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Foreign investors planning to set up a business in UAE must first establish the type of business they are looking to set up, and whether or not it will be based in one of the UAE’s many free zones– these two factors will determine whether or not a local partner is needed. There are three common ways for foreign entrepreneurs to set up a business within the UAE: obtaining a professional services license, setting up in a free zone, or forming an LLC.
According to the UAE Commercial Company Law, a local sponsor is one of the pre-requisites that a foreign investor needs to serve while establishing an LLC company in Dubai. A local sponsor in Dubai needs to individually hold 51% shares of the company, whereas the foreign expat is expected to keep 49%. All business activities are held in the name of the company with nothing in the name of the local partner. In fact, full control of the business lies with the foreign entrepreneur– leaving them to run and manage all day-to-day business activities without any interference or even interaction with their local partner. It is the decision of an investor to make a local partner sleeping, partner, or activity partner. Working with a local partner as an LLC also allows foreign entrepreneurs to trade directly with the local market, open a limitless number of branches throughout the UAE.
Finding a local partner can be tiresome and time-consuming. ARC Associates, being the most emerging and best Business setup service experience specialized in offering back-to-back business solutions ranging from licensing, local sponsorship office setup and a business advisor who will assist you with complete corporate setup solutions.