How to Find a Local Sponsor in UAE – A Step-by-Step Guide

local sponsor in UAE

Starting a business in the United Arab Emirates (UAE) is an exciting opportunity, but it comes with a challenge – finding a reliable local UAE Sponsor. This challenge is especially tricky if you’re new to the country. If you want to start a business in Dubai or any other emirate in the UAE, you need to understand How to find a local sponsor in UAE and his all details before team up with him.

Why is finding the right local partner so important? Because if you choose a wrong person, he can lead to problems in managing your business. Before we dive into the process of finding a local partner for your business in Dubai, let’s understand why it’s necessary.

What is Local Sponsorship in UAE?

In simple terms, local sponsorship in the UAE means joining forces with a UAE citizen, also known as an Emirati. The commercial companies’ law requires that when you set up a (LLC) limited liability company, you must have a local business partner.

The local sponsorship in UAE is based on Article 10(1) of Federal law No.2 of 2015, the UAE national must own at least 51% of the company’s shares. However, keep in mind, it doesn’t mean they share your profits or losses. You can customize your partnership terms through an Investor’s Right Protection Contract.

Why Do You Need a Local Sponsor?

To do business in Dubai or anywhere in the UAE, you must have a local partner. This is crucial to comply with UAE business laws. Having a local partner also gives you benefits when operating as a limited liability company.

How to Find a Local Sponsor in the UAE?

Now that we know why a reliable local partner is essential, let’s look at how to find the perfect fit for your business in Dubai:

Step 1: Check Legitimacy

Before making any agreements, especially with an individual local partner, do a thorough background check. Make sure you’re satisfied with their credentials and reputation. Corporate partners from reputable families or advisors like Shuraa are good choices.

Step 2: Match Your Needs

Choose a local partner based on your business needs. For example, if you plan to work with the government or on government projects, consider partnering with someone who has government experience. Make sure they can communicate effectively in the language you need.

Step 3: Discuss Terms and Fees

Have an open discussion about fees, compensation, and the benefits of your partnership. Keep records of your negotiations and be cautious not to overpay. Some people may claim to have a large business network, so do your research to verify their claims.

Types of Local Sponsors in Dubai

Types of Local Sponsors in Dubai

If you can’t meet the criteria for 100% foreign ownership in Dubai, you’ll need a local partner. There are different types of local partners to choose from:

Corporate Local Sponsor:

This could be a government entity or a local organization willing to partner with you. They must own at least 51% of the shares in your company.

Individual Local Sponsor:

Some entrepreneurs prefer an individual local partner. They usually don’t get involved in day-to-day operations but must still own 51% of the company.

Local Service Agent as a Sponsor:

If you want a professional business license and plan to offer services in the UAE, a service agent can serve as your local partner.

Responsibilities of Your Local Sponsor in Dubai

Your local partner does more than just own 51% of your company. They also help with various important tasks, such as closing bank accounts, settling debts, renewing licenses, and more.

Changing Your Local Partner in Dubai

If you need to change your local partner in Dubai, follow these steps:

  1. Talk to your current partner and try to resolve any issues.
  2. Discuss with other stakeholders in your business.
  3. Prepare the necessary documents and submit them to the relevant authorities.
  4. File an application to change your partner.
  5. Find a new local partner, making sure to choose someone reliable.

Local Sponsor Costs in Dubai

The average cost or fee of a local partner is around AED 8,000 per year. However, the final fee depends on factors like your business type, the local partner’s involvement, and the partnership duration.

Does Your Business Need a Local Sponsorship in the UAE?

According to the law, anyone starting an LLC company in the UAE must have a local partner. This requirement applies to various businesses, including trading, contracting, real estate, advertising, and more. To check if your business needs a local partner, consult an expert.

The Best Way to Find a Local Sponsor in the UAE

If you’re looking for a UAE local partner, consider Nam Corporate Business Setup. We specialize in securing partnerships that protect your interests and give you full control of your business. Our legal team creates strong protection contracts, and we offer best PRO services. For personalized guidance, contact us our business setup consultant through our website or at +971543016436. However, you can also WhatsApp us or reach us via email at info@namcorporate.com.

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