A Civil Partnership (also referred to as a “professional company”) is suitable for conducting consultancy or service-related activities. It is governed by the provisions of UAE Civil Code and Local Order No. (63) of 1991 relating to the licensing of professionals and craftsman in the Emirate of Dubai.
Features of a Civil Partnership
A Civil Partnership can be formed by two or more individuals. A Civil partnership does not need to be capitalized. The partners do not enjoy limited liability and are jointly liable for any debts or losses of the Civil Partnership, unless otherwise stated in the Civil Partnership Agreement. The Civil Partnership Agreement must be signed by the partners before a Dubai court notary public.
The Civil Partnership must appoint a UAE national, or company wholly-owned by UAE nationals, as its Local Services Agent. The Local Services Agent is appointed pursuant to a Local Services Agreement and provides “local services” (such as facilitating the issuance of residency visas and work permits for your employees, and handling the renewal of the professional licence each year) in return for an annual services fee. The Local Service Agent does not assume any financial or legal liability for the Civil Partnership.
The partners maintain full ownership and control of the business. However, a general manager may be appointed from among the partners to manage the Civil Partnership. If the manager acts outside the scope of his powers, he shall be personally liable for any loss suffered by the Civil Partnership as a result of his actions.
Summary of registration and licensing formalities
An application must be made to the Dubai Department of Economic Development (DED) to seek initial approval for the Civil Partnership to be formed and for registration of its business name. The DED often requests the partners to demonstrate that they possess the necessary skills or expertise to carry on the professional activity they wish to practice.
The Civil Partnership Agreement must be signed by the partners before a Dubai court notary public (in English/Arabic). The Civil Partnership must enter into a lease of suitable premises from which its business may be operated and obtain an Ejari certificate from the Landlord (an official summary of the lease terms issued by the Real Estate Regulatory Authority in Dubai).
As the partners are individuals, the formation process is relatively straight-forward. Provided the lease terms have been agreed in principle, it should take approximately 2 to 3 weeks for a Civil Partnership to be formed.