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Legal Advice needed for my startup in Dubai
30-Dec-2025 (In Startup Law)
I am planning to start a fitout company in Dubai with a collegue, who is an Accountant. My collegue is bringing in the Investors/Silent Partners who are going to invest 100% of the capital which is around 2.3 - 2.5 M AED. There are two silent partners but they are considered as a single entity They reside in India and won’t stay in the UAE. Me and my collegue are not investing any capital. The silent partners are friend of my college(accountant). I am one who will be building the company and run
Hi,
Since 100% of the capital is being invested by silent partners, but you will build and run the business, it is crucial to have detailed Shareholders’ Agreement and/or employment contract in your favour. Their treatment as a single entity , equity clarity , fiduciary and conflict risks everything should be discussed in detail and documented. Hence, it's advised to get more clarity and draft detail agreements.
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Adv. Vishali Verma
Delhi | 25+ Answers
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Given the structure, you must protect management control and liability. A detailed shareholders’ agreement is essential, covering equity, roles, veto rights, profit sharing, exit, dispute resolution, and UAE compliance. Avoid informal arrangements; structure the entity and documents carefully before incorporation.
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Adv. Keshav Agarwal
Delhi | 25+ Answers
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To establish a fit-out company in Dubai under this structure, a Limited Liability Company (LLC) is recommended. Since 2021, 100% foreign ownership is allowed for many commercial activities, but ensure fit-out qualifies in your specific free zone or mainland jurisdiction. Draft a robust Shareholders Agreement to define the silent partners' 100% capital contribution versus your operational control. Specify profit-sharing ratios, as these can differ from ownership percentages. Given the partners are in India, use DIFC or ADGM for legal certainty. Secure a power of attorney to manage daily operations without the investors' physical presence.
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Adv. Pankaj Bajaj
Delhi | 5+ Answers
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In Dubai, this can be structured through a Mainland or Free Zone company with a detailed Shareholders’ Agreement. Silent partners may hold 100% capital while operational control is granted to you via management agreement, powers of attorney, and reserved matters. Clearly define profit sharing, exit rights, liability, and compliance with UAE Companies Law to protect non-investing founders.
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Adv. Avinash Gaur
Delhi | 5+ Answers
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Your proposed structure raises serious legal and commercial risks if not set up correctly. Although investors are contributing 100% of the capital, you are building and running the business – yet without proper documentation, control will legally rest with the money, not effort. “Silent partners” have no legal meaning unless their rights are clearly restricted in writing, especially when they reside outside the UAE. Your non-capital contribution must be protected through equity, management rights, profit participation, and exit safeguards. This requires more than incorporation - robust shareholder and management agreements are essential at this stage. A brief legal consultation now can prevent loss of control or future disputes.
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Adv. Ayushi Priyadarshini
Delhi | 5+ Answers
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Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at lawrato.com and has been responded by one of the Divorce Lawyers at lawrato.com to address the specific facts and details.
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