United Arab Emirates (UAE) – This economic center is dynamically developing and attracting businessmen and investors from all corners of the world. The creation of joint ventures (JV) is one of the preferred ways of doing business in the region. The main legal provisions regulating such agreements contained in Federal Law No. 2 from 2015 about commercial companies (CCL) were supplemented by other regulatory acts about international investments and corporate governance. Learn more about online trading in UAE for successful doing business.
These legislative acts establish foundation for functioning and doing activities joint ventures, including minimum capital investments, organization of management and requirements to reporting. As additional support foreign investors serves Law about free zones, providing unique opportunities.
Legislation and Framework Foundations for Joint Ventures
United Arab Emirates (UAE) – this economic center with dynamic development, attracting businessmen and investors from all corners of the world. The creation of joint ventures (JV) is one of the preferred ways of doing business in the region. The main legal provisions regulating such agreements contained in Federal Law No. 2 from 2015 about commercial companies (CCL) were supplemented by other regulatory acts about international investments and corporate governance.
These legislative acts establish a foundation for functioning and doing activities in joint ventures, including minimum capital investments, organization of management, and requirements for reporting. As additional support, foreign investors serve Law about free zones, providing unique opportunities.
Details of Structure Ownership and Profit: Numbers and Facts
- Traditionally, foreign investors could own not more than 49% of shares of companies operating outside free economic zones. However, changes in legislation allow full ownership of foreigners in certain sectors.
- 01 January 2020 year – key date change legal establishments, determined more liberal approach to ownership shares for foreign investors.
Distribution profit and losses usually correspond to share participation but allow other conditions depending on contribution in capital, technology, or management resources.
Effective Mechanisms Management and Control
- Appointment responsible for positions of general and financial directors. Clear definition roles.
- Implementation mechanisms decision-making, such as voting within the board of directors and meeting shareholders.
- Examples of successful management: a long-term partnership in field telecommunications between the international and local companies, where clearly distributed mechanism control offeringFinancial stability in UAE
Ways and Strategies Resolution Disputes
- Arbitration – preferred method thanks to confidentiality and flexibility. Supported as local, so international arbitration structures.
- Examples from practice: Clients successfully completed arbitration in Dubai International Arbitration Center (DIAC) and managed to preserve relations after settlement.
Use Provisions about Exit for Protection Interests
Exit from joint venture regulated conditions, providing sale shares, rights first refusal, and options on sale or purchase to enable new businesses. You can further read about Business support in UAE
Examples: successful exits from projects with options first refusal allowed preserve partnership relations and prevented legal disputes, providing favorable conditions for all parties.
Cases: Successes and Lessons Past
UAE serves as an example of numerous successful JV in strategic sectors, such as oil and gas, where partnerships are based on local knowledge and world experience.
Failures occur; however, each case provides lessons on how correctly composed mechanisms and mutual agreements help minimize risks.
Complexity creation JV in UAE requires the arrangement of a multi-level protection legal field and strictly following international standards, which maximally protects tested in practice models doing successful business.
