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A Limited Liability Company (LLC) is one of the most preferred business structures selected by foreign investors who wish to do business on a permanent basis in UAE. A LLC is restricted to a minimum of two and a maximum of fifty shareholders and is flexible in terms of management structure and allocation of profits.
The minimum share capital requirement for a LLC in Abu Dhabi, UAE was fixed at AED 300,000 or [approx. US$ 80,000]. However, as per the amendment in the UAE Company Law, the minimum capital requirement has been abolished and the share capital of the LLC can be fixed depending on each business’ individual requirements. The UAE national must own at least 51% of the share capital, on paper.
An appropriate Management Agreement/ Side Agreement is required to be executed between the expatriate partner and the UAE national which endeavours to best the beneficial ownership of the shareholding, as well as profit entitlements of the local UAE party in the foreign shareholders. However, it is pertinent to note that this agreement cannot be notarized in UAE.
Additionally, control of the LLC can be vested in managers, of which there must be at least one but not more than five. The appointment and powers of a manager can also be specified pursuant to the Memorandum of Association. There is no restriction on the nationality of a manager, and they can be given an unfettered ability to operate and conduct the affairs of the LLC.