When embarking on a business venture in the United Arab Emirates (UAE), one of the fundamental considerations is the involvement of local partners. In many cases, foreign entrepreneurs or companies seeking to operate in the UAE are required to have a local partner or sponsor. This aspect of the UAE’s business landscape is rooted in the country’s legal framework and plays a pivotal role in the success of ventures. In the following article, we will understand the role of local partners in business setup UAE and the significance of this collaboration.

Understanding the local partner requirement:

UAE’s legal system dictates that certain business activities, especially those conducted on the mainland, require a local partner or sponsor. This local partner is typically a UAE national or a company owned by UAE nationals. The primary aim of this requirement is to foster collaboration and partnerships between local and foreign businesses, promoting economic growth and knowledge transfer.

Legal ownership and control:

One of the primary roles of a local partner in a UAE venture is to hold a significant share of ownership in the company. In most cases, the local partner will own at least 51% of the business, while the foreign partner or company holds the remaining 49%. This structure ensures that local partners have a substantial say in the operations of the business.

Navigating legal and regulatory procedures:

Local partners play a crucial role in helping foreign businesses navigate the UAE’s legal and regulatory landscape. They are well-versed in the local laws and can assist in securing the necessary licenses, permits, and approvals. Their local knowledge can be invaluable in avoiding legal pitfalls and ensuring compliance with UAE regulations.

Cultural and cultural insights:

Local partners provide foreign entrepreneurs with cultural insights and a better understanding of the local market. Their knowledge of customs, traditions, and business practices can be instrumental in building relationships and effective communication with local clients, customers, and authorities.

Access to local networks:

Having a local partner grants access to a network of contacts and connections that can be beneficial for the business. Local partners often have established relationships with key stakeholders, government entities, and potential clients. Leveraging these connections can expedite processes and open doors to business opportunities.