A joint venture or consortium in Dubai refers to a contractual agreement between a foreign party and a local party licensed to conduct the desired business activity. The equity of the local party in the joint venture must be at least 51%, but the profit and loss distribution can be based on the terms decided upon by the partners. Generally, no special licence is issued in the name of the company, since the license belonging to the original partner is enough for the execution of the project with the collaboration of the other partner who participates in running of the company.
In a joint venture, the partners agree by contract to share the profits or losses of 1 or more commercial enterprises, which can in the name of 1 of the partners. Contracts of joint ventures may be written or oral, and are not required to be notarized. Third parties have recourse against only the partners with whom they deal. However, all the partners are liable to the third parties should the joint venture be disclosed to them.
There is no need to license the joint venture or publish the agreement. The foreign partner deals with third parties under the name of the local partner who - unless the agreement is publicized - bears all liability. Joint ventures are ideal for companies working together on specific projects.
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