If you are not Emirati and are considering the United Arab Emirates to set up your business as a mainland company, you will probably need an Emirati partner. The United Arab Emirates, and Dubai in particular, are a destination of choice for French-speaking entrepreneurs and entrepreneurs from around the world seeking tax optimization. The UAE offers a sunny lifestyle all year round, an attractive tax system, and taxes close to 0. Setting up a company in Dubai can prove very complicated when you have no experience or knowledge of local regulations, regardless of your business sector. Turning to a firm like ours means saving time and money. We are a leader in company formation in the UAE and have been present in the UAE since 2009. We also have an office in Hong Kong since 1998 and another office in Orlando, Florida, USA. We specialize in setting up all types of companies in the UAE: Mainland, Free Zone, Freelance, Offshore and Foundation.
We support you from A to Z
It is very important to note that, depending on the type of structure you choose, you will probably be required to have an Emirati partner. Be careful not to confuse the Local Service Agent with the Local Partner. Until June 2021, an Emirati partner was mandatory for commercial companies registered in the mainland. For companies carrying out so-called professional activities, such as services and consulting companies, it has no longer been necessary for two years to have a local partner. However, it is mandatory to have a Local Service Agent for this type of structure.
But who exactly is this Local Service Agent?
One of the questions that comes up most often when setting up a company is: do I need an Emirati partner to start a business in the UAE?
A Local Service Agent for professional activities in the mainland
For all professional licenses registered in the mainland, the law requires a Local Service Agent to be nominated to represent your company before the authorities. This person has no involvement in the company's capital or decision-making; they are simply the Emirati representative of your structure. The Local Service Agent simply provides their services in exchange for a fixed annual fee. In this case, the foreign investor owns 100% of the company's shares. The Local Service Agent therefore has no authority over it. In summary:
- The Local Service Agent is not involved in the operation of the company
- Their role is to facilitate your administrative procedures with the authorities
- Their fee remains very affordable and fair
For commercial licenses, it is not necessary to have a Local Service Agent or even a local partner. Note: a free zone company will not need a local partner because, by definition, a free zone company can be 100% foreign-owned.
And who is the Local Partner?
The Local Partner must be an Emirati national and own at least 51% of the company's shares (mainland only).
An Emirati who owns 51% of the company's shares
In most cases, the local partner signs an agreement with the foreign investor to define their scope of involvement and annual remuneration. Generally, the local partner grants full powers to the 49% shareholder. However, this year's major change concerns the local partner. Indeed, as explained in the introduction, since the June 2021 reforms, it is no longer necessary to have an Emirati partner for commercial companies in the mainland.
Full ownership in the mainland and free zones in Dubai
This means that both in the mainland and in free zones, a foreigner can now fully own their company.
Mainland commercial license: Local Service Agent or Local Partner?
For several months now, more than 1,000 activities in Dubai, Ajman, Sharjah, etc. have offered full foreign ownership. Click here to discover all commercial activities that no longer require a local sponsor holding 51% of your company's shares. This list is freely available on the DED website.
Do you need a Local Service Agent?
At the moment, the only structure that requires you to have a Local Service Agent is a professional company in the mainland. If you decide to choose Merritt as your partner to set up your company, we will provide you with a Local Service Agent. Our firm specializes in company formation, license renewal, and all administrative procedures related to your company in Dubai or any other emirate. We also assist you with the procedures for opening your personal and business bank accounts.
A brief summary of your needs regarding an Emirati partner:
MAINLAND
Commercial Activity
No need for an Emirati sponsor - full foreign ownership
Professional Activity
Requires a Local Service Agent
FREE ZONE
Free Zone Company
No need for an Emirati sponsor - full foreign ownership
OFFSHORE
Offshore Company
You need an agent such as our firm
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