Local sponsor in Dubai Everything you need to know
There was a time when any non-GCC national wishing to start a business in the Dubai mainland would require the services of a local sponsor. However, things have changed in recent years meaning that 100% foreign ownership of UAE mainland business is permitted in many cases.
That said, this is not possible in all industries. And even in those where it is allowed, permission is required – and it can be denied.
The good news is, if you do require a local sponsor, with the right help, finding one can be fast and straightforward. In this article, we'll explore the key factors you need to consider along the way,
Local sponsor in Dubai – what does it mean?
A local sponsor is appointed by an overseas investor to hold a 51% stake in a UAE business. While the sponsor holds a controlling stake, they have no decision making power and do not interfere with day-to-day operations.
They also do not take 51% of the profits. Instead, sponsors are paid an annual fee for their services. Sponsors can be individuals or corporate entities.
Finding a local sponsor in Dubai
Finding and appointing a local sponsor should not be taken lightly, as you will need a strong and trusting relationship with your sponsor.
Types of local sponsors
There are three sponsor categories: individuals (UAE citizens over 21), corporate entities (government-licensed businesses), and local service agents for professional services businesses.
Duties of a local sponsor
The primary duty of a local sponsor is to act as your representative in all dealings with government and official bodies.
How to change local sponsor in Dubai
The process involves notifying your current sponsor, gathering documentation, and attending court to dissolve the sponsorship.
Getting a Dubai trade license without a local sponsor
Alternatives include professional services businesses, mainland businesses outside regulated industries, or setting up in a free zone.