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Incorporating a Business

Incorporating a Limited Liability Company

Under the Commercial Companies Law or CCL (Federal Law No. 8 of 1984 Concerning Commercial Companies as amended by Federal Law No 1 of 1984 and Federal Law No 13 of 1988, Federal Law No. 15 of 1998), foreign investors are permitted to hold up to 49 per cent equity ownership in UAE companies, 51 per cent of the equity must be held at all times by one or more UAE nationals.

The Limited Liability Company or LLC is the most popular method of establishing a commercial company in the UAE, unless the business involves banking, insurance and investment activities conducted on behalf of third parties where a Public Joint Stock Company is required. Articles 218 to 255 of the CCL (inclusive) regulate the establishment of limited liability companies. The LLC requires a minimum of two and a maximum of 50 members and minimum capitalization of Dh300,000. Management of the LLC is vested in the 'managers' (up to five natural persons) who may or may not be UAE nationals.

The procedures for establishing an LLC and obtaining a trade licence can be obtained from the Chambers of Commerce of each emirate. There are also a number of efficient law firms in the UAE who can assist you with the process.

Other commercial structures regulated by UAE company law are General Partnerships, Simple Limited Partnerships, Joint Participation, Public Joint Stock Company, Private Joint Stock Company and Partnerships Limited with Shares, most of which, except for the Private and Public Joint Stock Companies, are not readily used.

Establishing a Branch or Representative Office

Under Articles 313 to 316 (inclusive) of the CCL, foreign companies are permitted to establish wholly owned branch and representative offices in the UAE. This business structure reduces the need for national participation.

A branch office, legally regarded as part of its parent company, is a full-fledged business, permitted to perform contracts or conduct other activities as specified in its licence. A branch office may only be engaged in activities similar to those of its parent company and it is not permitted to carry on the business of importing the products of its parent company, a function reserved for local trade agents.

A representative office, on the other hand, is limited to promoting its parent company's activities, i.e. to gathering information and soliciting orders and projects to be performed by the company's head office. Representative offices are also limited in the number of employees that they may sponsor (usually three or four).

A UAE national must be appointed as a 'service agent' for the branch or representative office. A service agent is not the same as a commercial agent. The former is not permitted to own equity in or participate in the substantive management of the representative or branch office. In practice, a foreign entity typically contracts with the service agent to provide specific services such as assisting in communications with government departments or undertaking other administrative matters. The fees paid to the service agent are a contractual matter between the service agent and the foreign company, frequently quantified by the turnover of the branch or representative office.

The procedures for establishing a branch or representative office are relatively simple and are available from the relevant Chambers of Commerce.

Limited Liability Companies - Branch and Representative Offices

Foreign entities wishing to establish a more formal commercial presence in the UAE usually do so by:

• Incorporating a Limited Liability Company (LLC)
• Establishing a Branch office or Representative office
• Establishing a wholly owned entity in one of the UAE Free Trade Zones

By establishing a presence under one of these methods, a foreign entity is permitted to engage in all activities as licensed in the UAE.

Note, however that there is a unique distinction in the UAE between companies established under the Commercial Companies Law and civil companies regulated by the Civil Code. The latter are not companies in the strict legal sense of the word, but civil entities formed as a partnership by UAE nationals or between UAE nationals and non-nationals in order to practice non-commercial activities that involve the investment of intellectual faculties, acquired information or the use of skills such as carpentry.

Visa & Residence

GENERAL INFORMATION

Information concerning visa requirements for those wishing to travel to the UAE has been listed below, however visa reulations and costs are subject to change and should always be checked with you travel agent or nearest UAE embassy before travelling (see Useful Addresses for contact details). Do not overstay your visa as this wll result in detention and fines.

VISAS

VISIT VISA UPDATE 31/03/03

The Cabinet has decided to reduce the visit visa period for citizens of 33 countries who are allowed to enter the UAE without a prior visa to one month non-renewable instead of three months. The Cabinet also decided to impose a charge of Dhs100 per visa to be collected on entry to the UAE through land, seaport and airport entry points.

The decision includes citizens from France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Cyprus, Finland, Malta, Spain, Monaco, Vatican, Iceland, Andorra, San Marino, Liechtenstein, United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia and Hong Kong.

