Procedures of Company Formation in the UAE

Firstly, it is important to identify the nature of your business activity. This will determine the type of license required as the legal form for your company. There are six types of licenses: professional license, tourism license, commercial license, industrial license, crafts license, and agriculture license.

It is possible to include business activities within a license. Secondly, you need to determine the form that best suits your business requirements. This decision will depend on legislation and regulations that apply.

The UAE offers options for forms including partnership, limited liability company (LLC) public joint stock company (PJSC) limited partnership, a branch of a foreign company, and private joint stock company (PJSC). It's important to ensure that the chosen legal form aligns with both the economic activity and regulations specific to each emirate.

Lastly, it is necessary to reserve and register a trade name for your business. The trade name distinguishes your entity from others in order to avoid confusion, among customers. The choice of a business name must be related to the type of license required. You can register your business name with the Department of Economic Development, in each Emirate.

The legal form of your company should align with its trade name. The trade name itself should accurately reflect the activity being carried out, and should not include references to Almighty Allah, government authorities, third-party names, or logos. Approval from the Department of Economic Development is mandatory for the trade name while trademark approval from the Ministry of Economy is also necessary.

Additionally, an application for approval must be submitted to demonstrate that the UAE Government has no objection to establishing your entity and to determine the steps in obtaining a commercial license. However, this does not grant authorization to commence business operations.

Foreign investors need approval from the General Directorate of Residency and Foreigners Affairs before obtaining approval. Certain activities may require approval from government authorities associated with those activities, such, as legal affairs or security organizations regulated by the Commodity and Securities Authority.

Lastly, depending on your company's structure, you may need to draft and sign a memorandum of association. A memorandum of association is required for entities such, as partnerships, private joint stock companies, limited partnerships, public joint stock companies, and limited liability companies.

The sixth requirement involves choosing a location for conducting activities. Since all companies need an address to carry out activities, the address and commercial building must meet the requirements set by the Department of Economic Development in each Emirate and comply with zoning regulations enforced by competent authorities or municipalities.

Additionally, a lease contract for a warehouse or office space is necessary. In some cases, additional government approvals may be required for licensed activities. Some examples of activities include engineering services that require approvals from the relevant Municipality Department in each Emirate public services that need approvals from executive councils, tourism, and travel agencies, shipping and marine agencies as well as health-related activities that require approvals from the Health Authority, in the respective Emirate.

Written by:

Abdul Wahied Mohammad Sharief | Dar Al Haqooq Legal Consultancy​