The DED license is allocated to firms and companies to enhance freedom of business operations and transactions. It provides the following and more:
Under the covering of the Dubai Department of Economic Development, the main licensing options are:
(Provision of non-physical services e.g. Consultancy)
- The establishment of business organizations formed under the UAE Civil Code which are restricted to carrying out “non– commercial” or civil activities. The entities under the UAE Civil Code (whether an Individual Establishment or a Civil Works Company) include service promotion and advertisement, skills, and expertise of the individual(s) conducting the business, as well as other related practices that may involve the use or investment of intellectual faculties.
- Foreign nationals and expatriates have the freedom to own 100% of their companies within the borders of Dubai. However, it is necessary to appoint a Dubai citizen who will act as a “Local Service Agent” or “Local Sponsor.”
- In order to fully comply with the provisions of UAE law, we propose that a local partner of BetterStep will act in the capacity of the Local Service Agent. However, the Local Service Agent chosen by the firm will not possess any managerial and constituted authority or financial commitment to the firm. His duty is completely restricted to acting as your representative in order to facilitate the speedy processing of the trade license, visa and any other document that is necessary to complete your trade license and enable you register your business and begin transactions and operations in earnest. The Local Service Agent Appointment Contract will regulate the relationship between the company and the Local Service Agent and contain all commitments and duties that ensue between both parties.
- Depending on the level of business activities, this can be a Limited Liability Company (LLC) if a UAE citizen or indigenous company owns a 51% stake in it. For the latter and when involved in certain business activities, the shareholders of the UAE-based company which acts as a majority shareholder must meet the same criteria as the expatriate partner(s).
- Already established companies can only invest directly in a newly-formed Civil Company if they are seen to clearly reflect the same business activity and show concrete proof of similarity to the parent company.
(Provision of physical services or trading activities)
- The establishment of a Limited Liability Company (LLC) in Dubai must completely be in accordance with the Commercial Companies Law. This is the law that is adhered t the most and fully applies to foreign-owned firms and companies who are wishing to expand their business operations and conduct commercial activities and trade in the UAE
- Every individual partner will only be liable to the extent of their share capital in the company upon establishment as stated in the executed Memorandum of Agreement (MOA).
- As provided by the UAE Companies’ Law, a UAE citizen (henceforth know as the Local Partner) must own no less that 51% of the business and the foreign shareholder is entitled to a maximum of 49% business ownership. However, the law also makes provision for the issuance of constitutional documents for an LLC to contain clauses and terms that serve to protect the interests of the minority foreign shareholder, including but not limited to the allocation and distribution of made profits, the entitlements of assets, the appointment of directors, managers and board members, the issuance of administrative powers and overall influence in making major business-related decisions.
- To comply with the provisions of the UAE Companies’ Law, we advise that you adhere to BetterStep General Trading recommendations, consider our recommended UAE citizen and appoint him (or her) as your Local Partner.
Branch or Representative Office
- It is clearly provided under the UAE Companies’ Law that foreign nationals and expatriates can own the totality of their companies, provided that a local service agent is appointed.
- A Branch office is recognized as a legal extension of the parent company and is permitted in its capacity as a subsidiary by law to secure contracts and conduct business activities, which are similar in structure and fashion to those of its parents company. However, these transactions, contracts and other business activities are subject to the approval and ratification of the UAE Ministry of Economy.
- A Representative office is established to promote the products and services of its parent company. However, it is prohibited from carrying out any trading activity or enter into commercial transactions and deals by itself as a separate business entity. Also, it is restricted to a maximum of 4 employees.