Visit Visa

Citizens of the UK (with right of abode in the UK) will be granted a free of charge visit visa on arrival in the UAE: Passports will be stamped with the visit visa as you pass through Immigration at any airport in the UAE. Although the visa may be stamped for 30 days, it entitles the holder to stay in the country for 60 days and may be renewed once for an additional period of 30 days for a fee of Dh500.

Except for citizens of the Gulf Cooperation Council who do not require a visa and nationalities automatically entitled to visit visas on entry, all other visitors who wish to stay longer than 14 days in the UAE (see Entry Service Permit below) must obtain a visit visa in advance through a sponsor. The sponsor can be your travel agency, your hotel, the company or department with which you are doing business in the UAE, or an individual (eg. a relative or friend resident in the UAE).

You can pick up this visit visa on arrival at the airport, but there is a fee of Dh100 plus a Dh10 delivery charge for this service. In order to complete your application, your sponsor will require your date of arrival, flight details, and a photocopy of the first few pages of your passport, which should be valid for at least three months.

A hotel will only provide a visa if you are a guest. For an individual to sponsor a visit visa, he or she must earn over Dh4000 per month and hold a valid residence visa. Your visit visa must be deposited at airport immigration one hour before the arrival of your flight. Note that your airline may require evidence (e.g. a photocopy) before departure that a valid visa awaits you on arrival.

Please note that holders of British Overseas Citizens Passport who do not have the right of abode in the UK do need visas to enter the UAE.

Tourist Visa

This special category of visit visa is available for individual tourists from East and West Europe who are not entitled to be issued with a visa on arrival, as well as visitors from Thailand, South Africa and China. The tourist visa, which must be sponsored by hotels and tour operators, entitles its holder to a 30-day stay and is non-renewable. The fee is Dh100, with an additional Dh10 for delivery.

Entry Service Permit

An entry service permit (sometimes referred to as a 14-day stay) is available to businessmen and tourists. The permit must be sponsored by a company or commercial establishment or a hotel licensed to operate within the UAE. The visa, which is non-renewable, is valid for 14 days from the date of issue and the duration of stay is 14 days from date of entry, exclusive of arrival and departure days. There is a fee of Dh120 plus Dh10 delivery charge for obtaining an entry service permit. Allow at least two weeks for processing of the permit.

Transit Visa

If you are flying to or from Europe or the United States, to Asia or Africa and passing through UAE airports, you can obtain a special 96-hour transit visa. You must be sponsored by an airline operating in the UAE and you must have a valid ticket for your onward flight. Your travel documents will be stamped with an entry seal and there is no charge for this visa

Multiple Entry Visa

An option for business visitors who are frequent visitors to the UAE and who have a relationship with a reputable company in the UAE. Valid for six months from date of issue, each visit must not exceed 30 days in total. This visa costs Dh1000. The visitor must enter the UAE on a visit visa and obtain the multiple entry visa while in the country.

German citizens (both tourists and business visitors) may apply to the UAE embassy in Germany for one or two year multiple-entry visa. No sponsor is required. The maximum duration of stay should not exceed three months a year. The visa fee is Dh1500.

US citizens may apply to the UAE embassy in the US for one to ten year multiple-entry visas. A sponsor is required and the visa will be granted free of charge. The maximum duration of stay should not exceed six months per visit.

Documents

To obtain a visa from a UAE embassy, you will need the following:

• Passport
• 2 photographs
• Duplicate application form
• Letter or fax from the sponsor in the UAE to the embassy concerned
• A letter from the applicant's company plus photocopy

IMMIGRATION DEPARTMENTS

• Abu Dhabi

  Saeed bin Tahnoon St.

  Abu Dhabi

  Tel: 02 4462244

• Al Ain

  Aditaba Road, near Dubai Islamic Bank, opposite Carrefour supermarket.

  Tel: 03 7625555

• Dubai

  Department of Naturalization and Residency, Trade Centre Road, near Bur Dubai Police Station

  Tel: 04 3980000

• Sharjah

  Department for Naturalization and Residence, near General Post Office

  Tel: 06 5726777

• Umm al-Qaiwain

  Tel: 06 7666419

• Ajman

  Tel: 06 7422255

• Ra's as-Khaimah

  Tel: 07 2273333