The UAE offers different corporate structures, ranging from sole proprietorships to public companies. When deciding which structure is suitable for your business, you have to consider various factors, such as the number and nationalities of owners, the nature of business, the type of license required for the particular activity, etc.

Before we outline the main business structures, it is important to understand the following:

  • Professional licenses are granted to individuals and businesses that conduct professional or service-based activities, such as consulting or public relations.
  • Commercial licenses are issued for different types of commercial activities, such as trading and retail sales.
  • Industrial licenses are issued for manufacturing and industry-related activities.

Most company structures in the UAE mainland require some element of local ownership or involvement. In a limited liability company (LLC), for instance, at least 51 percent of the business should be owned by UAE national/s, known as local partner/s.

Meanwhile, sole establishments operating on a professional license can have 100 percent foreign ownership as long as a local service agent is appointed. Unlike a local partner, this agent has no ownership rights but is paid an annual fee to manage licensing, visas and other government-related activities.

UAE free zones also offer options to incorporate as establishments, limited liability companies, branches, representative offices and offshore companies.

Company type (mainland)

[Related: Partnering with a local sponsor]

Type Ownership + licenses Number of owners/ shareholders Note Example
Sole Proprietorship
  • Professional license: 100% ownership allowed for all nationalities; local service agent required for non-UAE/ GCC nationals.
  • Commercial/ industrial license: Only UAE or GCC nationals allowed; local service agent not required.
 1 Owner can be accountable to the extent of his/ her personal assets for the company’s liabilities. La Poupee Comestics Trading Establishment
Civil Company
  • Professional license: 100% ownership allowed for all nationalities; local service agent required for non UAE/ GCC nationals.
 2 or more For engineering civil companies, one UAE national partner is required (51% ownership). Afridi & Angell (legal consultants)
Limited Liability Company
  • All nationalities allowed.
  • For non-GCC/UAE nationals, at least 51% ownership by a local (UAE national) partner is required.
  • 49% foreign ownership allowed.
 2 to 50
  • Most commonly used by expatriates.
  • Liability limited to the extent of the partners’ share in the capital.
 Sharaf DG
Public Shareholding/ Joint-Stock Company
  • Majority UAE nationals.
  • Board chairperson must be a UAE national.
 At least 10 founding members, owning 20% – 40% shares
  • Shares can be offered for public subscription.
  • Liability limited to the extent of share in the capital.
 Emaar Properties PJSC
Private Shareholding/  Joint-Stock Company Commercial and industrial licenses. Professional license not allowed. Only UAE/ GCC nationals. Foreign partners allowed as long as UAE national partners own at least 51%. 3 or more Shares cannot be offered to the public. Liability limited to the extent of share in the capital. Manazel Real Estate
Simple Limited Partnership UAE nationals as general partners with unlimited liability. Other nationalities as limited partners with limited liability. 2 or more At least one general and limited partner. Orient Financial Brokers
General Partnership Only UAE nationals. 2 or more Liability extends to personal assets of partners. Mohd. & Sultan Ahmed Lootah Contracting Co
Branch of a foreign/ UAE/ GCC/ free zone company or representative office 100% ownership by the parent company. Local service agent often required  * No separate legal identity from the parent company. Brookfield Multiplex

* Parent company is the owner of the branch – so technically no individual owner.

Company type (free zone)

[Related: Finding the right UAE free zones]

Type Ownership No. of owners Notes Example
Free Zone LLC/ Company 100% ownership. 2 or more Liability limited to the extent of the partners’ share in capital. Active FZ-LLC 
Free Zone Establishment 100% ownership. 1 Liability limited to the extent of the owner’s share in capital. BR Communications FZE
Branch/ Representative Office 100% ownership by the parent company. * A legal entity of the parent company. LinkedIn Middle East FZ-LLC

* Parent company is the owner of the branch – so technically no individual owner.

Foreign structures not available in UAE

The UAE doesn’t directly offer ‘S’ and ‘C’ corporation models that exist in markets such as the US. These often differ from LLCs in terms of structure and taxation requirements, among other factors.

A ‘C’ corporation is a structure where the company is a separate entity from the owner (so there is limited liability) and the company is taxed separately. ‘S’ corporations offers some tax benefits, in that the company is not taxed separately (even though there is limited liability). Shareholders/ owners get taxed on their individual returns after the profits have passed through from the company.