Side Agreement With Local Sponsor

This agreement will be in addition to a judicial agreement (notarized at the Dubai Courts) of the company, which stipulates that 51% of the shares of the company will be held by the local sponsor and the rest by the expatriate investor. This means in the first place that UAE nationals must hold at least 51% of the shares in the share capital of an L.L.C and that the remaining 49% of the shares can be held by the foreign investor(s), since only nationals are allowed to create L.L.C. In reality, many companies are absolutely owned and managed by foreign shareholders. Even though, according to the law, the share of the local shareholder of the United Arab Emirates must be maintained at least 51%. Therefore, we can say that the Dubai Court of Cassation has made it clear that the only way to prove something in contradiction with the MOA is to document the ancillary agreement in writing…