# USA company offer and sponsorship by distributor



## abbzia786 (Jul 29, 2013)

Hello all
I am wondering if anyone can offer advice or suggest where i post this. I am a US citizen planning to take an offer with a USA based company. Salary offer is great with AED 27000 per month, housing and schooling allowance also offered. However, this company is not registered in the Middle East as t hey have done business in the past through their distributors - their best distributor being in Dubai. They have this strategy to grow their business in Middle East by having a local presence there in the form of me. My concern is they will have this Dubai distributor in Jebel Ali Free zone sponsor me and as such, this distributor will have to fill out this new employment contract - Form 4 under JAFZA requirements. My question is - is this ok and if I should have any concerns regarding this sponsorship? Salary and everything would be paid to me by this US based company through the distributor to me.....Any other concerns I should have? Any help would be greatly appreciated......


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## saraswat (Apr 28, 2012)

So say you go ahead with this, then as far as the UAE authorities, JAFZA in your case are concerned your employer would be the distributor. 

When you say the U.S company is going to pay you, is the transactional trail going to involve the distributor ? Imho, it would, due to the system (WPS-Wage protection system) employed by the authorities out here. 

Try and find out if the setup is going to be of the kind where the U.S company pays the distributor who in turn pays you from their accounts. Or whether it is just the U.S company paying you straight into your accounts, and the distributor just sponsoring you for the visa and not paying you. 

You would have to sign the employement contract with the distributor in order to complete the visa processing, which would require them to detail the terms of payment of your wages. Which is why what I posed above is important. 

If the terms of the contract you sign with the distributor mirror the offer given to you by the U.S company, then you would have grounds for legal recourse, with the basis being the package being offered to you by the U.S company, in the case that you do not get paid. But if the terms are different (maybe they just put a low wage for processing purposes), then that amount would be the basis for any and all legal recourse available to you in case things don't go right. 

Also, in case things do go awry, the only people you could take to court as far as the U.A.E authorities are concerned would be the distributor. 


p.s: Hope this makes sense. Also just to clarify, I am not a legal expert, apart from the above I would also recommend you maybe take the advice of legal advisers based in the U.A.E


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## abbzia786 (Jul 29, 2013)

Hello Saraswat
Thank you for the response. The pay would be moderated through the distributor where in the US company would pay the distributor and then to me. I want the distributor contract to mirror the same salary and allowances terms like you said in case something does not go right. 
The US company is also looking at the option of an offshore company formation so I would realistically be this US company's employee rather than the distributor's if the distributor is to sponsor me.
Since this distributor in in the JAFZA, does my passport get held by JAFZA...as my position requires me to travel Middle East and other regions and that this can be a hassle....I am hoping that they can form a company there rather than going through a distributor...i dont think it requires a physical space....but it would give them that presence there....
Any comments would be appreciated....
Thank you again,


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## XDoodlebugger (Jan 24, 2012)

abbzia786 said:


> Hello Saraswat
> Thank you for the response. The pay would be moderated through the distributor where in the US company would pay the distributor and then to me. I want the distributor contract to mirror the same salary and allowances terms like you said in case something does not go right.
> The US company is also looking at the option of an offshore company formation so I would realistically be this US company's employee rather than the distributor's if the distributor is to sponsor me.
> Since this distributor in in the JAFZA, does my passport get held by JAFZA...as my position requires me to travel Middle East and other regions and that this can be a hassle....I am hoping that they can form a company there rather than going through a distributor...i dont think it requires a physical space....but it would give them that presence there....
> ...


It is fairly easy to establish a Dubai LLC or various Emirate Freezone companies, there are companies that would do this for you to meet the requirements at a reasonable cost.

I wouldn't be afraid of being an employee of the distributor, no SS or Medicare tax taken out that way. This of course if the US company is a decent company and the contract is what you are promised.


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## Anuraag (Apr 22, 2013)

Hey!

I guess you need to pay attention to the details of your appointment letter with the US Firm, and if it states you as an employee based offshore. This is important for your own safety. 
Also, just some information that was passed on by someone. If you are working for a FZ Company, you are entitled legally to work within the free zone and not any other area. It is a said rule and not a declared rule. You may want to look further into this aspect. 

I also agree with Saraswat about you confirming details from the US company employing you. Incase you still need some help, I could share contacts of a guy working with the DED in Dubai.. Hopefully, he should be bale to clear a few things off for you.


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## BedouGirl (Sep 15, 2011)

No company or authority can legally hold your passport so this wouldn't be an issue.


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## saraswat (Apr 28, 2012)

Bedougirl has already answered the question relating to the passport issue. 

Regarding the bit about being able to 'legally only work in the FZ' as mentioned by another member. There is a nuance to that legality:

A Free zone enterprise can sell products that it has produced/imported only in the free zones. But if the Free zone company has a distributor/agent in the mainland, then they can sell their products via the distributor/agent. 

