Securing Full Control and Profits with UAE Nominee Partnerships

Setting up a business in the UAE mainland typically requires a local partner, often holding 51% of the shares under the country’s historical foreign ownership laws. However, with the rise of nominee partnership arrangements, foreign entrepreneurs can now structure their businesses to maintain full operational control and retain 100% of the profits, while still meeting local compliance requirements.

Here’s how nominee partnerships work and why they are a strategic tool for foreign investors seeking security, flexibility, and full economic ownership.

What Is a Nominee Partnership in the UAE?

A nominee partnership is a legal structure where a UAE national is appointed as the nominal (or silent) partner in a company to satisfy local ownership requirements. However, the true control, decision-making power, and economic interest remain with the foreign investor through contractual agreements that:

• Delegate management authority

• Assign beneficial ownership

• Govern profit distribution

• Limit the nominee’s involvement to legal compliance only

This arrangement is typically supported by a robust set of legal documents, such as:

• A Nominee Shareholder Agreement

• Declaration of Trust or Side Agreements

• Power of Attorney in favour of the foreign investor

• Profit assignment and indemnity clauses

Benefits of Using a Nominee Structure

✅ Full Operational Control: The foreign party retains all decision-making authority, including management, hiring, financial control, and strategic direction of the business.

✅ 100% Profit Retention: Despite the local partner holding nominal shares, the entire profit can be contractually assigned to the foreign shareholder.

✅ Asset and IP Protection: All tangible and intangible assets, including trademarks, client lists, and proprietary software, can be held and protected under the foreign investor’s name or offshore holding company.

✅ Regulatory Compliance: Nominee structures allow investors to meet local sponsorship or ownership laws while staying compliant with the UAE’s legal and licensing framework.

✅ Privacy and Risk Mitigation: Well-drafted nominee agreements limit the nominee’s influence and mitigate risks such as interference, disputes, or exposure to liabilities.

Key Considerations for a Secure Nominee Structure

• Legal Drafting: All agreements must be professionally drafted and notarized where applicable, ensuring enforceability under UAE law.

• Trustworthy Nominee: Choose a reputable and reliable UAE national or corporate nominee service provider with a proven track record.

• Clear Exit Strategy: Agreements should include exit and succession clauses to protect your interests in the event of a dispute, resignation, or death of the nominee.

• Jurisdiction-Specific Adjustments: Certain emirates and free zones may have unique nuances or updated foreign ownership thresholds, so it’s essential to structure appropriately.

Conclusion

A properly structured nominee partnership enables foreign entrepreneurs to own, manage, and profit from their UAE business with full confidence, while maintaining compliance with local regulations. As foreign ownership restrictions continue to ease, the need for nominee structures is evolving, but in many sectors and emirates, they remain a highly effective solution for securing control without compromise.

At MENA Consultancy, we specialize in drafting secure, enforceable nominee partnership agreements tailored to your business objectives. Our legal and corporate structuring experts ensure that you retain full control and profitability safely and transparently. Contact us today to learn how we can help you establish a secure nominee structure for your UAE business.