It is therefore recommended that the parties, under the contract law of the United Arab Emirates, conclude full agreements before establishing a commercial relationship. As a result of the NSA or tacit agreement, the UAE citizen turns into a silent registered owner of shares or a "silent partner", while the foreign investor insures all economic interests on those shares. Having a "dormant partner" means that the investment in the activity that concerns the creation and operation of the company is entirely carried out by the foreign shareholder and that the national shareholder of the United Arab Emirates acts only as a local sponsor. The vae-citoyen only offers the company administrative support, for example. B links with the authorities and the organisation of visas. An annual sponsorship fee is therefore agreed between the party, paid to the sleeping partner. Although the Protocol of Association (MOA) and the company`s business license may de jure reflect the ownership of the parties, ancillary agreements help the foreign shareholder protect their interests and ensure that they have control of the business. The importance of a precise and valid contract should not be underestimated in transactions between the parties. It is generally accepted that treaties generally take the form of long and complex legal documents. However, contracts can be short and simple written documents, or even take the form of an oral agreement. Therefore, we can say that the Dubai Court of Cassation has made it clear that the only way to prove something in contradiction with the MOA is to document the ancillary agreement in writing. After all this, it should be noted that it is always certain to avail oneself of ancillary agreements, since the courts recognize them, insofar as they are written In accordance with article 252 of the Civil Code, there are certain exceptions to the general rule provided for by the legal doctrine that follows this law.
a contract may confer a right on a third party. However, such an agreement must not impose an obligation on a third party. This ensuing debate also led to the adoption of the federal law called the anti-fronting law, the aim of which is to prohibit ancillary agreements with UAE nationals. Failure to comply with the provisions of the anti-fronting law is punishable. Under the anti-fronting law, there are also criminal consequences for repeated offenses. It is important to note that the penalties imposed under the Anti-Frontage Act apply to all persons who are parties to such ancillary contracts. Although the general intent of contract law is that an ancillary agreement creates legally enforceable rights and obligations and has the same force as the underlying main contract. But this is by no means guaranteed. In some cases, courts have challenged the validity of an ancillary agreement and found that an ancillary agreement had nothing more than a moral effect.
Therefore, ancillary agreements (usually between two parties) should be carefully crafted. Ancillary agreements are often used in commercial contracts, especially in the context of financial or real estate transactions. An ancillary agreement is usually in the form of a letter signed by the signatories of the main contract. For an ancillary agreement to become binding, it must meet the same standard that all contracts must meet, that is, there should be an offer, acceptance, consideration, security, and the intention to establish a legal relationship. . . .