Sample contract for establishing a company in Dubai

Establishing a company in Dubai is an important strategic step for entrepreneurs and investors who seek to benefit from the thriving economic environment and advanced infrastructure that the emirate provides. Dubai is considered one of the most prominent business destinations in the world, as it combines a distinguished geographical location with encouraging government facilities that make it an attractive center for international and local business alike. To ensure the success of the company establishment process, preparing a company incorporation contract form in Dubai is one of the basic and pivotal steps. This contract is the legal document that defines the organizational structure of the company, explains the rights and obligations of the partners, and defines the objectives and business activities that will be practiced. In addition, the contract includes details about the management of the company and the distribution of profits and losses among the partners.

In this article, we will review in detail the contents of the company incorporation contract form in Dubai , the terms and conditions that must be included, in addition to the legal procedures required to ratify the contract. This comprehensive guide will provide entrepreneurs and investors with the necessary information to legally and smoothly establish their company in Dubai, paving the way for success and prosperity in the emirate’s dynamic business environment.

Sample contract for establishing a company in Dubai

Contents of the memorandum of association form

The Articles of Association form is considered a basic legal document that plays a pivotal role in organizing and establishing companies in Dubai . This contract includes a set of terms and details that reflect the laws and regulations applicable in the emirate. In this section, we will review the basic contents that must be present in the Articles of Association form.

Basic company information

The first part of the memorandum of association form includes basic company information, which is information that clearly and accurately defines the company. This information usually includes:

1. Company name: The name must be unique and not similar to the names of other existing companies.
2. Type of company: The type of company must be specified, whether it is a limited liability company, a joint-stock company, a joint-stock company, etc.
3. Legal address: The legal address of the company must be determined, which will be its official headquarters in Dubai.
4. Duration of the company: The duration of the company must be determined, whether it is limited to a specific period of time or indefinite.

Partners details

This part deals with the details of the company’s founding partners, and includes:

1. Names of partners: The full names of all partners must be mentioned, whether they are individuals or legal entities.
2. Participation percentage: The participation percentage of each partner in the company’s capital must be clarified.
3. Partner addresses: The full addresses of each partner must be mentioned to ensure effective communication.
4. Legal identities: The legal identities of the partners must be determined (nationality of individuals, or type of legal entity).

Objectives and activities

Defining the objectives and activities that the company will undertake is an essential part of the articles of incorporation form. This paragraph must include:

1. General objectives: The general objectives that the company seeks to achieve must be clarified.
2. Field of activity: The field of activity in which the company will operate must be determined, whether commercial, industrial, service, or otherwise.
3. Specific activities: The specific activities that the company will undertake to achieve its goals must be mentioned.

These are considered the basic contents of the model of articles of incorporation in Dubai, which ensure the clarity and definition of the legal and administrative framework of the company from the beginning, which contributes to avoiding future disputes and ensuring the efficient functioning of the business.

Contract terms and conditions

The terms and conditions of the contract form the backbone of any company incorporation contract in Dubai , as these terms define the legal and regulatory framework within which the company will be managed. These conditions include several important aspects aimed at ensuring the rights and obligations of partners and organizing the company’s work efficiently and fairly. This section is divided into three main points:

1. Rights and obligations of partners: This paragraph specifies the rights and obligations of each partner in the company. The basic rights of partners include the right to participate in strategic decision-making, the right to a share of profits, and the right to access financial and administrative information of the company. On the other hand, the partners’ obligations include the obligation to contribute to the agreed upon capital, the obligation to bear part of the losses, and to actively participate in the management of the company if required.
2. Company management: This paragraph regulates how the company is managed and specifies the administrative responsibilities of each partner or appointed manager. It explains the procedures used in making day-to-day and strategic decisions, and defines the role of the directors or management board in overseeing the day-to-day operations of the company. It also explains the mechanisms used in appointing and dismissing directors or administrative members, in addition to defining their powers and the limits of their responsibilities.
3. Distribution of profits and losses: The method of distributing profits and losses is one of the most important points that must be clarified in the articles of association. This paragraph specifies how profits will be distributed among partners based on their percentage of contribution to the capital or according to certain agreements reached previously. It also explains how losses are distributed and the procedures followed in the event of large losses. These mechanisms aim to ensure justice and transparency between partners, which enhances the stability of the company and motivates partners to work seriously to achieve common success.

