In the last decade, the UAE has become an increasingly popular destination to do business and opportunities abound for many. But alongside the hard work of setting up a business in the UAE, there are a number of legal implications to be aware of. Here we share with you some of the most important legal points to be aware of before embarking on your journey of entrepreneurship:

  • Perhaps the most important issue to be aware of is that those expatriates who establish a company in the UAE, outside one of the freezones, must have a UAE partner who owns 51% or more of the shares. This is stipulated by The Federal Company Law.
  • Whatever legal framework and agreements you choose to govern your partnership with your local Emirati business partner will also be important.
  • There are seven categories of business organisation defined by same Federal Company law which include:
    • General Partnership Company
    • Simple Partnership
    • Joint Venture
    • Private Joint Stock Company
    • Public Joint Stock Company
    • Limited Liabiilty Company
    • Partnership Limited with Shares
  • Limited Liability Companies (LLCs) in the UAE are relatively flexible and enable any legal business to be conducted in the local market with the exception of insurance, banking or investment.
  • LLCs are the most common form of business structure used in the UAE (and around the world). It means each partner shall only be liable to the extent of his or her share in the capital of the business.

Establishing a business in a foreign market can be very rewarding but is also complex and local laws and liabilities should be taken into account at the outset. If you are looking at setting up a business there are numerous pitfalls you should be careful to avoid.