Type of Mainland Company Formation
Mainland company structure can take various forms in the UAE. The types of business structures that a company can adopt are listed in the Commercial Companies Act. The common forms include
- Limited Liability Company (LLC)
A limited liability company is one that contains two or more shareholders, each of whom is liable only to the extent of their share in the capital. According to the Commercial Companies Act, LLC’s can conduct a range of business activities within the UAE, including commercial, industrial, and banking activities.
A branch office is an extension of a local or international company. A Branch allows the company to expand operational procedures but being the same legal entity as the parent company; it cannot expand its business activities. Branch companies obtain their operating license from the Department of Economic Development.
- Sole proprietorship
A sole proprietorship is owned 100% by an individual, and the license is issued in their name. A sole proprietorship practices professional services that are skills-based.
- Public Joint-stock company
A public joint-stock company is one whose capital is divided into equal and negotiable shares with a minimum of AED 10,000,000. A public joint-stock company can offer shares to the public and governmental bodies.
- Private joint-stock company
A private joint-stock company is a private shareholding company with a minimum partnership of AED 2,000,000 and a minimum of three partners. This type of company can undertake a range of commercial and industrial activities. As stated by the Commercial Companies Act, Private joint-stock companies cannot give up their share to government bodies.
- Civil company
A civil company consists of two or more individuals carrying out professional activities. Such activities are based on educational qualification and skill. The list of activities includes medical practice, consultancy services and accounting firms. A civil company is issued a license by The Department of Economic Development and can be 100% owned by foreigners.