Foreign companies operating onshore in Abu Dhabi and Dubai are currently required to have a local partner.
Limited Liability Companies (LLCs) require a local sponsor to hold 51% of the shares.
Foreign Branches require a service agent and whilst hey don’t have any ownership, they facilitate the registration and assist with government liaison.
A new Foreign Direct Investment Law is currently being implemented with the aim of opening up the UAE market to increased levels of foreign ownership, but many foreign companies will still require a local sponsor.
How a local sponsor can affect your business
Choosing the right partner is crucial to the future success of your business. A hasty or ill-informed decision could be catastrophic. It’s essential to do your research first and understand the implications for your business when you set up and, more importantly, further down the line when your business is operational.
Consider a local sponsor relationship like a marriage. The courtship is all about getting to know each other; the engagement is about setting the terms for the future; the marriage is the day-to-day relationship and if it all turns sour, the divorce (or breakup of the relationship) is often lengthy, stressful and expensive.
As a foreign company expanding into Abu Dhabi or Dubai:
1) How would you identify and appoint a suitable local partner?
2) Have you identified the risks for your organisation and how to mitigate them?
3) Do you understand the implications of appointing the wrong partner for your business?
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Gateway's 2019 Awards
Gateway's 2019 Awards
Best Company Formation Specialists 2019
Best Onshore Company Formation Specialists – UAE
MEA Markets 2019 GCC Enterprise Awards
Best Company Formation Specialists 2019 – UAE
CEO Today Middle East Awards 2019 (Jenny Hunt)
Recognized Leaders in Offshore Company Formation 2019
10 Most Promising Corporate Business Service Providers 2019
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