When starting a business in Dubai or anywhere across the UAE, finding a reliable local sponsor is crucial. A local sponsor, also known as a UAE national or Emirati, plays a significant role in facilitating the setup of your business and ensuring compliance with local regulations.
Local sponsorship in the UAE is mandated by the Commercial Companies’ Law, requiring foreign investors to partner with a UAE national to establish certain types of companies, such as limited liability companies (LLCs). Under this law, the UAE national must hold at least 51% of the shares in the company, although profit and loss sharing can be negotiated through an Investor’s Right Protection Contract.
Having a local sponsor enables you to operate in accordance with UAE laws and regulations, allowing you to take advantage of the benefits of setting up a limited liability company. Additionally, a local sponsor can provide valuable insights into local business practices and help navigate bureaucratic processes.
Some steps to help you find a suitable local sponsor:
1. Verify Legitimacy: Conduct a background check to ensure that your potential sponsor is legitimate and trustworthy. Look for sponsors with credible reputations and a solid track record in the business community.
2. Align with Operational Needs: Choose a sponsor whose expertise aligns with your business’s operational requirements. Consider factors such as industry experience, language proficiency, and network connections.
3. Discuss Terms and Fees: Clearly discuss the terms of the sponsorship agreement, including compensation and responsibilities. Ensure that you are not paying more than the standard sponsorship fee and that all agreements are documented.
There are different types of local sponsors in Dubai, including corporate sponsors, individual sponsors, and local service agents. Each type has its own set of requirements and responsibilities, so it’s essential to choose the right sponsor for your specific needs.
Your local sponsor will have various responsibilities, including assisting with legal procedures, providing signatures on behalf of the company, and offering guidance on local laws and regulations.
If you need to change your local sponsor, follow the legal procedures outlined by the authorities. This typically involves discussing the change with your current sponsor, involving other stakeholders, preparing the necessary documents, and formally applying for the change through the appropriate channels.
The cost of a local sponsor in Dubai can vary depending on various factors, such as the nature of your business, the sponsor’s level of involvement, and the duration of the partnership. On average, the annual fee for a local sponsor is around AED 8,000.
we understand the importance of finding the right local sponsor for your business. We offer comprehensive business setup services, including assistance with finding a reliable local sponsor. With our expertise and support, you can ensure a smooth and successful setup process for your business in Dubai.
