LLC Company Formation in UAE 2025 – Costs, Rules & Ownership Guide

How an LLC Company Works (Structure, management, and liability distribution)

An LLC in the UAE  may be owned by partners and run by a manager, with liability limited to each partner’s capital share.

You can form an LLC with 1 to 50 shareholders. Ownership is flexible, natural persons and legal entities (companies) can both be partners. Shares determine each partner’s ownership and liability.

Management is typically delegated to a General Manager, appointed by the Memorandum of Association (MoA). The manager handles day-to-day decisions, signs contracts, and represents the company legally. Partners may also reserve key decisions for themselves, depending on the MoA.

Profit distribution is usually proportional to shareholding. But UAE law allows different profit splits if agreed in writing.

Liability is limited. Partners are only responsible for losses up to the amount of capital they invested. Their personal assets are protected.

Annual audits are required for most LLCs. You must also maintain accurate financial records, renew the trade license each year, and comply with VAT and corporate tax rules.

One Person Company LLC (New rules and differences from multi-partner LLCs)

A One Person Company LLC allows full ownership by a single individual or legal entity under UAE law.

This option became available after the 2021 amendment to the UAE Commercial Companies Law. It eliminated the two-partner minimum, allowing entrepreneurs to register an LLC alone.

A One Person Company LLC follows the same legal structure as a standard LLC, including limited liability, MoA, and manager appointment.

What’s different?

• Only one shareholder is listed (individual or corporate)
• The owner has full control over management and profit decisions

It’s ideal for freelancers, consultants, and solo traders who want legal separation between personal and business assets

Requirements and Documents for LLC Company Formation

To set up an LLC in the UAE, you need business approvals, a physical office, and verified legal documents.

Start by confirming that your chosen business activity is allowed under UAE law. Most sectors now allow 100% foreign ownership, but some still require local partners. Activities involving defense, legal services, or oil often fall into this restricted category.

You must also meet structural requirements. That includes having 1 to 50 shareholders, appointing a manager, and leasing physical office space. LLCs cannot use virtual offices.

Once your eligibility is confirmed, apply for initial approvals through the Department of Economic Development (DED) or your free zone authority.

Here are the required documents for company registration:

• Passport copies of all shareholders and the appointed manager
• Trade name reservation certificate
• Initial approval for the selected business activity
• Notarized and signed Memorandum of Association (MoA)
• Lease contract with Ejari (or zone equivalent)
• No Objection Certificate (NOC), if applicable
• Approvals from regulatory bodies for specific sectors (e.g. healthcare, media, food)
• Attested documents for corporate shareholders (such as board resolution and certificate of incorporation)

All documents must be in Arabic or legally translated. Some free zones may request a business plan or financial references.

Once submitted and approved, you’ll receive your trade license, Chamber of Commerce certificate (if required), and company registration number.

Regulatory Authorities for LLC Setup

Mainland LLCs are licensed by each emirate’s DED, while the Ministry of Economy oversees federal company registration.

If you’re setting up a mainland LLC, your licensing authority is the Department of Economic Development (DED) in your chosen emirate. Here’s who handles it:

• Dubai: Department of Economic Development (DED)
• Abu Dhabi: Abu Dhabi Department of Economic Development (ADDED)
• Sharjah: Sharjah Economic Development Department (SEDD)
• Ras Al Khaimah: RAK Department of Economic Development (RAK DED)

Each DED manages:

• Trade name approval
• Initial and final licensing
• Office space validation (Ejari or equivalent)
• Annual license renewals and penalties

For free zone LLCs, each zone acts as its own licensing authority. Common examples include:

• DMCC (Dubai Multi Commodities Centre)
• JAFZA (Jebel Ali Free Zone)
• RAKEZ (Ras Al Khaimah Economic Zone)
• SHAMS, KIZAD, and others

At the federal level, the Ministry of Economy handles:

• Memorandum of Association (MoA) registration
• Maintenance of national business records
• Oversight of Economic Substance compliance

Some regulated industries, such as education, healthcare, media, or financial services, may also require clearance from sector-specific regulators (e.g. KHDA, TRA, DHA, Central Bank).

Law Governing LLC Company Formation in Dubai

LLCs in Dubai operate under the UAE Commercial Companies Law, Federal Decree Law No. 32 of 2021.

