The joint venture is one of the most common forms of doing business in the UAE as it allows foreign investors or companies to subordinate with a local company under a contractual agreement. Joint ventures offer overseas companies the same advantages as LLC companies in Dubai. In order to start a joint venture in the UAE one needs a local partner who will hold 51% of the contribution in the company. The only difference between joint ventures and LLC companies is the prescription of profits and losses. One of the utmost advantages of setting up a joint venture in the UAE is that no license in required, as the local partner will have the business license to carry out the activity and joint ventures are appropriate for specific projects.
How to set up a joint venture in Dubai
Once the circumstances of the joint venture have been agreed upon, the parties must list the agreement with the Department of Economic Development in Dubai, Abu Dhabi or other emirates (DED). The agreement must have a certain form issued by the DED or equivalent government entity in the emirate and must be signed before a public notary. Once the joint venture agreement has been drafted, initial approval from the DED is required. In order to obtain the approval, the following documents must be supplied:
Foreign applicants must also submit the UAE residence permit. Also, a resolution passes by the foreign company’s management board will be required. Starting to operate under a UAE joint venture. Once the initial approval is obtained with the DED, the joint venture is required to follow several steps more in order to start operating. The following documents must be submitted with the Dubai