact us for further information on or for support with the process.
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