A civil company, also known as a civil establishment, is a partnership formed by two or more people to provide professional services. Doctors, attorneys, engineers, accountants, and consultants are examples of professionals. The proprietors of a civil corporation formed in Dubai can be professional partners of any nationality. If the owner is a national of a country other than the UAE or the GCC, however, a Local Service Agent (LSA) is required to support the license. The duties of a service agent are to provide necessary services to the company. For example, assistance from the Department of Immigration, the Department of Economic Development, and the Ministry of Labour. They have no financial duties or obligations to the company, both within and outside the Emirate. Corporate shareholders are not permitted to own shares in a Dubai Civil Company or a Dubai Civil Company License.
Additional criteria govern shareholding in some operations. For example, one partner in an architectural engineering job must be a UAE national. This national will own at least 51% of the company. Furthermore, this partner should have the necessary qualifications and experience with this task. It is usually a good idea to check with the Department of Economic Development about the required compliance, education qualification, and work experience for the license’s intended activities.
Conditions to Setup a Civil Company in UAE
Choose a Local Partner: Civil enterprises in the UAE must have a local partner who is a UAE national. The local partner must own at least 51% of the company’s shares, with the remaining 49% held by the international partner(s).
Select a Legal Structure: The next step is to select a legal structure for your civil corporation. Common legal structures include a restricted Liability Company (LLC), in which liability is restricted to the company’s assets, and a Civil Company, which is better suited to professional services organizations such as law firms, accounting firms, engineering consultancies, and so on.
Trade Name Registration: You must choose a distinct trade name for your firm and get it approved by the Department of Economic Development (DED) in the emirate where you intend to operate.
Obtain Initial Approval: Submit the required paperwork to the DED or the relevant authority in the local emirate to obtain initial approval for the establishment of your civil company.
Memorandum of Association (MOA): Create a Memorandum of Association (MOA) outlining the company’s objectives, shareholder information, capital structure, and profit and loss distribution.
Office Space and Tenancy Contract: To register your company in the UAE, you will need to lease an office space. The registration process requires a lease contract for the office space.
Obtain Required permits: Depending on the nature of your business, you may require special permits from government agencies or regulatory groups. Professional associations may require permits for professional services.
Register with Authorities: For final registration, submit all required documents, including the MOA, tenancy contract, and license applications, to the DED or the relevant licensing authority.
Open a Bank Account: After registering your company, you can open a corporate bank account in the UAE to conduct business operations.
Visa Processing: You may be required to apply for residency permits for yourself as well as any staff you desire to sponsor. This procedure typically necessitates medical testing and other documents.
Benefits of starting a civil company
Starting a civil corporation can provide numerous advantages, particularly for professionals in service-based industries. Here are some of the benefits of forming a civil company:
Full Business Control: As the owner of a civil corporation, you have complete control over its operations, decision-making, and strategic direction. This liberty enables you to customise your services and offerings to your clients’ individual demands.
Limited Liability: A civil business is generally associated with limited liability in several jurisdictions, including the UAE. This implies that your personal assets are normally insulated from the debts and obligations of the company, limiting your financial risk to the capital you put in the business.
Professional Reputation: Establishing a civil company structure will help you improve your professional reputation and trustworthiness. Clients may see civil enterprises as more established and trustworthy, leading to improved confidence and business opportunities.
Business Flexibility: Civil corporations are well-suited for a wide range of professional service providers, including lawyers, accountants, engineers, architects, consultants, and other professionals. This allows you to provide a variety of services through a single business.
Capability to Partner with UAE Nationals: In jurisdictions such as the UAE, a civil corporation must have a local partner that owns at least 51% of the company. This collaboration gives you access to local knowledge, relationships, and an awareness of the business landscape, which can be useful while working in the UAE market.
Access to Local Markets: Working with a civil firm in the UAE can provide you with access to the local market, allowing you to cater to the demands of UAE-based clients while also potentially tapping into the increasing regional market.
Tax Benefits: In certain countries, civil businesses may benefit from preferential tax status or incentives, resulting in potential tax benefits for business owners.
Potential for Growth: A civil company can attract more clients and extend its operations over time with the correct business plan and service quality. This adaptability enables expansion and higher profitability.
Hire staff: Unlike some other business formats, a civil corporation often permits you to hire staff, allowing you to handle more clients and tasks.
Pooling of Resources and Expertise: By establishing a civil company, professionals with complementary skills can join forces, bringing together their expertise and resources to provide a broader range of services and compete effectively in the market.