Local Sponsor in Dubai, UAE

To set up a business in Dubai mainland, you must appoint a local sponsor to avoid any hassle. However, selecting the right sponsor for your business is a difficult task. This article looks into the role of a local sponsor, roles and responsibilities and other essential details which you need to know. Read on to learn more. 

Local Sponsor and its Role in Dubai?

A local sponsor is an individual or entity that collaborates with a foreign investor to establish your business in a preferred jurisdiction. They are typically used to connect foreign investors with the government.

For your mainland company formation in UAE, you must have a local sponsor. The local sponsor must be Emirati and should hold 51 percent of the company shares.

It must be noted here that a local sponsor is also known as a local service agent, silent partner or beneficial owner. When you hire a local sponsor, you need to consider certain factors and understand the intricacies involved in the process. 

Why do you need a Local Service Agent in Dubai?

If you wish to establish a Limited Liability Company (LLC) in Dubai, you must hire a local service agent. A local service agent will manage administrative and legal matters and help you secure licenses and visas for your business. They will also assist you and your family in obtaining a residency visa in Dubai.

Who can be a Local Sponsor for your Business in Dubai?

Dubai allows entrepreneurs like you to choose between three types of local sponsors -

• Individual Sponsorship - A UAE citizen can sponsor your business and hold 51% of shares. Your local sponsor does not have to engage in business operations. 
• Local Service Agent -  In this case, the local agent acts as your company’s representative without owning shares. This type of sponsorship is ideal for professional company formation in Dubai.
• Corporate Local Sponsor - A UAE corporate organisation, either a local or government authority, will hold maximum shares of your company. Corporate local sponsorship is standard when establishing a Limited Liability Company Formation in Dubai.

Roles and Responsibilities of a Local Sponsor

A local sponsor plays a beneficial role when it comes to business incorporation. Some of the roles are responsibilities include- 

1. Sponsoring and cancelling of staff’s work visa.
2. Build connections with top players in the market.
3. Offer legal aid
4. Clear debts.
5. Provide insights to boost business operations.
6. Assist with obtaining registration, licenses, and permits.

How to Choose a Local Sponsor in Dubai?

When selecting the right local sponsor for your business in Dubai, you must thoroughly know your business activity, structure and sponsorship options. Read the process below -

1. Understand your sponsor and their agenda to ensure your thoughts align.
2. Discuss the fees, legalities, benefits, authority in the company and compensation package.
3. Draft a contract that specifies the understanding between you and your local sponsor.

Cost Incurred for a Local Service Agent in Dubai

The cost incurred for a local sponsor in Dubai varies based on factors such as business activity, participation of the local service agent in operations and legalities and the duration of the collaboration.

A local sponsor in Dubai is a valuable asset that every mainland company must have. Contact our team of experts and let them take care of the legalities for hiring a local sponsor in Dubai.