If you are an outsider and would like to setup a business and or a company in Dubai you have to have a local sponsor or a service agent. Sponsor in United Arab Emirates are very important. You must have a sponsor even if you are visiting Dubai. A sponsor is a person or the company who take your responsibility in front of authorities to bring you in the country for the purpose of visit, employment, job or business.
As per law in United Arab Emirates when you are setting up your company in mainland you are required to have a local resident, a UAE national as your sponsor and he/she should hold the 51% of your business. Sponsor does not involve in company’s administration mostly and is agreed upon yearly charges according to the contract. There are some case where you can do side agreements with the local sponsor but those contracts would not be admissible in court should you ever have to go to the court for any settlement. The investor or the expat holds 49% of the shares but profits and loss can be divided regardless of the percentage of shares. Expat can have the power of attorney and work independently without being interfered in organizational matters.
This doesn’t apply to the companies and foreign businesses in free zone. In free zone the free zone acts as your local sponsor and does not own anything in your company. Free Zone Company can be fully owned by the investor.
Types of sponsors
A sponsor can be anyone, it can be a person or it can be UAE own company. Sponsorship in UAE can be divided up to three types.
Local service agent
This type of sponsorship works when a UAE own company holds the 51% of share of a foreign group or a company.
This type of sponsorship works when a UAE national on individual level holds the 51% of a foreign company’s share or in a foreign business. That individual can be the businessman, government employee or professional.
Local Service agent:
For all professional service licenses holding business you need a local service agent who does not hold any percentage from your business, infect, he or she will deal with the authorities and help you setup your business in returns of service fees.
Necessity of sponsor in United Arab Emirates
Importance of sponsorship can be measured by the fact that government has mandated by law to have a sponsor for foreigners for dong any activity from entering in to the country to end the business in UAE.
For foreigners in UAE having a sponsor is required by law
Sponsor is required for entering in United Arab Emirates
If you are willing to visit United Arab Emirates you need sponsor
If you are trying to setup a business in United Arab Emirates you would need the help of local sponsor
If you are entering United Arab Emirates for employment purpose you are required to have a sponsor.
You need sponsor or if you are service professional as service agent who will take care of all the dealings with the local authorities
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