UAE Law and Practice Contributed by: Amir Alkhaja, Gerry Rogers, Daria Selivanova and Danila Kriuchkov, Habib Al Mulla & Partners
2.4 Right to Appeal If UAE authorities reject a foreign investment application, the investor has limited options to appeal. The UAE has no special tribunal or board for foreign investment disputes. Instead, inves - tors must rely on standard administrative and court processes. However, only a limited number of institutions are subject to foreign investments limitations. If approval is delayed without reason, the inves - tor may escalate the issue or rely on the “silence is consent” rule, if it applies. This rule assumes approval if the authority fails to respond in time. However, this does not apply to all procedures. For example, under the Competition Law, no decision within 90 days means automatic refus - al. In that case, the investor can go to court after trying an administrative appeal. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Investors in the UAE can choose from several types of corporate vehicles, each with distinct characteristics and uses. Limited Liability Company (LLC) The most common form for doing business onshore (mainland UAE) is the Limited Liability Company (LLC). An LLC provides limited liabil - ity to its shareholders (who are liable only to the extent of their capital contributions) and a flexible management structure. Key features of LLCs include: • offers limited liability to shareholders; • no minimum capital required by federal law, but Emirates may set practical thresholds; • allows 1 to 50 shareholders; and
• shares are privately held and not offered to the public. Since 2021, full foreign ownership is allowed in most sectors. Branch or Representative Office of a Foreign Company A foreign company may choose to establish a branch or representative office in the UAE instead of setting up a new company. These are not separate legal entities but extensions of the foreign parent. Branch office The characteristics of a branch office are as fol - lows. • A branch can carry out commercial activities within the scope of its parent’s licence. • It can earn revenue in the UAE, sign contracts and hire staff. • It cannot import goods for trading. An LLC or a local commercial agent is usually needed for that. • There is no minimum capital requirement. • Previously, a UAE national was required as a local service agent. This rule has now been removed for most activities under the new Companies Law. • Some sectors still require a local agent, such as defence, commercial agencies or security services. • The branch must register with the relevant licensing authority and obtain a commercial licence. • A branch is useful for foreign firms executing contracts or testing the UAE market. • Common sectors include construction, engi - neering and consulting.
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