Joint ventures (JVs) remain a common and often effective route for businesses seeking to enter or expand within GCC markets, particularly the UAE, KSA and Qatar. While legal and commercial negotiations typically focus on ownership structures, governance rights and profit-sharing arrangements, employment issues are frequently just as complex and, if not properly managed, can become a source of material risk.
In the UAE, KSA, and Qatar (as well as generally across the GCC and wider Middle East) these arrangements operate within the framework of the respective labour laws governing private sector employment and establishing the rights and obligations of employers and employees. Those frameworks share common themes, including work authorisation, employer sponsorship or registration, wage payment controls, statutory leave, termination rules and employee duties, but the detail differs by jurisdiction and should be checked carefully when structuring the JV.
Within this framework, the use of seconded employees, the allocation of control over key personnel, and the management of employment obligations within a dual-shareholder structure require careful consideration from the outset.
A central feature of most JV arrangements is the allocation of rights to appoint senior management. This commonly includes C-suite roles such as Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer. These rights are usually set out in the...
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