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Nominee Arrangement in Dubai
Dubai is one of the most popular places in the world for entrepreneurs, investors and multinational companies. With its great location, strong economy and low tax regime, Dubai is often the entry point for expanding into the Middle East and beyond.
When setting up a company in the UAE, you may hear the term “Nominee Dubai”. Many investors look for nominee services to protect their privacy, make the setup process easy and meet the legal requirements.
In this comprehensive guide, we will walk you through everything you need to know about nominee shareholders and directors in Dubai, what they are, why they exist, how they work, their advantages and disadvantages and how to choose the right legal partner, who can assist you in the process.
At DY Lawyers and Legal Consultants, our specialized nominee arrangement services provide a robust, legally sound structure that separates beneficial ownership from the legal ownership, giving you peace of mind and complete operational security.
1. What is nominee arrangement in Dubai?
Nominee arrangements are legal and used to protect privacy, comply with local laws, and safeguard the owner’s share from external risks.
A nominee shareholder holds shares in a company on behalf of the actual owner, who retains all economic power, rights and benefits. The nominee acts upon the instructions of the beneficial owner and is legally bound to act in the best interest of the beneficial owner.
These nominee arrangements can be formalized through various legal instruments such as nominee/ beneficial ownership agreements, share pledge, or trust deeds.
This agreement ensures that the nominee hold the share only in name and does not have any actual real claim to the shares or company assets. They also protect the privacy of the beneficial owner and ensure that the nominee does not participate in the company’s administration.
2. What is a share pledge?
A share pledge is your legal safeguard confirming that all shares held by the nominee are pledged in beneficial owner’s favour. It prevents the nominee from transferring or using the shares without the actual owner’s approval. If the nominee breaches any term of the agreement, the actual owner can instantly reclaim full ownership.
The pledge may also be officially registered (for example, with RAK ICC, UAE) for extra legal protection. Supporting documents like a Declaration of Trust, Undated Share Transfer Form, and Board Resolution are also executed with further confirm the actual owner’s control.
In Simple Terms:
The nominee keeps the actual owner’s name off the public record, and the pledge guarantees them full control over the company. Together, they provide both privacy and legal protection ensuring no one can act against the interest of the actual owner.
3. What are the key advantages of nominee services in Dubai?
It is a very common question that if foreign investors can now own companies, why do nominee services still exist? The answer is that the nominee arrangement has a lot of advantages. Such as:
• Confidentiality:
Some investors don’t want their names to appear publicly as owners or directors of a company. Nominee services allow them to keep their investments secret, specially, if they have multiple business ventures.
• Simple setup:
Using a nominee makes the setup simple, even for investors who are not familiar with UAE laws. It is the Nominee who appears on the documents while the beneficial owner controls the operations in the background.
• Risk management:
The identity of the beneficial owner can be protected from unwanted attention or legal complications, provided that the agreements are properly structured.
• Meeting UAE requirements:
In certain sectors or jurisdictions, foreign investors may still need a UAE national or local presence. The nominee setup help meets these local requirements.
• Strategic positioning:
For the investors who don’t want to disclose their identity the nominee set-up provides quick entry point for them.
4. The legal framework for nominee services in Dubai
In this section, we will understand the legal context which revolves around the nominee set-up in Dubai.
• Declaration of Nominee Relationship:
Companies and individuals must declare any nominee relationships. If they do not, it may be treated as a violation of AML and Tax Evasion Laws. Business owners and companies should understand that having an undeclared nominee arrangement can put them at serious legal risk and make them liable for penalties or other consequences.
• Beneficial ownership rules:
UAE regulations now require companies to disclose their ultimate beneficial owner (UBO) to authorities. This ensures transparency and prevents misuse for money laundering.
5. What are the types of nominee arrangements in Dubai?
There are two main nominee arrangements used in UAE corporate structures.
1. Nominee shareholder
A nominee shareholder in Dubai is a person (or corporate entity) who holds shares on behalf of the beneficial owner. Their name appears on the trade license and company documents.
They sign a nominee shareholder agreement, transferring all rights, profits and control back to the beneficial owner. They usually cannot claim company profits until and unless authorized.
How it works? A typical nominee shareholder arrangement in Dubai involves:
• Appointment: The individual is appointed as the shareholder of the record.
• Agreement signing: Both parties sign a legal contract confirming that the beneficial owner retains all the rights and powers.
• Trust deed/ power of attorney: Provides additional security by allowing the real owner to override the nominee’s role if needed.
• Profit transfer: Company profits are contractually directed to the beneficial owner.
• Withdrawal clause: If the nominee withdraws, the agreement ensures replacement without loss of ownership rights.
• Declaration before authorities: It is mandatory to declare such arrangement before the authorities.
2. Nominee director
A nominee director in Dubai is appointed to the company’s board but acts under the instructions of the beneficial owner. Their role is mainly administrative. They may attend board meetings but do not make independent decisions. They also provide legal cover while the real control remains with the beneficial owner.
How it works?
• Detailed legal agreements: Draft contracts clearly limiting the nominee’s powers and outlining indemnities.
• Use licensed providers: Work only with established businesses setup firms or law firms offering nominee services.
• Retain financial control: Keep company bank accounts, seals, and contracts under the beneficial owner’s authority.
• Regular reviews: Update agreements annually in line with UAE ever-evolving law.
• Compliance with UBO rules: Always disclose the real beneficial owner to authorities to avoid penalties.
6. Nominee services provided by DY Lawyers and Legal Consultants
• Nominee Agreements and Declarations of Trust
• Providing Nominee Arrangements
• Drafting of Nominee, Shareholder and Loan Agreement
• Corporate Restructuring
• Banking & Compliance Documentation
7. Why Choose DY Lawyers and Legal Consultants?
At DY Lawyers and Legal Consultants, we combine experience and knowledge to provide nominee services in Dubai.
• Expertise in Nominee shareholder director services.
• We draft strong legal documentation to protect beneficial owners.
• We ensure compliance with UBO disclosure laws, avoiding future risks.
• We provide both, full business setup and banking services.
8. Conclusion
At DY Lawyers and Legal Consultants we provide a structure which is fully compliant with U.A.E regulations. All beneficial ownership filings are made privately with authorities (which are not publicly accessible). The purpose of this type of structure is lawful confidentiality, not tax evasion or concealment of illicit activities.
Our goal is to help clients protect their identity, simplify business setup and operate with complete peace of mind.
Contact us today at:
https://dylegalconsultants.com/
Or call us at: +971551470302
to avail the services and get tension and risk-free today.