Contract ratification procedures

Ratification of company articles of incorporation in Dubai is a vital step to ensure the legality and transparency of business operations. This procedure requires a set of steps and requirements that partners must adhere to to ensure the contract is legally valid and effective. These procedures include the following:

Certification requirements

To ratify the company’s articles of incorporation, some basic requirements must be met to ensure that the legal and legislative conditions in Dubai are met. These requirements include:

• Original contract: An original copy of the company’s articles of incorporation signed by all interested parties must be submitted.
• Personal Documents: Submit copies of passports and residence permits (if partners are non-citizens) in addition to any other required identification documents.
• Approval of the competent authorities: Obtaining initial approvals from the competent government authorities, such as the Department of Economic Development in Dubai.
• Certificates: Provide the necessary certificates and licenses if the company will work in a field that requires special licenses.

Legal steps

Ratifying a company’s articles of incorporation requires following a series of legal steps to ensure that the contract complies with local and international laws. These steps include:

• Submitting the application: Submitting a request to ratify the contract to the Department of Economic Development in Dubai or other concerned authority.
• Review and audit: The competent authority reviews the contract and attached documents to ensure that they meet all legal requirements.
• Payment: Pay the prescribed fees for contract ratification.
• Final ratification: After reviewing and auditing all documents, the contract is finally ratified and approved by the competent authority.

Fees and costs

The fees and costs associated with ratifying a company’s articles of incorporation vary based on the type of company, its size, and its field of activity. These costs include:

• Application submission fees: Initial fees for submitting a contract ratification application.
• Review fees: Additional fees may be charged for reviewing and auditing documents by the competent authorities.
• Certification fees: Final fees for officially certifying and approving the contract.
• Additional costs: These may include additional costs such as fees for legal consultations or obtaining special licenses.

By completing these procedures carefully and carefully, partners can ensure that the company’s articles of incorporation in Dubai comply with all legal requirements, contributing to the establishment of a successful and sustainable company.

Types of companies that can be established in Dubai

Several types of companies can be established in Dubai, common forms include:

1. Limited Liability Company (LLC): It is the most common form among small and medium-sized companies, where capital is distributed among shareholders in specific proportions.
2. Public Joint Stock Company: It is established with the participation of shareholders who bear limited financial responsibility based on their shares in the capital.
3. Sole proprietorship: Owned and managed by one individual, who is solely responsible for all liabilities.
4. Branch of a foreign company: It allows foreign companies to open branches in Dubai to carry out their activities.
5. Company in free zones: Free zones provide the possibility of establishing companies with tax exemptions and ease of ownership for foreigners.
6. Company limited by guarantee: where shareholders’ liability is limited to a specific amount to be paid in the event of bankruptcy.

Basic steps to establish a company in Dubai

Establishing a company in Dubai requires following a set of basic steps to ensure compliance with all local laws and regulations. Here we review the main procedures that must be followed to achieve this goal:

• Choose the company type

The first step in the process of establishing a company is to determine the type of company you want to create. You can choose between local companies, free companies and offshore companies. The investor must choose the type that suits his business activity and strategic goals. For example, free companies offer benefits such as tax exemptions and full foreign ownership, while local companies may be better suited for businesses targeting the local market in Dubai.

• Trade name registration

After choosing the company type, the trade name must be registered. A trade name is the identity by which a company will be recognized in the market. The name must be unique and not used by another company, and must comply with the laws and regulations relating to trade names in Dubai. The availability of the trade name can be verified and registered through the Dubai Department of Economic Development.

• Obtaining the necessary licenses

Work cannot begin without obtaining the necessary licenses and approvals from the competent authorities. Required licenses vary depending on the type of business and location. For example, companies operating in free zones need licenses from the relevant free zone authority, while local companies need licenses from the Department of Economic Development. This usually involves submitting a set of documents, such as a business plan, articles of incorporation, and company rules.

In conclusion, the Dubai company incorporation contract form is an important legal basis for ensuring business success and continuity. By defining basic company information, partner details, goals, and activities, partners can develop a clear, shared vision that achieves desired business goals. The terms and conditions, including the rights and obligations of partners, company management mechanisms, and distribution of profits and losses, provide a legal framework that contributes to avoiding disputes and ensuring the rights of all parties.

Contract ratification procedures are a crucial step to ensure the legality and legitimacy of the contract. By adhering to the legal requirements and necessary steps, partners can obtain official certification that gives the contract the required legal status. Understanding the fees and costs associated with the certification process also helps in sound financial planning and avoiding unexpected surprises.

Based on the above, it can be said that preparing a model contract for establishing a company in Dubai in an accurate and comprehensive manner is a vital investment that contributes to achieving stability and sustainable growth of the business. It is necessary to cooperate with Itqan Company to ensure that all legal and financial aspects are fully covered, which enhances the chances of success and ensures compliance with local laws and regulations.

The most important frequently asked questions about the sample contract for establishing a company in Dubai