Q: I have a mainland general trading LLC company with a 51% local sponsor. I want to convert it to 100% owned by me and my wife. What happens if the sponsor dies? A: You may request the economic department for the provision. And if you want to make it 100% foreign shares, then you can form an FDI…

Dubai, UAE

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Can I convert the local share contribution of a company to 100% foreign ownership?

I am an Indian expatriate resident in Dubai and I have a mainland general trading LLC company with a 51% local sponsor (my partner visa is also on this company).

I want to convert it to 100% owned by me and my wife. An LSA agreement is not required in the case of an LLC company.

Can I still have an LSA agreement to protect the interest of the sponsor?

Alternatively, what if I give a 1% share to the sponsor, is this a kind of protection?

What happens if the sponsor dies?

Khaled Mahmoud Shibl

MIO Law Firm (Abu Baker Salem Advocates & Legal Consultants)

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7 Sep 2021, 08:54

Hello,

As you have mentioned that you have the LLC company through an LSA, and normally the LSA contract is submitted to the economic department, as per the agreement, the local sponsor must have a minimum of 20% profit and share.

However, you may request the economic department for the provision. And if you want to make it 100% foreign shares, then you can form an FDI.

On the death of the sponsor, you may change the local sponsor, or else the share will be assigned to his heir.

Please call or e-mail us.

7 Sep 2021, 09:32

Presently my LLC company is not through LSA, I do not have any LSA agreement at the moment.

It is with a local sponsor who has a 51 % share. If there is any agreement filed with Dubai Economic Department by my sponsor, I do not know.

I want to convert it to 100% owned by me and my wife if my sponsor agrees.

After I convert it to 100% owned by me and my wife, can I make an LSA agreement and hire my present sponsor as an LSA with the same annual fees which I am paying as annual sponsorship fees.

I am aware that a general trading LLC company even if it is owned 100% by foreigners, it does not require an LSA.

7 Sep 2021, 10:29

Yes, you can.

7 Sep 2021, 12:34

Thank you, for more detailed advice. I would contact you over email.

7 Sep 2021, 13:10

Ok, noted.

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