Civil/Professional Company Formation in the UAE

Just like humans have different shapes and sizes, companies also vary structure-wise. You are required to pick one to proceed with the company formation process. It is important that you decide the legal form for your business that squarely fits into your requirements and objectives.

Understand the Concept of Civil Company in UAE

You have a broad spectrum of choices when it comes to company formation in Dubai or any other emirate of the United Arab Emirates as well. One of them is the Civil Establishment, also called a Professional Company. It can be established by only professionally skilled individuals, such as doctors, lawyers, engineers, web designers, carpenters, etc., to deliver professional activities to society to generate income. This simply means that this kind of company structure has been designed for certified and authorized professionals in various specialized fields, including law, accounting, medical, engineering, fashion designing, and more. Such company types can be incorporated in both free zone as well as mainland territories of the UAE.

Civil Company Vs. Sole Establishment in UAE

In UAE, a Civil company is a business entity owned and managed by one or more natural persons, also known as individuals. A sole establishment, on the other hand, is a business entity owned and managed by a single individual. There are some critical differences between a Civil company and a sole establishment in Dubai:

Ownership: A Civil company can be owned by one or more natural persons, while a single individual owns a sole establishment.
Management: A Civil company is managed by its owners, who are referred to as partners. A sole establishment is managed by the owner, who is also the sole proprietor.
Liability: In a Civil company, the partners are personally liable for the debts and obligations of the company. In a sole establishment, the owner is personally liable for the debts and obligations of the business.
Registration: Civil companies and Sole Establishments must be registered with the Dubai Department of Economic Development.

Advantages of Civil Company Formation in UAE

The founder of a Civil company in UAE is required to obtain a specific license depending on the sort of activity they want to do in a certain industry or region. A Civil Company license in UAE lets you enjoy dozens of benefits. Some of the key benefits of incorporating a Civil company in Dubai or any other emirate of the UAE include the following:

Exclusively designed for professionals
A corporate bank account can be started easily and instantly with a Professional license
Dependants can be sponsored easily
Allows business owners to apply for multiple visas (100 sq. ft. office space per visa)
No local or corporate sponsor as partner is required but must appoint a Local Service Agent
The total setup cost is exceptionally low
Simplest business legal form
100% business ownership permitted to non-UAE individuals or foreign corporate bodies
Easy and effortless company formation
Multiple visa applications permitted
More than one shareholder
Full capital repatriation
No currency restrictions
No personal income taxes
VAT & Corporate Taxes are applicable only on crossing a certain threshold
Adequate availability of labor and energy supply

Essential Features of the Civil Companies in UAE

Individuals of any nationality can conduct professional activities under a valid Civil business license, provided they are professionally certified and authorized to carry out the specialized activities.
Civil company owners may also alter their legal structure in accordance with DED.
The trade name under which the Civil company will operate in UAE must be unique, appropriate, and in line with the country’s trade name guidelines. The chosen name also should be aligned with the firm’s business activity.
In UAE, a Civil business could have several branches. Each branch may carry out some or all of the tasks specified in the primary business license.
Not just complete ownership but a Civil company owner/shareholder is entitled to 100% liability of the company as well.
A Civil company is required to appoint a Local Service Agent (aka Wakeel Khidmaat) to represent the business for various government approvals like visas and work permits. The LSA must be a UAE National or UAE company 100% owned by UAE nationals.
Trading activities can’t be performed with a professional or Civil company license.
A UAE Civil company shareholder can sponsor their employees for residence visas.
Civil company owners can apply for multiple visas, depending on the size of the office space (100 sq. ft. of office space per visa). However, this may be negotiated with the Department of Economic Development (DED).
A Civil company setup in UAE requires at least 2 shareholders and can go up to 50, which can be both individuals or corporate companies.
There is no minimum requirement for business capital to set up a Civil company in Dubai, UAE.
The founder of the Civil Company must get a detailed Civil Agreement between expat partners of the trade license.
Civil firms cannot appoint managers beyond a specified limit.
The name of such companies should reflect the licensed commercial activities and be consistent with them.

