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384 Sustainable Cities and Communities Design Handbook

and international parties can agree to use the DIFC Courts in the event of a
dispute (the parties should then agree to incorporate the jurisdiction of the
DIFC Courts into their contracts before taking the dispute to the DIFC
Courts).
The expansion of DIFC Courts jurisdiction represents an important policy
shift and will give the business community an unprecedented access to the
DIFC Courts. The move is likely to be welcomed by both the legal and
business communities, since international parties may be more likely to wish
to resolve their disputes in a more familiar forum that uses the common law
English model. 32
One of the crucial decisions that entrepreneurs need to make to set up their
business entity is to choose the appropriate legal form of conducting business
activity. The way the business is structured and operated will most likely
influence the access to future financing opportunities. 33 It is essential for the
potential business owner to understand how each legal structure works and
then pick up the one that best meets the entrepreneur’s needs. Each business
form has its own unique legal and financial ramifications; therefore it is
advisable that the choice is made in conjunction with a lawyer and an
accountant. The choice of the form of business organization can have a great
impact on the success of the business. It may influence:

l how easy it is to obtain financing;
l how taxes are paid;
l how accounting records are kept;
l whether personal assets are at risk in the venture;
l the amount of control the owner has over the business, etc.
Foreign investors can choose between several types of cooperation and
partnerships for conducting business in the UAE. Entrepreneurs can also
conduct business activity through the UAE branch office. Limited Liability
Companies (LLCs) are more commonly used by the foreign investors.
The UAE company law determines a total local equity of not less than 51%
in any business entity. Moreover, it defines seven categories of business or-
ganization that are allowed to be established in the UAE:
1. General Partnershipdformed by two or more partners who will be
jointly liable to the extent of all their assets for the company liabilities.
2. Simple Limited Partnershipdformed by one or more general partners
liable for the company liabilities to the extent of all their assets, and one or
more limited partners liable for the company liabilities to the extent of their
respective shares in the capital only.

32. See footnote 30.
33. Sitarz D.: The complete book of Small Business Legal Forms, third Edition, Nova Publishing
Company 2001, Carbondale, Illinois, USA, pp. 21.