Disagreements with UAE Shareholders

Operating a limited liability company in the UAE requires UAE nationals to hold a majority shareholding in the company. As such, foreign investors must enter into partnership with a local party. In some cases, disagreements between shareholders can occur, particularly if the so called "nominal shareholders" wish to enhance their share of the economic interests or to increase their involvement in the operation of the company. In this article, Elsie Habib provides foreign investors in limited liability companies with primary settlement options should things turn sour.

In brief

• Foreign investors traditionally enter into partnership with UAE national shareholders in order to comply with the provisions of the UAE Federal Law No. (8) of 1984 concerning the Commercial Companies (as amended) (Companies Law).