Our website uses  cookies for statistical purposes.

  • Unit OT 14-44, Level 14, Central Park Offices, Dubai
  • clients(at)dubai-lawyers.net
  • +971 56 979 4813
Our Articles

Nominee Director/Shareholder Services in Dubai

Nominee Director/Shareholder Services in Dubai

Companies in the UAE must comply with specific requirements, among which having a local director. When this condition cannot be fulfilled, a nominee director can be appointed. Below, our lawyers in Dubai explain what this service implies.

You can rely on us for nominee director and shareholder services in the UAE and Dubai.

Nominee/local director and shareholder services in the UAE

Nominee services are widely used around the world, as this is a convenient service that can be employed by foreign investors. They can be used when the law requires to comply with specific requirements.

Here are the main nominee services available in the United Arab Emirates and Dubai:

  • the nominee or local director solution, which is an alternative when foreign business owners do not have a resident manager;
  • the nominee shareholder service which is optional and is used for beneficial protection reasons.

If you need any of the two services, you can rely on our law firm in Dubai which is specialized in offering such solutions. We are also at your service if you want to immigrate to the UAE and want to apply for investor visas for Dubai.

Local director services in Dubai/UAE and what they entail

According to the Company Law No. 2, which was last amended in 2015, all companies in Dubai need to have one or more directors, based on the type of structure they use. At least one of them must be a resident natural person.

The nominee director in Dubai will fulfill the role of a regular manager, with certain restrictions. Among the responsibilities of a local director in the UAE, we mention the following:

  • to act in the best interest of the company and its shareholders;
  • to represent the business in aspects in which the service provider is allowed to by contract;
  • to comply with the legal requirements imposed by the law;
  • to respect other agreements reached with the company’s shareholders.

The nominee director is usually appointed for a limited duration of time and the main situations in which such a service is used imply:

  • when upon the business registration procedure, the director to be appointed cannot be present;
  • when in a hurry to complete the company registration procedure;
  • when the director must be replaced and there is a need for an intermediary to occupy the function until a new person can be found and installed.

So, if you need our nominee director services in the UAE, do not hesitate to get in touch with us. Our lawyers are in the Dubai Bar Association.

The nominee shareholder in the UAE/Dubai

Dubai companies can also use nominee shareholder services. These are usually used when seeking ownership protection or, better said, when the identity of the real owner of the company needs to be protected.

nominee shareholder in Dubai or anywhere in the United Arab Emirates is based on a contract between the company’s real shareholders and the service provider.

Considering that in most cases, the law requires businesses to use local providers, such services are offered by professional agents or law firms in Dubai, such as ours.

Company management requirements in Dubai

According to the law, there are a few aspects to consider about the appointment of company directors in Dubai:

  • the limited liability company must have at least one director, however, when the number of shareholder exceeds 7, the company must have at least 3 managers;
  • the public company must have between 3 and 11 directors;
  • at least 20% of the board members in a public company must be women.

These are also some of the reasons for which some companies use nominee directors in the UAE.

A director’s duties and responsibilities 

Foreigners can have 100% ownership in Dubai’s free trade zones and can appoint the board of managers as they wish. Sometimes, a resident can fill in such position, but there are cases in which they decide to take this place for a proper control of the activities involved. For instance, a director is in charge of running the business in a professional manner, leading it to progress and avoiding the cases of liquidation or bankruptcy.

The company director is appointed by the shareholders, and his/her obligations are as much towards the company as towards the shareholders, who must be informed of any changes regarding the company. The director also has to seek the shareholders’ approval for certain matters and decisions. The director of a company in Dubai has the legal duty to ensure that that enterprise observes the requirements of the Dubai Companies Act. Changes in the company must be reported to the relevant authorities.

The limited liability company is one type of legal entity in Dubai that requires a company director or manager. Such companies must have between one and five managers. A limited liability company that has more than seven shareholders must also have a supervisory board. Our attorneys in Dubai can give you more information about the types of companies in Dubai and their organization.

Liabilities for company directors in Dubai

The directors of a company in Dubai are liable towards the company, its shareholders and third parties for any acts of fraudabuse of power and violation of the law or the company’s articles of association. They can also be liable for poor company managementCompany directors can have criminal liability for making false statements, entering false information on corporate documents, willfully omitting substantial information or divulging company secrets for personal gain. They are also liable for conflicts of interest that may arise during the performance of the duties towards the company.

What happens in case of insolvency?

The directors of a company in Dubai are in charge of announcing the owners if the losses exceed 50% of the share capital. They can also propose the company liquidation, especially if the losses surpass 75%. In this situation, the business cannot meet the financial liabilities, and the board on managers must file for bankruptcy within 30 days, in accordance with the provisions mentioned by the Companies Act and the Commercial Transactions Law.

If you find yourself in this position and need nominee services, do not hesitate to contact our Dubai lawyers for professional solutions. Besides nominee director and shareholder services, our lawyers can also help you open a company in Dubai.