It is entirely possible that your distributor while being incorporated in the freezone might also have a branch in the mainland, freezone companies can have branches in the mainland and vice-versa, or will have authorized agents for their products that are in-turn incorporated in the mainland. In that scenario, the products get 'exported' from the Free zone to the mainland agent who then sells them in the local market. 

As an employee of the freezone entity you are within the law to conduct business meetings and exploratory exercises in the mainland. You cannot just conduct business (make sales etc) directly to the end user/business, that has to be done via a mainland agent.

Your U.S employer can setup in the freezone's here, and you can be the sole employee of that business. All of what I have mentioned above would apply then to the new freezone entity incorporated. Depending on the freezone they choose, costs can vary anywhere from 40K to as low as 20K. That would include a flexi desk office space (shared office within the freezone business centers) and one visa, which would be perfect given your scenario. It might just be worth your and the U.S companies while to incorporate a new entity in the freezone.

p.s: One other thing, conducting business within freezones is entirely acceptable, even if the freezones are of other emirates.


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## Bulls_96 (Apr 21, 2010)

Take the job! We need more Bears fans out here!


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## Ogri750 (Feb 14, 2008)

Companies may not legally be allowed to hold your passport, many do though


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## abbzia786 (Jul 29, 2013)

saraswat said:


> Bedougirl has already answered the question relating to the passport issue.
> 
> Regarding the bit about being able to 'legally only work in the FZ' as mentioned by another member. There is a nuance to that legality:
> 
> ...



Thank you all for the great information and you as well Saraswat....really helpful...so here is where I am ....the US employer does not want to go through the distributor sponsoring me as they also realize that i have to sign a JAFZA contract through the distributor...and the US employer does not like that route...they will open an office in the free zone and lease a space...which is what they wanted to do in the near future...Offshoring is not an option as you cant get residency visas...but they will lease a space from this distributor in the JAFZA gone and go that route.....The entire territory that I will cover MENA and India/Pak...all sales will go through the proper channels of distribution...so would be more like a consultant for the company or in other words a local support for these distributors....The part that Saraswat explained about one visa and how to work outside the free zone makes complete sense now....They are in touch with a company in Dubai and are awaiting response on what the legalities and paper work are to set this up really quick.... My intent is to move to Dubai in July...hopefully i will have something official and signed with this US employer by the end of this month...as my biggest priority is to start apply for my kids schools as they are 6 and 4, knowing the long lead times.....


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## abbzia786 (Jul 29, 2013)

Just to confirm, every country will have its own distributor....one distributor may serve a couple of countries and I will be acting as the supporting person to these distributors.....


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## abbzia786 (Jul 29, 2013)

Bulls_96 said:


> Take the job! We need more Bears fans out here!


Bulls...Bears...Blackhawks here....


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## Hamid(US) Citizen (Nov 23, 2013)

abbzia786 said:


> Thank you all for the great information and you as well Saraswat....really helpful...so here is where I am ....the US employer does not want to go through the distributor sponsoring me as they also realize that i have to sign a JAFZA contract through the distributor...and the US employer does not like that route...they will open an office in the free zone and lease a space...which is what they wanted to do in the near future...Offshoring is not an option as you cant get residency visas...but they will lease a space from this distributor in the JAFZA gone and go that route.....The entire territory that I will cover MENA and India/Pak...all sales will go through the proper channels of distribution...so would be more like a consultant for the company or in other words a local support for these distributors....The part that Saraswat explained about one visa and how to work outside the free zone makes complete sense now....They are in touch with a company in Dubai and are awaiting response on what the legalities and paper work are to set this up really quick.... My intent is to move to Dubai in July...hopefully i will have something official and signed with this US employer by the end of this month...as my biggest priority is to start apply for my kids schools as they are 6 and 4, knowing the long lead times.....



I also have an American Passport, if someone can help me find a job. It would be highly appreciated. At the moment I am working in Tecom Free-zone, but I would to leave and get a better opportunity. I have 6 years experience in Customer Service & Diploma in Automotive Technology.


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## Budw (Oct 14, 2013)

Hamid(US) Citizen said:


> I also have an American Passport, if someone can help me find a job. It would be highly appreciated. At the moment I am working in Tecom Free-zone, but I would to leave and get a better opportunity. I have 6 years experience in Customer Service & Diploma in Automotive Technology.



Flashing your passport all around will not help you getting a job Hamid. Searching & applying for jobs, and good dose of networking will get you hopefully selected for that first interview!


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## Hamid(US) Citizen (Nov 23, 2013)

Budw said:


> Flashing your passport all around will not help you getting a job Hamid. Searching & applying for jobs, and good dose of networking will get you hopefully selected for that first interview!


Bud, I have tried every where you can think of. Now I'm just hoping that if anyone can me will be another American.


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## Bulls_96 (Apr 21, 2010)

abbzia786 said:


> Bulls...Bears...Blackhawks here....


My new favorite person in UAE!!!
(Sorry for hijacking thread) :fencing:


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