Legal Aspects of Company Incorporations in Dubai/UAE
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The investors establishing their businesses in the UAE should consider various legal aspects, before any investment decisions to avoid any future legal implications.
U.A.E. is one of the world’s most Dynamic economies, due to its investment friendly laws, International standard infrastructure, geo strategic location and 0% taxation on personal and corporate incomes makes it the emerging commercial hub of the world. The investors establishing their businesses in the UAE should consider various legal aspects, before any investment decisions to avoid any future legal implications.
Establishing companies in UAE free zones is very attractive for investors due to 100% foreign ownership and less bureaucratic hurdles to incorporate, but it should not prevent them to know that technically speaking free zones are considered as out of UAE as there is no application of local laws here. The free zone companies cannot operate from the mainland of Dubai/UAE until they open branch offices there or to work with local distributors only.
While operating from the mainland of UAE is beneficial for investors as the local companies in the UAE are more entitled to win public tenders and contracts as per Local regulations. The investors should also be careful while drafting Memorandum of Association [ MOA] and all the management, executive, statutory, and financial powers should be dedicated to expatriate partner leaving very small room for the local partner to run the company. The side agreement although not enforceable technically should also be signed to protect the interests of foreigners.
ABOUT THE AUTHOR: Mr. Mian
Mr. Mian is Managing Partner and corporate lawyer with ten years of experience at Prudential M.E Legal Consultants, Dubai Office.
Copyright Prudential Middle East
More information about Prudential Middle East
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Establishing companies in UAE free zones is very attractive for investors due to 100% foreign ownership and less bureaucratic hurdles to incorporate, but it should not prevent them to know that technically speaking free zones are considered as out of UAE as there is no application of local laws here. The free zone companies cannot operate from the mainland of Dubai/UAE until they open branch offices there or to work with local distributors only.
While operating from the mainland of UAE is beneficial for investors as the local companies in the UAE are more entitled to win public tenders and contracts as per Local regulations. The investors should also be careful while drafting Memorandum of Association [ MOA] and all the management, executive, statutory, and financial powers should be dedicated to expatriate partner leaving very small room for the local partner to run the company. The side agreement although not enforceable technically should also be signed to protect the interests of foreigners.
ABOUT THE AUTHOR: Mr. Mian
Mr. Mian is Managing Partner and corporate lawyer with ten years of experience at Prudential M.E Legal Consultants, Dubai Office.
Copyright Prudential Middle East
More information about Prudential Middle East
View all articles published by Prudential Middle East
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
