Dubai LLC Formation: Complete Guide for Foreign Founders

Before June 2021, most mainland business activities required a UAE national to hold at least 51% of the company. That rule is gone. Federal Decree-Law No. 32 of 2021 removed the mandatory local-partner requirement for the vast majority of commercial and industrial activities.

A handful of strategic sectors still have ownership caps: oil and gas exploration, water utilities, postal services, and a few defense-related activities. Everything else, from trading to real estate brokerage to professional services to e-commerce, can be 100% foreign-owned on the mainland. This is fundamentally different from a free zone: a mainland LLC can trade directly with UAE customers, bid for government contracts, and open branches across all seven emirates without extra permits.

The structure is called a Limited Liability Company. Each shareholder's liability is capped at their paid-in capital. The company has its own legal personality, can own real estate in its name, and can sponsor employee and investor residence visas.

The UAE does not set a single fixed minimum for all LLCs, but the Dubai Department of Economic Development applies a practical AED 300,000 threshold for most commercial activities. Financial services and activities involving professional liability may require higher capital set by the relevant regulator.

Here is what most founders miss: the capital does not need to be deposited before incorporation. You declare it in the Memorandum of Association, then open a corporate bank account after the license is issued and deposit the capital there. It becomes working capital, not a locked reserve.

For activities where DED sets no specific minimum, some founders register with as little as AED 10,000 to AED 50,000. But a proper trading or import-export LLC is typically capitalized at AED 300,000 or more, both because banks expect it and because suppliers and customers take it as a sign the business is serious.

If you have multiple shareholders, the capital splits into shares of equal value. A shareholder with 30% of the company owns 30% of the shares and their liability to third parties is limited to 30% of the declared capital.

A Dubai LLC needs a minimum of one shareholder and can have up to fifty. A single-person LLC is perfectly valid.

The manager, or managing director, must be a named individual rather than a company. There is no requirement for the manager to be Emirati or even UAE-resident, but in practice the manager's passport copy is part of the registration paperwork. If you plan to live in Dubai, you will sponsor your own residence visa through the company, and the manager's visa is usually the first one issued.

Shareholders can be individuals or other legal entities, including foreign companies. A corporate shareholder needs its certificate of incorporation, articles of association, and a board resolution authorizing the investment, all attested through the UAE embassy in the country of origin or via apostille where applicable.

No restriction exists on foreign nationals being shareholders or managers in a Dubai mainland LLC. Alsama handles the legalization and translation of all foreign-issued documents.

For individual foreign shareholders:

• Valid passport with at least six months remaining at the time of submission
• Proof of home-country address, such as a utility bill, bank statement, or official document dated within three months
• If the shareholder already holds a UAE residence visa under another company, a no-objection certificate from the current employer

For corporate shareholders:

• Certificate of incorporation
• Articles or memorandum of association
• Board resolution authorizing the investment
• Register of directors and shareholders
• All documents must be attested through the UAE embassy in the issuing country and then by the UAE Ministry of Foreign Affairs, or carry an apostille if the country is a party to the Hague Convention

For foreign shareholders, documents issued abroad must go through the standard legalization process: either an apostille stamp if the issuing country is party to the Hague Apostille Convention, or attestation through the UAE embassy in the issuing country followed by UAE Ministry of Foreign Affairs authentication. Allow two to eight weeks for the full legalization chain depending on the country. Alsama coordinates this and will advise on the exact process and current wait times for your jurisdiction.

Beyond personal documents, you will need trade name reservation from DED, an initial approval certificate, and an Ejari-registered office lease before the final license is issued.

Step 1: Activity selection and initial approval. Decide on the business activity or activities. DED categorizes them as commercial, industrial, or professional. The activity determines the license type and whether additional approvals are needed from sector regulators. A food trading company needs Dubai Municipality sign-off; a financial services company needs CBUAE or DFSA oversight.

Step 2: Trade name reservation. Submit three preferred names to DED. Names cannot duplicate existing registered names, must not use offensive language, and cannot include generic terms like UAE or International without justification. Approval normally takes one to two business days.

Step 3: Initial approval. DED confirms there is no legal barrier to the activity. Two to five business days.

