How to Set up a Joint Venture Company in Dubai?

Dubai, the heart of UAE, provides vast business opportunities to global investors who want to set up their companies and enter the markets in the country. Among these setup opportunities, Joint Venture Company Formation in Dubai is the most popular one that is commonly used to execute the market entry or expansion strategy. Moreover, it also facilitates innovative business strategies for enterprises from all over the world.

So, before getting into the technical part of the company formation procedure, let’s first learn some basics about Joint Venture Companies in Dubai.

Joint Venture Company and its features

A Joint Venture is basically a contractual agreement between two or more participants, say a foreign party and a local party, who unite to achieve specific business goals. The fundamental features of a Joint Venture Company are as follows:-

• There is no limitation on the number of entities that can collaborate with Joint ventures.
• Equity participation has to be at least 51%.
• The distribution of profit and loss is mutually agreed upon while business setup in Dubai.
• There is no requirement for the licensing and publishing of the Joint Venture agreement.
• They are considered a suitable structure for entities who work together on specific projects.

Additionally, there are four different forms of Joint Venture Companies in Dubai –

1. Project Joint Venture Company – Created to complete one or more projects like building infrastructure or provision of scheduled services.
2. Functional Joint Venture Company – Created to combine the expertise of two entities. For example, a transportation business forming a Joint Venture agreement with a warehouse facility provider.
3. Vertical Joint Venture Company – Formed between two businesses that are a part of the same supply chain. For example, if one company is indulged in producing raw materials, the other one processes them into a specific product.
4. Horizontal Joint Venture Company – Formed by businesses that deal with the same goods and services with the intention to enter a new market or compete with a leading firm.

Also read the post: Freelance Visa Dubai, UAE

Key steps to start a Joint Venture Company in Dubai

When two parties agree upon the joint venture contract, they need to register it with the Department of Economic Development (DED). The key steps of registration include the following -

Determine the business activity

To start off, select a business activity that you want to carry out in your company. Conduct deep research of the market, identify your target market, and discover their tastes, preferences, and demands. This will enable you to come up with better offerings that will help create a large customer base.

Establish a trading name

To start any business, you would require a catchy name that will complement your business offerings. As a business owner, you must come up with something professional and appropriate that can easily grab the customer’s attraction and make them stop by your product.

Finalize a location

Once you are done selecting the activity and name for your company, it's time to find an apt location to set up your joint venture. The right location can help the company get the right customers and clients and enhance its revenue.

Register an agreement with the DED

Once you get the initial approval for the above, you are required to submit a few supportive documents to the DED and register an agreement for a Joint Venture Company Formation in Dubai.

Fulfill the legal formalities

There might also be a requirement for a few additional legal formalities. Duly complete them in accordance with the Joint Venture decree.

Pay the fee and get an office space

Finally, you will need a corporate space to operate your business. Hence, for that purpose, you need to pay a minimum amount of fee and get the license to carry out your business operations.

The company formation experts of Shuraa Business Setup are at your service to perform all the legal administrative tasks for you and offer you a seamless company setup in Dubai or anywhere across UAE.

Documents needed for Joint Venture Company Formation in Dubai

• A duly filled application form
• Trade name registration certificate
• Passport copies and IDs of the applicants
• No Objection Certificate issued by the local sponsor
• Approval for undertaking business activities
• Board resolution from the company management
• Residence permit (for foreign applicants)
• Initial approval from the DED
• A copy of the office lease agreement
• A copy of the association agreement notarized by a public notary
• Additional documents to register for approval

There might be a requirement for some additional documents that you have to submit to the Dubai authorities. Shuraa experts will not only guide you with the needful but also arrange the necessary paperwork to fulfill your purpose of Joint Venture Company Formation in Dubai.

Advantages of forming a Joint Venture Company in Dubai

Below given are some of the major advantages of forming a Joint Venture Company in Dubai -

Expertise opinion and unique perspectives

Since Joint Venture is an agreement between two different parties, it can be run effectively with a proper structure and the views of both involved parties. They can together brainstorm the government’s entreaties and come up with better solutions for the problems.

Time limitation

Joint ventures usually have a fixed timespan. As it doesn’t involve a long-term commitment, the contract expires after a period. This way, the involved partners get a chance to test their professional relationship with each other.

Entry and exit flexibility

The partnership agreement of a Joint Venture Company is flexible. This simply means either of the partners can exit the company at any time as per their wish, and a new partner can be added as required. However, it is always a wise decision to stick to the same company unless you have an alternative.

Better resources and a large scale of operation

Joint Ventures allow each partner to bring in greater resources and set up a large-scale business. This facilitates an effective supply chain and the offering of more diverse products and services in the large market by the company.

Shared risk

Partners in Joint Venture companies share an equal amount of profit and risk. For instance, if the business fails or suffers a loss, then both parties have to foot the bill. As all the partners are moving forward with the same motive and business objective, the risk is not narrowed to a single person.

Other benefits of Joint Venture Company Formation in Dubai –

• No requirement for personal income and capital taxes
• Full ownership of business capital and profits
• No restrictions on foreign currency
• Abundant and economic energy supply
• Competitive freight charges and import duty
• Easy to find a local sponsor for company formation
• Modern infrastructure catering to all kinds of businesses

Form your Joint Venture Business in Dubai with Shuraa

The UAE has made its policies and economy so friendly and attractive that foreign investors are highly encouraged to set up their companies in Dubai and other developed emirates. So, if you want to get started with your Joint Venture Company Formation in Dubai in the easiest way possible, then connect with Shuraa Business Setup and get end-to-end assistance for all your business concerns.

Speak with their consultants at +971 44081900 or share your queries via email at [email protected]