ESTABLISHMENT OF A LOCAL COMPANY OR AN OTHER COMMERCIAL ENTITY

Under the Commercial Companies Law (CCL), there are seven forms of commercial entities:

• General partnership
• Simple limited partnership
• Partnership limited by shares
• Point participation (contractual joint venture)
• Limited liability company (LLC)
• Private joint stock company
• Public joint stock company

Every commercial entity must be specifically established. This is neither a simple nor a speedy process. The most common commercial entity used by foreign companies is the Limited Liability Company (LLC). Legal support is advisable as to all aspects of establishing a UAE company or other commercial entity including, for example, its capitalization and level of foreign participation. Foreign participation is generally limited to no more than 49% (although there are contractual ways in which to mitigate the effects of a minority ownership of shares) and general partners in any of the partnerships listed above must be UAE nationals.