Dubai has become an incubator of business innovation, a city full of business opportunities for all business activities globally. The Dubai government promise to helping emerging entrepreneurs and businesses. The town offers a strategic location, modern infrastructure, world-class business facilities, an investment-friendly market, and a boost for foreign direct investment. Dubai has embarked on a revolutionary path and developed guidelines that benefit the corporate industry in the best possible way.
Starting a business in Dubai or other parts of the UAE can be difficult for foreigners as they may not know the location, policies, standards, or regulatory functions. To solve this situation, the Dubai government obliges foreign entrepreneurs to have local sponsors for their businesses. Every business organization in mainland Dubai must have a local sponsor.
What is a Local Sponsor?
Dubai is home to global businesses with the best platform connecting entrepreneurs from all over the world. Dubai offers a strategic location, an investment-friendly market, and the most excellent infrastructure. The Dubai government encourages foreign direct investment and has developed business-friendly policies.
Dubai offers expatriate entrepreneurs the opportunity to do business by partnering with UAE citizens. UAE national sponsorship is important for companies on the continent, not for free-zone companies in Dubai.
Henceforth, Local sponsorship is a general term in the UAE to refer to local service providers and designated shareholders (inactive partners) in continental companies with foreign investment. The sponsor must be an Emirates (UAE citizen) with a family membership card.
A local sponsor in the UAE is an inactive partner in your company that mandates to own at least 51% of the company’s shares. He must reside in the country, have a valid passport in Dubai and participate in the benefits. However, please note that local sponsorship rules only apply in mainland Dubai, not in the Dubai Free Zone area.
Types of Sponsor
Now that we know who the local sponsors are and what their role is in Dubai based company, let’s have a look at the types of sponsorships and sponsorships available for starting a business in Dubai:
Corporate Local Sponsorship Dubai
Thus, Business organizations or companies established and registered in Dubai can offer local sponsorship to foreign companies wishing to set up a business in Dubai. The company will sponsor the foreign company and hold 51% of the shares; the remaining 49% will remain foreign. This type of local sponsorship is common and is perfect for opening an LLC in Dubai.
Individual Local Sponsor
Residents can participate as local sponsors in Dubai. Local sponsors do not have to be involved in the business or own a business. He can be an ordinary person or a civil servant, or some other person in business. This form of sponsorship is suitable if you are opening a business or commercial branch in Dubai. The individual sponsor must own at least 51% of the total equity stake.
Local Service Agent as Sponsor
The third type of local sponsorship is a local service agency willing to sponsor companies in Dubai. If you are ready to start a professional business in Dubai, this form of local support is for you.
Things to Know Before Getting a Local Sponsor in Dubai
The local sponsor may be foreigners or employees of the company or service who may have very different experiences that need to verify before hiring:
• However First of all, check if he is based in Dubai or not. If he doesn’t live in Dubai, you will need to get an autograph every time you have to edit something in a government department
• Check his family background. Having a sponsor from a well-known family in Dubai is an asset to your business as he or she may have good intentions in the area.
• Select the local emirate as sponsor
• Review the local agreement
• Get complete knowledge about the fees
• Discuss with business sponsorship in Dubai will provide information on local sponsorship terms and conditions.
Conclusion
As a result having a local sponsor in Dubai is the key to dealing with challenging business situations. Although Local sponsorship in Dubai is not an obligation but a valuable asset for the company. This rule by the Dubai government benefits the local sponsors, and the companies they employ as local sponsors are known to be the reputation of the companies they have make before.