To form a Limited Liability LLC. Company in Dubai as a local or foreign investor, it is crucial to consider the respective pros and cons of this type of company and how it will affect your business setup in the UAE. One significant advantage of LLC company formation in Dubai is that it offers investors the opportunity to do business in any Emirate within the confinement of the country, but is that all? Definitely No!
Investors must consider the pros and cons attached to each business decision they want to make and the effect it will have in the long-term.
All LLC company (considered as a mainland option) in Dubai has to be registered with the Department of Economic Development in Dubai where all the processes of company incorporation will be carried out according to the Commercial Capital law of the UAE.
From my several years of experience working as a company setup consultant in Dubai, below I will highlight the major concerns for investors as regards the benefits and disadvantages that are posed by the formation of an LLC company in Dubai.
Pros/Advantages of setting up a Limited Liability company in Dubai
Now, let’s highlight the features that set LLC company different from its counterpart which is the freezone company formation.
- No restriction on Trade location
The government of UAE allows LLC business investors to set-up their business anywhere within the Emirates without no limitation. Therefore, if you form an LLC company in Dubai, you’ll enjoy this fantastic benefit which allows you to set-up branches anywhere, rental freedom which enables you to rent offices and real estate properties without having to bother about its location.
- Freedom to do any business
Having an LLC company in Dubai permits you to carry out any business within the UAE except activities that involve insurance, banking or investment. Of course, such a company will also enjoy the freedom of providing their goods and services anywhere within the country.
- Another unique advantage of the LLC company formation in UAE is that the government does not place a benchmark on the minimum capital requirements to set-up your business.
Other pros that investors need to consider is the fact that with an LLC company, there is no restriction on the amount of visa you can obtain for your employees. Another is that the business is formed between a foreign investor and a UAE/Gulf National which is known as a local partner – where the partner has 51% shares of the business while the investor owns 49%; this makes your company more secure and reliable in the market.
Cons/disadvantages of LLC company formation in Dubai
There are two sides to every choice we make, and in this case, just as you will enjoy the multiple benefits of owning an LLC company, you also need to brace up for the disadvantages that might arise as a result of that decision.
Here is a list of the cons attached to a limited liability Company formation in Dubai
- The UAE government in most cases will require you to provide external support to validate your business. You can get this from your home country, and it can cost some money and time.
- Employers will have to renew their employees’ Visa every two years as compared to the three years of freezone companies.
- The time it takes to setup an LLC company in Dubai is generally between 8 to 10 weeks which is quite prolonged than that of free zones.
- You are Liable to tax payment with a Limited Liability Company.
Although company choice depends on what you want to establish, you can also seek the assistance of reliable and experienced business setup consultants in Dubai who will assist you with further information and even in scaling through the process of looking for a local partner.
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