Tax & Law Strategies (International!)
The KLP activities in the fields tax & law strategies are focused on innovative offshore and onshore combinations.
Since Middle of August we are operating a moderated forum group with the topic "Offshore Destination UAE - ZERO TAX - 100% foreign ownership - free funds transfer PLUS huge markets" on the matchmaking platform XING.
HERE you can go directly to this moderated forum group. You just need to register (free of charge) on XING, or you already use XING with your own profile.
► Special: Articles of Association in UAE
Based on our own extensive experience as entrepreneurs in the United Arab Emirates, we find there to be one common issue that keeps many away from the exciting business climate in Dubai or UAE. Simply stated, the problem is one of "Local Sponsorship". We call it:
Legal Fixation of Investor's Interest inside Middle East LLCs with "Local Sponsor"
The Problem
When investing or operating in the Middle East countries like UAE, Saudi Arabia, Qatar, Bahrain and Kuwait, the laws require partnering with a National Citizen called "Local Sponsor". This takes place on shareholder level. Furthermore it is regulated that this "Sponsor" shall hold at least 51% of the share capital. But in most of the cases the "Local" doesn't invest but rather gives only his "good name" and does not usually share in the company operations risk or debt.
This law status requires various internal agreements like flat annual sponsorship fee instead of profit share, limitation of voting and acting rights and much more. It is the usual practice of local lawyers and consultants, to fix these individual agreements in "Side Agreements". We know this instrument very well as a result of our law practice in the "Western World": These "Side Agreements" remain confidential and are not part of the "legal" operating contracts which must be notarized.
"Local Sponsors" in some cases doesn't really care about the validity or regulations in these agreements. These "Side Agreements" bring into question general validity issues and potential problems as they are not recognized by the local courts, e.g. in case of disputes among the shareholders of a company. All agreements regarding physical or virtual assets and rights must be notarized. So the potential for legal and ownership issues is abound.
The KLP Solution
Based on the existing Company Laws in the Middle East and Dubai, KLP developed a detailed Contract System which makes the full legal fixation of all individual agreements possible!
- Flat fee agreements regarding profit distribution (the so called Annual
Sponsoring Fee) are being completed to the satisfaction of our clients
and legally notarized in business setups & registrations handled by KLP - The issues of stock ownership and company shares through the "Local"
is limited/ blocked all together, the agreements are being legally notarized - Majority voting rights of the "Local" can not be exercised and the
agreements are being legally notarized - Acting and authorization rights of the "Local" can not be executed by him
and are being legally notarized - Legal representation of the company is limited to the foreign shareholders
and/or the General Manager and are being legally notarized
Your investments and financial transfers are now fully protected. Later realized profits are being distributed according to the legally binding agreements that KLP develops for you - and not according to the official share quotes.
If you are interested in a business setup or restructuring of your existing company under these conditions, you should contact us immediately to hold a first consultation. This can inform us about your status quo - and you about our mandate conditions.