Fortunum Investments Ltd.

Introduction

The UAE Companies Law that dates back to 1984 states that a Dubai LLC must have minimum capital of UAE Dirhams 300,000.  This law was modified in 2009 to allow businesses to decide their own capital and funding based on actual requirements.  However, I am yet to see evidence that this law has come into effect or indeed if it is being enforced.

The Procedure

Once the Initial Approval has been granted to start a company, the investor or investors must approach a bank based in Dubai and open what is commonly called an “Under Formation” account.  The bank will usually open a “Call-Account” and provide you with an account number.  You will then have to deposit a minimum of AED 300,000 (USD 83,000) and request the bank in writing to issue a “Capital Letter.”  The bank will issue a letter to the Dubai Licensing Authorities on it letterhead stating that the company under formation has opened an account at their bank and deposited AED 300,000 as capital.  The bank will also state that they will not release the funds until one of two conditions have been met, namely;

• The company has been formed and the original license is presented to the bank for verification, or
• The licensing procedure has been cancelled (the company will not be formed) and the Dubai Licensing Authority has issued a letter stating this.

Note: You should expect your funds to stay at the bank for at least two weeks.

I don’t have this much money to start a company.  What can I do?

There are many agents (companies and individuals) who are ready to put up the capital for you for a fee.  They usually charge between 5% and 10% of the capital amount that the put up for you.  Since the capital is being placed at a bank in your name, these agents carry a very great risk of someone running away with their money.  They will therefore hold your passport while the money sits in your account.  They may also request other safety measures such as a cheque to cover the amount placed in your account.