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Types of investment companies in the Emirates

١١ مارس Types of investment companies in the Emirates

Investing in the United Arab Emirates has now become one of the most important and best investments in the entire world. This is due to the many advantages that the UAE enjoys, which make it the first country for investment. These advantages vary in the types of investment companies in it. However, before we discuss the types of investment companies in the Emirates, we must first know what a company is, how to establish it, and what are the costs of establishing any investment company in the Emirates. After that, we will learn about the types of investment companies in the Emirates in detail.

Company nature:-

 A company is a contract between two or more persons whereby each of them undertakes to contribute to a specific project that aims to make a profit through a share of money or work, in order to share all the profit or loss arising from the project.

Costs of establishing an investment company in the Emirates:-

The costs of establishing an investment company in the Emirates are mainly  limited to several expenses, which are as follows:

  • The cost of the commercial license expenses (i.e. the license to practice commercial work)
  • The cost of purchasing the office or company site through which you conduct your business, whether renting or purchasing.
  • The cost of purchasing furniture and decor for the office through which you conduct your business.
  • The cost of obtaining work permits for sponsored employees and the required visas for them under your current company name.
  • The cost of opening a new account in the company’s name in a bank, then depositing the minimum capital depending on the type of business activity.
  • The cost of establishing a company, as the cost of establishing industrial companies in the UAE is higher than the cost of establishing investment, commercial and professional companies.
  •  Finally, the cost of the commercial license.

Steps to establish an investment company in the Emirates:-

  • Determine the nature of the company’s activity.
  • Determine the legal form of the company.
  • Register the company’s trade name.
  • Obtaining initial approval for establishing the company.
  • Bring the articles of association and choose a headquarters for your company’s business.
  • Obtaining approval from the relevant authorities for a specific activity.
  • Get the license.

Types of investment companies in the Emirates: –

Investment companies are divided into two types:

  • Personal companies (joint stock companies).
  • Money companies (stock companies).
  • Companies of different nature (bearing the characteristics of these two types of companies) because they are based on personal consideration on the one hand and on financial consideration on the other hand, and one aspect may prevail over the other, and this is what we will explain to you.

First: Personal companies:

Personal companies are considered one of the most important types of investment companies in the Emirates and are called personal companies because they are based primarily on personal consideration only. They are usually established between a small number of people who are united by any of the ties, whether kinship or friendship, and each of them places his trust in the other, so the personality of each partner is a matter of consideration for the other partners. Given the importance of personal consideration in these companies of this type, the company is originally dissolved and dismantled upon the death of one of the partners or his loss of his eligibility or his withdrawal from it.

It is also not permissible for any of the partners to transfer his share in the company to another person except with the consent of all the partners. The ideal form of this type of company is the general partnership, which consists of several general partners, meaning that they are all personally and jointly liable for all the debts of the company in their private possession, and their liability is not limited to the shares provided to the company.

This type of investment companies in the UAE also includes (simple limited partnerships), while the third type of investment companies in the UAE (joint venture companies) is a hidden, concealed company that does not exist for others, but for the partners it exists, and therefore it does not have a legal personality and does not have capital or a company address.

Second: Money companies:

These companies are considered types of investment companies in the Emirates. They do not depend on personal consideration and it does not have a role in the establishment of these companies, but they are based primarily on collecting the capital necessary to exploit the company’s activity only. Based on this consideration, the financial consideration occupies the first place in these companies, and the clear example of these companies is joint stock companies.

It is common for money companies to undertake huge projects that require large amounts of capital, but a limited number of partners are unable to provide this money, as is the case with personal companies. For this reason, these companies depend on the public of subscribers, as the company’s capital is divided into shares of equal value, where the value of the share is small so that a large number of people with limited income can subscribe to it.

Third: Companies with a dual nature:

The most important and famous types of investment companies in the Emirates are dual-nature companies. They are considered a type of company based on both personal and financial considerations. They are dual-nature companies that mediate between personal companies as a type of investment companies in the Emirates and money companies as well. Personal consideration may excel in some of these companies, so they are more similar to personal companies, and sometimes financial consideration may excel in others, so they are more similar to money companies. These companies (dual-nature companies) fall into two types:

Limited Liability Companies

These companies are considered a relatively new type of investment companies in the Emirates, as the limited liability company is similar to personal companies because the number of companies in it may not exceed 50 partners and the partner’s share in it is considered non-tradable through commercial means, but its trading is subject to certain restrictions, the most important of which is the possibility of recovering this share for the partners, and it is not permissible to establish it through public subscription, and it is not permissible for it to issue any shares or any tradable bonds, and this type of company is close to money companies in terms of its management system, establishment, determining the responsibility of the partners in it, and transferring the share of each partner to his heirs.

Limited Liability Companies

This type of company is considered one of the most investment companies in the Emirates, as it consists of two types of partners (limited partners who are only liable for the amount of the share they provide, and these shares take the form of tradable shares that are no different from shares in joint stock companies, and (general partners) who are subject to the same provisions as general partners in general partnerships and simple limited partnerships, and they acquire the status of a merchant and have absolute responsibility for all their money, and they manage the company.

Types of commercial companies in the UAE:

  • Solidarity companies.
  • Simple limited partnerships.
  • Holding companies.
  • Joint stock companies.
  • Limited liability companies.
  • Limited Liability Companies.