Limited Liability Company (L.L.C)

A Limited Liability Company (L.L.C) is a recognized legal company formation structure in Dubai. The local sponsor will usually hold a 51% stake in your company and you will hold the 49% stake in the company. There are some business activities such as banks or money-exchange firms that require a higher percentage of holding by the local UAE national sponsor and these are dictated by the Dubai authorities from time-to-time.

The role of the Local Sponsor in a Dubai LLC

In a Dubai LLC or Dubai Limited Liability Company a local UAE sponsor is therefore a partner in your business. In technical terms he is a director on your company's board. However, this does not mean that you do not have management control of your Dubai business. There are a lot of businesses in Dubai where the local UAE sponsor plays an active role in the day-to-day running of the business for a percentage of the profits.

Silent Partner

However, a larger portion of Dubai Limited Liability Companies use the local UAE sponsor as a "silent partner." In this arrangement, the local UAE sponsor is usually paid an annual "sponsorship fee" in return for giving up management control of the company to the foreign investor. However, legally, the local UAE sponsor still holds a majority stake in your business.
 
Dubai Professional License

A Dubai Professional License or Dubai Services License is a type of company formation structure in Dubai whereby the foreign investor or foreign owner has 100% ownership of the company. It is compulsory to appoint a local UAE sponsor for this type of company also, with the only exception being that the local UAE sponsor does not own any equity in the company.

Preferred Method with 100% Foreign Ownership

A Dubai Professional License is the preferred method of incorporation for several businesses where the structure of the business and the activity of the business are allowed by the Dubai Government. If you own 100% of your company, it brings security to your investments in Dubai. This type of Dubai company structure and Dubai company formation is limited to only certain business activities.