If you are planning to set up a company in Dubai on the mainland, you may need a local sponsor. There are around 2,100 different business activities listed by the Department of Economy and Tourism, Dubai. Following changes to the law, around 1,200 of these no longer require a local sponsor in Dubai. This means that there are still around 900 business activities that can only be carried out if the company involved has a local sponsor.
If you would like to know if a local sponsor is required for the business activity you have in mind, please get in touch.
The local sponsor must be an Emirati (this term is used for people who are citizens of the United Arab Emirates) male or female who has reached the age of 21. He should not own or operate a business in the same field. He owns a 51% shareholding in your company and officially represents it before all government agencies. For this, he in turn charges a local sponsor fee. This is a pre-determined, mutually agreed fee that is paid on a monthly/quarterly/half-yearly/annual basis.
Alternatively, he may agree to take a percentage of sales in exchange for his services for your company. The local sponsor may also be a company that is incorporated in the UAE and is 100% Emirati-owned.
Just because a local sponsor owns 51% of your company doesn’t mean they take home 51% of the profits. Things work differently in the UAE. The local sponsor signs a power of attorney document entrusting you with the affairs of the company.
This way, you have full control over your business. However, the local sponsor is legally responsible for all internal and external activities carried out by the company. That’s why you need to find the right local sponsor for your business in Dubai.
Need help finding a local sponsor in Dubai, UAE?
We can help you find the right UAE local sponsor (sometimes called a local partner) for your business. We have years of experience in forming companies in Dubai and the rest of the UAE. Our team of professionals have been selected for their expertise in business consulting, tax advisory, legal and corporate finance. To date, we have assisted clients in 100 countries around the world. For more details, call +971 4 295 4459 or email info@skyline-dxb.com
Local sponsorship UAE made easy by Skyline
We can connect you with the right local sponsor in Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah. Depending on the nature of your business activity, this could be an individual sponsor or a UAE company local sponsor.
