Key things to look out for when choosing a local partner in Dubai/ Abu Dhabi/ UAE?
When setting up a local company as per the UAE Companies Law and UAE Civil Law, the expatriate shareholders are required to nominate a Local Service Agent or a Local Partner (Sponsor), who must hold the majority share of 51%, when establishing a company.
The key consideration is short and long term security:
- What are the specific requirements from the relevant governmental departments? Such as ADNOC, Dubai Municipality, DED.
- Is your partner a true investor?
- Is your partner an Individual or a corporate service provider?
- What happens in the event of succession?
- What Agreements are there? And are they valid?
- Where is your sponsor located?
- Exit Clauses – can you change sponsor easily in the case of a disagreement?
- Reliability of your sponsor?
- WPS blocks and mitigating your risk to over exposure to other firms under the same sponsorship
- What happens if your sponsor is not available for signings?
For full considerations on whether to choose an individual or corporate sponsor please take a look at the following article I wrote on this key subject: