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No increase in LLC licence fees

Following the Dubai Economic Development Department (DED) decision to ease the minimum capital requirement for setting up limited liability companies (LLCs)

The department announced that there will be no increase in the licence fees for these entities.

Earlier, the minimum capital required to set up a general trading company under an LLC licence was Dh3 million. This has now been reduced to Dh300, 000. For a contracting company, the minimum capital required was Dh1 million, which has now been reduced to Dh300, 000 as well, said a DED official.

In an exclusive interview with Khaleej Times, Ali Ibrahim Mohammed, Deputy Director-General for Executive Affairs, DED, said that the move to reduce the minimum capital requirement was under consideration for a long time, and the step was taken to encouraging people to set up their businesses here.

“We have not increased the licence fee or the renewal charges for the companies coming under the LLC license, all we have done is change the structure of the activities. So, for instance, if a general trading company dealing with building materials wants to diversify into some other activity, they would have to apply for a new license for the new activity,” Ibrahim explained.

The trade license fee for a general trading company under an LLC category stands at Dh15, 000, while the yearly renewal fee is Dh5000. For a contracting company, the trade license fee is Dh10, 000 while the renewal fee is Dh3, 000. There is no minimum capital requirement to set up a company under andestablishment’ category, where the sole proprietor is a UAE national. In an LLC, on the other hand, a non-UAE national can own up to 49 per cent of the company’s shares.

This particular move, say investors, will encourage many more non-UAE nationals to set up a LLC companies. “This announcement will no doubt encourage people from other parts of the Emirates as well as those outside the country to invest in Dubai. Only today, I received 10 calls from Pakistan from business associates who would like to set up an LLC company over here,” said M. Yousaf, who owns a contracting company in Dubai.

To counter fears of a rise in the incidents of fraud, as the new rules ease restrictions on operating a business in Dubai, Ibrahim said that the opening of a consumer credit bureau in the near future would help greater transparency in business transactions.

“The credit bureaus would definitely allow greater ease in sharing credit information amongst companies as well, thus allowing greater transparency. Dubai is an open economy and there is very little we can do to prevent people from misusing the rules here,” he said.

The deputy director-general said that the DED had witnessed a large number of LLC licence applications in the past three months. “We have completed nearly 352 transactions in the last three months which is an indicator of the people’s interest in setting up their businesses here. With this move, we hope to encourage a lot more people to come forward and conduct their business here.”

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