This law defines how LLCs are created, structured, and managed. Articles 71 to 104 specifically govern Limited Liability Companies. Key points include:

• 1 to 50 shareholders allowed
• Limited liability for each partner
• Flexible profit distribution if agreed in the MoA
• Rules for appointing and removing managers
• Guidelines for shareholder meetings, voting, and transfers of ownership

The 2021 legal amendment also removed the requirement for UAE national ownership in most sectors, allowing 100% foreign ownership for eligible activities.

This law applies to all seven emirates and is enforced by each emirate’s Department of Economic Development (DED).

Key Features of an LLC Company in the UAE

LLCs offer full UAE market access, limited liability, flexible ownership, and multi-activity licensing.

The LLC remains the most popular company type in the UAE mainland because it gives foreign investors control, legal security, and operational flexibility.

Here are the core features:

• UAE market access: Mainland LLCs can trade directly anywhere in the UAE without an agent.
• Limited liability: Owners are only liable for their share of capital. Personal assets are protected.
• 1 to 50 shareholders: The law allows both individual and corporate partners.
• Most LLCs now allow 100% foreign ownership under the UAE Commercial Companies Law. See full rules here.
• No minimum capital: Most business activities no longer require proof of capital deposit.
• Physical presence: LLCs must lease office space (Ejari or equivalent).
• Multi-activity licensing: You can combine multiple commercial or professional activities under one license.
• Banking access: LLCs can open corporate accounts in UAE banks.
• Repatriation of profits: No restrictions on sending profits abroad.

Ownership for an LLC Company (Foreign ownership rules in 2025)

In 2025, most LLCs in the UAE allow 100% foreign ownership with no need for a local partner.

This rule came into effect after the Federal Decree Law No. 32 of 2021, which removed the UAE national shareholding requirement for many commercial and professional activities.

As a result, expats and foreign companies can now fully own LLCs in sectors like:

• Consulting
• E-commerce
• General trading
• Real estate brokerage
• IT and software services
• Manufacturing (in most cases)
• Logistics and transport

Some activities are still restricted and require local shareholding or special licensing. Each emirate has a list of these strategic activities. Before setting up, check the activity code with the DED or your selected free zone. For unrestricted activities, no local service agent is needed, allowing full ownership and control of the business.

These include:

• Defense and military equipment
• Oil and gas exploration
• Security services
• Legal practice
• Insurance and banking

LLC License Cost in Dubai (Breakdown of fees, hidden charges)

In 2025, forming an LLC in Dubai costs between AED 15,990 and AED 40,000, depending on activity, office, and visas.

Comparison of Costs Across Emirates (Abu Dhabi, Sharjah, RAK, others)

LLC setup costs vary by emirate, with Dubai on the higher end and RAK among the lowest.

Here’s how license fees compare across key locations:

Key differences:

• Dubai and Abu Dhabi offer more exposure and client access but come with higher lease and compliance costs.
• Sharjah, RAK, and Ajman appeal to startups due to their affordability and faster licensing timelines.
• Free zones may waive office requirements, but restrict mainland trade.

Costs exclude office rent, visas, and optional services like PRO support or legal drafting.

Which Types of Business Are Best Suited for an LLC Setup in Dubai?

An LLC is best for businesses that need UAE market access, multiple visas, and a physical office.

This includes companies that trade, serve clients in person, or hire staff locally. Here are common business types that work well with an LLC structure in Dubai:

• Retail shops and physical stores — You can lease space in malls or street-level units and trade legally across the UAE.
• Import/export and trading companies — LLCs can bring goods into the country and sell to wholesalers, distributors, or end customers.
• Construction and contracting firms — You need an LLC to bid on public projects or work on construction sites in Dubai.
• Business consultancies — Local market consultants, training providers, and service firms use LLCs to work with UAE-based clients.
• Logistics and warehousing providers — These require physical space and regulatory approvals best handled via an LLC.

If your goal is to serve the UAE mainland market, hire staff, and grow locally, an LLC is the correct choice.

Know more about UAE Business setup

Difference Between Mainland LLC and Free Zone LLC (FZ LLC)

A mainland LLC can trade across the UAE directly, while a free zone LLC is limited to inside its zone or exports.

Here’s a side-by-side comparison:

Mainland LLCs suit businesses with physical clients, staff, or locations in the UAE. Free zone LLCs are better for export-focused, online, or remote-service models.

LLC in Abu Dhabi (Unique features, ownership rules)

Abu Dhabi offers cost-effective LLC formation with access to government contracts and full foreign ownership.

