Civil Company in UAE
Civil Partnership Firm
A civil partnership firm in the UAE is designed for conducting professional or service-related activities. Also known as a professional company, it operates under the UAE Civil Code and is governed by Local Order No. 63 of 1991, which relates to the licensing of craftsmen and professionals in Dubai (later replaced by Law No. 13 of 2011).
Typically formed by two or more individuals, a civil partnership does not offer limited liability to its partners. Instead, partners share joint liability for any debts or losses incurred by the firm, unless otherwise specified in the Civil Partnership Agreement. This agreement must be duly signed before a Dubai Court Notary Public to be legally valid.
In the United Arab Emirates, a civil partnership firm must also appoint a Local Service Agent, who is either a UAE national or a company fully owned by UAE nationals. The Local Service Agent is engaged through a Local Service Agreement and is compensated with an Annual Service Fee. Their responsibilities typically include assisting with the issuance of residence visas, securing work permits for employees, and managing the annual renewal of the Professional License. Importantly, the Local Service Agent does not bear any legal or financial liabilities for the civil partnership.
What is a Civil Company?
Professionals such as doctors, architects, engineers, and lawyers often establish civil companies in Dubai or elsewhere in the UAE. These civil companies are 100% owned by the partners involved. However, certain fields, like engineering services, require at least one partner to be an Emirati or UAE national, holding a minimum of 51% share and possessing relevant qualifications and experience.
A civil company must have a minimum of two partners and can have up to 50 partners. In some sectors, 100% foreign ownership is permitted.
While individual partners can be foreign entities, companies registered in the UAE cannot act as partners in a civil company.
Every civil company on the mainland must appoint a Local Service Agent, who is a UAE national. This agent facilitates interactions with government agencies but does not have any ownership stake in the company. They are compensated for their services through a fee.
Unlike Limited Liability Companies (LLCs), civil companies do not have limited liability. However, they offer flexibility in visa issuance. The number of visas issued is only limited by the available office space, requiring approximately 100 square feet per visa. Additionally, there are constraints on the number of managers a civil company can employ.
Due to these advantages, both professionals and organizations of various sizes opt for civil companies when establishing their presence on the mainland.
If you’re interested in learning more about civil companies and their setup, please contact us. Our experienced company formation experts are ready to assist you with all the information and guidance you need for a successful business establishment.
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