Types of Business Entities Offered in the UAE

No business has similar needs and hence they require a unique structure to incorporate. The business-friendly UAE offers a wide range of legal forms to start a business in Dubai and helps companies snowball.

Sole Establishment

General partnership

Limited partnership

Limited liability company (LLC)

Public joint stock company (PJSC)

Private joint stock company (PrJSC)

Civil company

Local company branch

GCC company branch

Foreign company branch

Free zone company branch

Holding companies

Types of Business Entities Offered in the UAE

Sole Establishment

General partnership

Limited partnership

Limited liability company (LLC)

Public joint stock company (PJSC)

Private joint stock company (PrJSC)

Civil company

Local company branch

GCC company branch

Foreign company branch

Free zone company branch

Holding companies

The Process of Civil Company Formation in Dubai

Civil company formation in Dubai is a simple process. Just a few steps, and there you go. Here is your step-by-step guide to obtaining a Civil company license in Dubai, which is the fundamental requirement of setting up the company.

First thing first, select the economic activity and decide on a unique name for your Civil Company formation in Dubai that is in line with the UAE-specific trade name guidelines.
Have the trade name approved by the Dubai Department of Economic Development (DED) and obtain initial approval (along with the trade name registration certificate)
The next step is to have a Partnership Agreement drafted stating the responsibilities and scope of powers of the company and those within it. The document must be duly attested.
Prepare an LSA Agreement (if applicable) outlining the appointed LSA’s responsibilities and annual fee and have it notarized just like the Partnership Agreement.
Find a suitable business location for your Civil Company setup in Dubai, lease an office space and obtain the RERA-registered tenancy contract (aka EJARI) from the property owner as a part of the license application documentation.
Request additional approvals from various government entities if necessary for trade license issuance
After you have all the necessary business setup documents in place, submit them along with the license application filled with the required details to DED. The payment voucher will be generated upon final submission with a 30 days deadline to pay the application fee.
The last step is, of course, making the payments and collecting the license so you can legally run your Civil company in Dubai, UAE.

Required Documents for Civil Company Formation in Dubai

Proof of trade name registration
Initial permission application form signed by a UAE National (Local service agent) and international partners
Duly prepared and notarized (at Notary public) Partnership Agreement and Local Service Agreement (LSA). Telephone numbers and physical addresses are required as well
Passport copies of all the partners (plus LSA’s family card and Zinsia copy)
A notarized partnership contract between international partners stating all the relevant information, including profit-sharing, capital, and ownership details
RERA-registered commercial lease papers
Special approval (if applies to the chosen business activity)

Required Documents for Civil Company Formation in Dubai

Proof of trade name registration
Initial permission application form signed by a UAE National (Local service agent) and international partners
Duly prepared and notarized (at Notary public) Partnership Agreement and Local Service Agreement (LSA). Telephone numbers and physical addresses are required as well
Passport copies of all the partners (plus LSA’s family card and Zinsia copy)
A notarized partnership contract between international partners stating all the relevant information, including profit-sharing, capital, and ownership details
RERA-registered commercial lease papers
Special approval (if applies to the chosen business activity)

Next Steps

Now that you have the trade license, you can complete the activities to become operational. For instance, hiring employees, applying for visas, opening a corporate bank account, various mandatory registration with government entities, and so on. Remember, a business is a non-stop journey. You will be juggling dozens of tasks and responsibilities and taking big-small decisions now and then to not just successfully run your business but also take it to the next level. That’s where the concept of outsourcing comes in and saves you from being on a hamster wheel. And when it comes to handing over your important tasks to a third-party firm, you only want a dependable company that can help you not only during the initial stages of the business setup process but also with your business progress through its various growth stages. One such company is Ingenious Corporate Services in Dubai, UAE. That’s us! We are a full-fledged business setup advisory firm that enjoys doing ordinary tasks in extraordinary ways. Because we believe that setting up a business is no less than a dream, and we handle dreams with care!

Need expert help?

When setting up a business in Dubai or wherever it all comes down to what type of business you want to start in Dubai. Let us reach you if you need clarification on which business structure is right for you. Simply click here and leave the rest to our business setup consultants in Dubai.

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