The legal structure of business entities is divided into three parts, which are as follows:

  • Commercial Companies
  • Civil Companies
  • Free Zone Entities


No matter which business is being opened, it is mandatory to obtain a license. These are as follows:

  • Commercial License valid for all sorts of trading
  • Industrial License valid for Manufacturing or Industrial
  • Professional License which covers Professions, Services, and Craftsmen

Legal Forms of Businesses

Commercial companies:

1) Sole Proprietorship

This form of business broadly covers different professions, such as owning a restaurant or heading a consultancy firm. It requires a Local Service Agent (LSA) is held by a foreign national other than the GCC countries. The LSA has to be a UAE National who will handle licensing requirements and matters related to the business for which he/she is paid an annual fee. The firm has to be owned by an individual and not a company. The owner is entitled to complete ownership of the business and control of all the operations. The owner owns all profits.

2). General Partnership

A minimum of two UAE nationals owns it. UAE Nationals and expatriates can also hold it.

3) Limited Liability Company

A Limited Liability Company may have as many as 50 shareholders, who are given part as per the extent of share ownership in the company. This business is authorized to engage in all industrial and commercial businesses.

4). Foreign Company Branch or Representative Office (Outside of Free Zone)

By opening a branch office of the parent business, 100% ownership can be availed. Such a business is entitled to be considered a part of its parent company. It holds no separate legal identity.

5). Public Joint Stock Company

It is mandatory to run operations of banking, insurance, or financial activities as public shareholding companies. The foreign banks, insurance, and commercial companies have the opportunity to have a presence in Dubai through a branch office.

6). Private Shareholding Company

Such companies are opened for commercial or industrial business, but professional activities are barred. All rules and regulations applicable to Public Joint Stock Companies are also applied to this business. However, the company is exempt from laws and regulations of public share subscription. Such a company can be formed by three or more UAE Nationals or GCC Nationals.

Civil Companies

The Civil companies are divided into the following categories:

  • Service Companies
  • Speculative Venture Partnership
  • Mudaraba Companies

Free Zone Entities


There are many Free Zones in the country, with the majority being in Dubai. Foreign companies have been allowed to form branches in these Free Zones. They are exempted from the condition of appointing an LSA. These zones have their laws, rules, regulations, and requirements. These do not fall under the ambit of the Federal Companies Law. It implies that no involvement of a UAE national shareholder is required.

For further details and to open up a business, avail legal guidelines on corporate structure from one of the best corporate structure law firm in Dubai.