Dubai is home to more than thousands of expats, perhaps, it is also the location where most international businessmen prefer to set up their companies. Foreign ownership is obviously one of the most prevalent hurdles faced by expats as they proceed to establish a company or business in Dubai. Every company in the mainland that comes under commercial or industrial licenses may only have 49% ownership by an expatriate. The law states that a local sponsor in UAE is required to own the remaining 51% of the share.
A local sponsor or a local service agent is defined as a person or corporate entity that complies with the UAE company law and regulatory requirements for a foreign investor or non-UAE/ GCC nationals who wish to invest and set up a company in Dubai, Abu Dhabi, Sharjah or other parts of the UAE. In general, the sponsor hands over the complete control of the business and his authority to run its day-to-day activities to the foreign investor under a power of attorney (POA). This keeps the finances in the name of the business with the actual investor.
There are various kinds of local business sponsorships available in the UAE
The corporate sponsor could be a local or government authority, depending upon the niche of the business which the investors may wish to set up in Dubai.
As the name suggests, it has to be an individual and this type of sponsorship is suitable for establishing a commercial business in Dubai. The individual sponsor is required to hold at least 51% of the total equity shares.
The type of local sponsor is a local resident service agent and he is responsible for representing the company without holding any share. If you wish to open a professional business in Dubai, then this type of local sponsor is highly suitable.
A local sponsor or partner is helpful in supporting the company in pursuing local trade within the UAE. LLCs with a local sponsor get 100% tax exemption, and the foreign investors can liquidate 100% of their income. The companies are also entitled to enjoy benefits of opening unlimited divisions or branches across the UAE and pitching for a range of private and government ventures that are not available to free zone firms or professional services firms with no local sponsor. The foreign investors can easily get residence visas for themselves and their dependents as well.
The local sponsor is not only responsible for sharing the shares in the enterprise or company but also for some of the most important dealings listed below:
Cancellation of work visa of the employees
Cancellation of the labour status of the employees
Closing the bank accounts
Settling outstanding debt (if any)
The Local Service Agent can easily deal with the authorities on behalf of the businesses and can also facilitate the renewal processes where required. In fact, he can help the firm or the company in interpreting various contracts for business registration written in Arabic and can also sign on behalf of the foreign business partner.
Wembley Businessmen has its expertise in finding reliable local sponsors in Dubai and other parts of the United Arab Emirates (UAE). We have been known for providing the best services in Dubai mainland. We understand the requirements of the clients and various kinds of businesses and find a local sponsor accordingly. We maintain the highest level of professionalism along with confidentiality in all matters related to the documents.