The joint venture is one of the most popular forms of doing business in Dubai as it allows foreign entrepreneurs or companies to associate with a local company under a contractual agreement. Joint ventures offer foreign companies the same advantages as limited liability companies in Dubai. In order to start a joint venture in Dubai one needs a local partner who will hold 51% of the participation in the company. The only difference between joint ventures and limited liability companies is the prescription of profits and losses. One of the greatest advantages of setting up a joint venture in Dubai is that no license in required, as the local partner will have the business license to carry out the activity. Dubai joint ventures are suitable for specific projects.
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How to set up a joint venture in Dubai
Once the conditions of the joint venture have been agreed upon, the parties must register the agreement with the Department of Economic Development in Dubai (DED). The agreement must have a certain form issued by the DED 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:
- the registration application,
- trade name reservation,
- copy after the applicants’ passports,
- a No-Objection Letter issued by the local partner,
- copy after the director’s passport,
- approval for the type of activity to be undertaken.
Foreign applicants must also submit a Dubai residence permit. Also, a resolution passes by the foreign company’s management board will be required.
Starting to operate under a Dubai 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 Trade Register:
- the initial approval,
- the documents registered for the initial approval,
- a copy of the office lease agreement,
- a copy of the association agreement notarized by a public notary.
Unregistered joint ventures are also allowed to operate in Dubai, but for short periods of time only.
For assistance in setting up a joint venture, you can contact our company registration agents in Dubai.