The Abu Dhabi Department of Economic Development (ADDED) handles LLC licensing in the emirate. Most activities allow 100% foreign ownership under federal rules.

Abu Dhabi encourages investment in:

• Renewable energy (Masdar City)
• Advanced manufacturing
• Financial services (through ADGM)
• Logistics and industrial operations

LLC formation costs in Abu Dhabi are often lower than Dubai, and office space is more available. You can lease in mainland areas or economic zones like KEZAD for industrial activity.

LLCs in Abu Dhabi enjoy strong government incentives, including fee waivers for select sectors and fast-track business registration under “Tajer Abu Dhabi” for eligible small businesses.

LLC Setup in Sharjah

Sharjah LLCs offer low setup costs, industrial access, and full foreign ownership for most sectors.

The licensing body is the Sharjah Economic Development Department (SEDD). It handles trade name reservation, license issuance, and activity approvals.

Sharjah is ideal for businesses in:

• Manufacturing and light industry — With access to industrial zones and proximity to Port Khalid and Hamriyah Port.
• Education and publishing — The emirate supports cultural and academic ventures.
• Wholesale trading and warehousing — Rent and storage costs are lower than in Dubai.

Office space is more affordable than in Dubai or Abu Dhabi. Many SMEs and family businesses prefer Sharjah due to low overhead.

Most commercial and professional activities now allow 100% foreign ownership, in line with the updated UAE Commercial Companies Law.

LLC Setup in Ras Al Khaimah (RAK)

RAK offers fast LLC registration, low costs, and flexible business regulations.

The RAK Department of Economic Development (RAK DED) handles licensing for mainland LLCs. For free zone options, RAKEZ is the primary authority, offering both mainland and free zone models.

RAK is a top choice for:

• Trading and import-export businesses — Easy access to seaports and customs
• Consultancies and freelancers — Affordable license packages
• Manufacturers and warehouses — Large plots, cheap land, and lower utility rates

LLC formation in RAK is often 20–30% cheaper than in Dubai. Setup is streamlined, with minimal bureaucracy and quick approvals. Most activities now permit 100% foreign ownership.

The emirate also offers startup-friendly incentives, such as reduced license fees, low visa costs, and simplified lease options.

Other Emirates (Ajman, Fujairah, Umm Al Quwain)

Ajman, Fujairah, and UAQ offer fast, affordable LLC setup with access to niche industries and less competition.

Each emirate has its own Department of Economic Development to handle LLC licensing:

• Ajman DED — Ideal for logistics, small trade, and general services
• Fujairah DED — Popular for maritime, oil storage, and industrial services
• Umm Al Quwain DED — Attractive for startups due to low overhead

Advantages across these emirates include:

• Lower office rent and utility costs
• Quick license issuance — often within 3–5 working days
• Fewer procedural delays or document requests
• 100% foreign ownership for most activities

Fujairah also has port access and supports heavy industry. Ajman and UAQ cater to micro-businesses, especially in services and e-commerce.

These emirates are a smart fit for entrepreneurs who want a mainland license but with a lean setup.

Key Legal Obligations for LLC Owners

LLC owners must keep their company’s legal documents valid, maintain accounting records, and follow UAE tax laws.

Here’s what you are legally required to do as an LLC shareholder or manager:

• Maintain a valid MoA: If your ownership structure or business activity changes, you must amend and re-notarize the Memorandum of Association (MoA).
• Keep lease active: Your trade license is tied to your office lease (Ejari or equivalent).
• Track all financial records: UAE law requires you to keep accounting records for at least 5 years. This includes invoices, receipts, and payroll.
• Conduct annual audits: Most LLCs must appoint an auditor and submit audited financials yearly.
• Comply with tax laws: File for VAT if eligible, and pay corporate tax if your profit exceeds AED 375,000.
• Renew your trade license annually: Failing to renew can result in blacklisting or fines from the DED.

These obligations apply to both mainland and free zone LLCs unless the zone provides an exemption.

Start Your LLC Company in UAE with Juriszone

Juriszone manages all licensing steps to help you establish your LLC in the UAE with complete clarity.

Whether you’re launching in Dubai, Abu Dhabi, or a free zone, our team takes care of everything needed to go from idea to active license.

Our services include:

• Trade name reservation
• Legal drafting of the Memorandum of Association (MoA)
• License application and activity selection
• Office lease and Ejari coordination
• Visa processing for partners and employees
• UAE bank account support
• Compliance with tax, ESR, and reporting laws

Also read about types of business structures in UAE