Role of Local Partners in UAE LLCs: Regulations and Best Practices
                     Role of Local 
Partners in UAE 
LLCs: Regulations 
and Best Practices
An Overview
When planning an LLC company formation in Dubai, UAE, understanding the role of 
local partners is essential for legal compliance, operational efficiency, and long-term 
business success. In the past, mainland LLCs required a UAE national to own 51% of 
the company's shares. However, recent reforms have opened the doors for 100% 
foreign ownership in many sectors, making the UAE an even more attractive 
destination for global investors. 
Legal Changes in LLC Ownership
Regulations were changed by the UAE government to permit full foreign ownership 
of a variety of corporate ventures. Despite this, certain strategic sectors still require 
a local Emirati partner, particularly those related to oil, gas, defense, and banking. 
Types of Local Partnerships
Local partners in UAE LLCs can either be:
• Equity Shareholders: Having an ownership stake in the business (often 51%) 
• Local Service Agents (LSAs): Required for professional licenses, without equity involvement
Both roles are crucial in facilitating government approvals, visa processing, and business 
licensing.
Choosing the Right Local Partner
Selecting a trustworthy and experienced local partner is critical to long-term 
success. Best practices include:
• Drafting clear, legally binding agreements
• Defining roles, profit-sharing, and dispute resolution
• Considering corporate nominee sponsorship for added transparency 
Choosing the Right Local Partner
Even where not mandatory, local sponsors offer advantages such as: 
• Strong understanding of local regulations
• Assistance in dealing with authorities
• Valuable local business connections 
Conclusion
While regulations around LLC company formation in Dubai, UAE have become more 
flexible, local partners still play a strategic role in certain sectors. By following best 
practices and legal procedures, investors can ensure a smooth and compliant setup 
for their UAE business. 
THANK YOU
CONTACT US 
+971-55 (554) 0853 
[email protected] 
www.themilestoneuae.com