Step 4: Memorandum of Association. Draft and notarize the MoA at a Dubai Notary Public. It states the company name, address, activities, capital, shareholder details, and management structure. If shareholders are abroad, a notarized and legalized power of attorney lets a local representative sign on their behalf.

Step 5: Office lease. Secure a physical office and register the lease with Ejari. For some service activities, a dedicated desk in a co-working space is accepted.

Step 6: Final license. Submit all documents to DED and pay the license fee. DED issues the commercial license, which is the company's core operating permit. Three to seven business days once documents are complete.

Step 7: Corporate account opening. Take the license, MoA, and shareholder passports to a UAE bank. Account opening for a newly formed LLC currently takes two to eight weeks at most banks, depending on the shareholder profile and KYC process.

Step 8: Residence visa applications. Use the new license to apply for investor or manager residence visas. Processing takes five to ten business days after medical testing and Emirates ID biometrics.

If your documents are already attested, expect four to eight weeks from submission to issued license. If documents from abroad still need the legalization chain, add two to eight weeks for that depending on the issuing country.

Government fee breakdown (approximate, fees change periodically):

• DED initial approval: AED 200 to AED 400
• Trade name reservation: AED 600 to AED 800
• MoA notarization: AED 1,200 to AED 2,500 depending on capital size
• DED commercial license fee: AED 8,000 to AED 15,000 depending on activity
• Office lease: AED 15,000 to AED 60,000 per year. Business Bay and DIFC are higher; Deira and Bur Dubai are lower.
• Ejari registration: AED 195
• Chamber of Commerce membership: AED 1,200 to AED 3,000
• Investor visa per person: AED 4,000 to AED 6,000 including medical and Emirates ID

For a standard single-activity trading LLC with two investor visas, total government fees plus office lease typically run AED 40,000 to AED 70,000 in the first year. The office lease is usually the biggest line item. Alsama's service fee is quoted after the initial consultation because scope varies by activity, number of shareholders, and whether document legalization is needed.

The UAE introduced a federal corporate tax of 9% on taxable profits exceeding AED 375,000 per financial year, effective for financial years starting on or after June 1, 2023. Profits up to AED 375,000 are taxed at 0%. Small business relief applies for companies with revenues under AED 3 million, subject to conditions that the Federal Tax Authority publishes and updates.

VAT at 5% is mandatory once annual taxable turnover exceeds AED 375,000, and voluntary between AED 187,500 and that threshold.

Annual obligations: renew the commercial license each year at a similar cost to the initial license, keep proper accounting records, file a corporate tax return, and renew employee and investor visas every two to three years.

A Dubai mainland LLC is not required to publish accounts publicly, but bookkeeping is a legal requirement under corporate tax law. The UAE has no personal income tax, no capital gains tax on individual shareholding, and no withholding tax on dividends paid to foreign shareholders.

For a foreign national, a Dubai mainland LLC does two things at once: it establishes a commercial presence in the UAE and provides the basis for a two-year or five-year residence visa.

The investor visa tied to a mainland LLC lets you live and work in Dubai, open personal bank accounts, get a UAE driving license, and sponsor family members. It is not a Golden Visa, but it is a fully valid residence that renews as long as the company stays active and licensed.

Banking is often the first question new LLC founders ask about. UAE banks follow standard international KYC and AML procedures. For newly incorporated companies, banks assess the application based on the nature of the business activity, the quality of documentation, and the founder's overall profile. Some banks move faster than others, and the right choice depends on your business type and expected transaction volumes. Alsama stays current on which institutions are actively onboarding new companies and can point you toward the most suitable option for your situation.

For capitalizing the company, founders typically transfer initial capital via international wire transfer or through a licensed remittance service to their UAE corporate account. Once the account is open and funded, all subsequent transactions run through the UAE banking system normally. Having a UAE company and residence visa also makes it straightforward to manage your banking needs across multiple jurisdictions.

One structural advantage worth noting: the AED is pegged to the US dollar. Owning equity in an AED-denominated company is a direct hedge for founders whose home-currency savings are subject to depreciation. Alsama's advisors can walk you through how this fits your specific financial picture.