It is an establishment owned by a sole proprietor to operate an economic activity (commercial, professional, industrial, agricultural or real property). An establishment’s financial liability is linked to the proprietor who shall be responsible for all its financial obligations.
The ownership in UAE resident companies have to be held at least 51% by a UAE National. This implies that an expatriate cannot have 100% ownership in a UAE resident company. However there are certain business activities that are classified as Professional Activites (Business Consultancy, Enginnering Consultancy etc.) for which 100% ownership are allowed to the foreign investors.
Civil Companies are formed to practice business activities that require utilization of intellectual faculties. The shareholders of Civil Companies are professionals who have substantial experience in the profession the company gets licensed to practice. The following are basic details on registering a Civil Company
- A civil Company is each company that undertakes directly a specific profession as its target and partners depend, for their earnings, on the practicing of activities which involve the use or investment of intellectual faculties more than depending on speculation, materials, or others’ work.
- Under Dubai Local Order No. 63 of 1991 on licensing professionals and tradesmen in the Emirate of Dubai, it is allowed for a number of normal individuals to practices a service or professional activity as distinct form, a commercial one, the business takes the form of a “Business Partnership” in accordance with the provisions of the rules (from 683 to 690) of the Federal Civil Dealings Law. Professional companies may be 100% foreign owned. However, it is necessary to appoint a “Local Service Agent”.
- The obligations of the local service agent towards his principal and third parties shall be restricted to render the usual experience in order to enable him to practice the professional or craftsmanship work without holding any responsibility or financial commitment in respect of his principle’s business or activity inside the Emirate or abroad. The relations between the two parties shall be regulated by any agency agreement.