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UAE National Sponsorship Services

Foreign entrepreneurs in Dubai get the comfort of doing business by collaborating with UAE nationals as business partners. The UAE Civil law and Commercial Companies law necessitates the participation of a local sponsor in the UAE mainland company formation. That is, for a mainland business, an expat business owner needs a UAE national sponsor. The local sponsor is either a UAE national or a company fully owned by UAE nationals. The local sponsor may also serve as an LSA or a Local service agent. The foreign company is required to pay a yearly fee for the services offered by the local service agent.

The term UAE national sponsor refers to a patron of UAE citizenship (Emirati) with a family membership card and a valid Dubai passport. The UAE national sponsor or local sponsor owns 51% of the total shares of the company in Mainland LLC company formation and it is mandatory. However, this is not applicable for Professional companies and Representative Office setup in UAE. The foreign or expat investors have 100% ownership of the company in the case of Professional or Representative Office set up.

The local sponsor has no role or involvement in the daily operations of the company. The local sponsor serves as an intermediary between the company and the UAE government and helps the company pursue various official formalities. The official formalities include immigration and visa approvals, license issuance formalities etc. The UAE national sponsor, corporate sponsor or local service agent can be a total stranger with entirely different backgrounds. TQM Marketing Management is one of the leading business consultants in UAE helping expat entrepreneurs to find a local sponsor for their business venture. We help you to choose a reliable local or UAE national sponsor as your business partner.

Businesses that require a UAE National sponsor in Dubai

Mainland businesses with a Limited Liability legal structure require the services of local sponsor in the UAE. This means that the foreign investors who are planning to set up a Limited Liability Company in the UAE are in need of a local sponsor. And this is a mandatory legal requirement. The business initiatives that require the services of a local service agent are listed below.

Real estate

Textile firms

Logistic and cargo firms

Industries that require manufacturing and industrial license

Advertising firms

Trading firms

Electronics and equipment industries

Oil and natural gas industries

Jewellery concerns

Types of Sponsorship in UAE

Individual local sponsor

The individual local sponsor is a UAE national who holds 51% of the total share of the company. The remaining 49% goes to the foreign national. The individual local sponsor has no gender-based restrictions. The individual local sponsorship must be entrusted to a reliable and accountable individual for the smooth functioning of the business. It is not mandatory that the individual partner should take part in the business operations of the company. Individual local sponsorship is ideal for establishing commercial endeavours, manufacturing firms in Dubai or UAE.

Advantages of individual local sponsor

  • Cost-effective means of sponsorship option

  • Scope for enhanced business opportunities via the local sponsor

  • Aids in accomplishing official formalities

Drawbacks

  • The availability or physical presence of the sponsor does matter. If the UAE national is out of station for long or is a frequent traveller, it may negatively affect the business.

  • Sudden and unfortunate scenarios like a sponsor’s death or prolonged health issues can cause delays.

Corporate sponsorship

The LLCs based in the UAE may take advantage of Corporate Sponsorship. In such a scenario, a corporate establishment serves the role of an individual local sponsor. The corporate sponsorship ownership rights are identical to Individual sponsor rights. 51% of the total share of the company is owned by the Corporate entity. The foreign national enjoys 49% of the share. The corporate establishment comprises a Director board and a power of attorney. The power of attorney is the authorized representative of the company and has the authority to speak on its behalf. However, civil companies or a branch of an overseas company cannot avail Corporate sponsorship. Corporate sponsorship offers multiple benefits for the company that avails sponsorship in the UAE. The major benefits are connected with transparency and responsibility. Availing corporate sponsorship also creates a more favourable environment for facilitating leadership changes in the company. The added benefits are listed below.

Advantages of availing a Corporate sponsor

  • Enhanced legal security due to stringent norms and contracts.

  • No Individual sponsor uncertainties.

Drawbacks

  • Corporate sponsorship can be costly affair

Local service agent

A local service agent is ideal for sole establishments, professional companies or branch office. The local service agent or LSA is a UAE national. The LSA does not hold any ownership rights in the business nor take part in the day-to-day business affairs. 100% ownership rights are held by the foreign national. The LSA serves as an intermediary between the company and the government agencies and facilitates official talks and meetings on behalf of the business concern. The LSA offers this service for an annual fees based on an agreement. The license renewal procedures are initiated by the LSA.

Advantages of availing a local service agent

  • LSA appointment can be pursued online

  • LSA handles all administrative tasks related to government agencies.

  • Full ownership benefits

Drawbacks

  • Appointing a competent and reliable LSA can be a tough task

  • The unavailability of LSA can cause unnecessary administrative delays.

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