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CREATIVE ZONE LLC - Local Sponsorship Abu Dhabi

Department of Economic Development (DED)
Local Partners - Companies Vs Individuals

When setting up a local company as per the UAE Companies Law and UAE Civil Law, the expatriate shareholders are required to nominate a local service agent or a partner (which are often called sponsors) when establishing a company. In the case of a Limited Liability Company LLC (i.e Commercial Trading entity) the local partner must hold the majority equity share holding of 51% or more. We at CREATIVE ZONE differ as we can now offer that local partner service as a 'corporate nominee partner or entity' rather than an individual UAE national. Therefore the shareholding of the 51% falls under this new entity CREATIVE ZONE General Trading LLC, rather than a local individual.

The main benefits of local partner being a company and not an individual are firstly you are taking out the emotional relationship of dealing with an individual, from both sides of the relationship. So as a corporate nominee partner the foreign company is complying with UAE Companies Law and you deal with a corporate entity with a structured board and a power of attorney over this company, rather than a local individual.

So from a corporate governance perspective, for transparency and so forth, this adds a number of benefits to the foreign party, not least of which is succession planning. Companies often worried about coming into the market and selecting a local partner and then wondering what would happen if the local partner were to die or change his mind. With a corporate entity, the contractual terms remain in place, so it gives more rigidity to the arrangement than having an individual national being the local partner.

A nominee agreement will be executed. Please contact CREATIVE ZONE for a draft.