Individual Or Corporate Sponsorship
Business Setup in the UAE: Individual and Corporate Sponsorship Services In the UAE, individual and corporate sponsorship services have traditionally been essential for setting up a business. However, with the introduction of 100% foreign ownership for mainland companies, these services are now optional.
Opting for a local partner can still offer unique advantages and benefits, which we have been diligently exploring over the past few years. To understand how adding a local partner can enhance your business setup, we recommend speaking with one of our experts.
Contact our team today to learn more about how we can support your business journey in the UAE. Individual Sponsorship Individual sponsorship involves a UAE national (Emirati) acting as a local sponsor for foreign investors looking to set up a business in the UAE mainland.
Key Features:
1. Local Ownership Requirement: For some specific types of business activities in mainland, 51% of the company’s shares should be held by a Local Sponsor or UAE National and for the rest of the activities, it is optional depending upon the need of the business. Shareholding percentage starts from 1% onwards.
2. Legal Compliance: Ensuring legal and regulatory compliance in the UAE is crucial for foreign-owned businesses. A local sponsor can act as an intermediary between your company and various government authorities, providing essential liaising services and helping to overcome language barriers. This ensures your business meets all UAE legal requirements for foreign ownership and operates smoothly within the regulatory framework.
3. Flexible Arrangements: Agreements can be tailored to provide the foreign investor with operational, financial and majority control of the business while the sponsor holds the necessary legal ownership to comply with the local regulations.
Corporate Sponsorship Corporate sponsorship involves a UAE-based company acting as the local sponsor for a foreign business.
Key Features:
1. Corporate Shareholding: The UAE company holds a portion of the shares in the new business
2. Professional Structure: Often preferred for larger companies or those requiring a more structured sponsorship arrangement.
3. Enhanced Credibility: Association with an established local company can enhance the credibility and networking opportunities for the foreign business.
4. Perpetuality: With the local company acting as a sponsor, the continuity of your business is ensured. In the event of the local partner's demise, the stability and ongoing operations of your company remain unaffected.
Local Service Agent In the UAE, a Local Service Agent (LSA) is a UAE national or a UAE-owned company appointed to assist foreign investors in setting up their businesses. While the LSA does not have any ownership or management stake in the company, they facilitate the company's compliance with local regulations and provide administrative support. This includes liaising with government departments, handling paperwork, and overcoming language barriers. The LSA arrangement is common in specific business structures, such as professional service companies.
Services Provided by Sponsors Whether individual or corporate, sponsors and local agents typically offer a range of services to support the business setup process:
1. Trade License and Registration: Assistance with obtaining the necessary trade licenses and business registrations.
2. PRO Services: Public Relations Officer (PRO) services for handling government paperwork, visas, and other administrative tasks.
3. External Approvals: providing assistance in obtaining necessary external approvals for certain businesses such as RERA, Municipality, Police, Civil Defense, SIRA or any of such external government agencies.
4. Office Space: Assistance in finding and leasing suitable office space.
5. Ongoing Compliance: Ensuring ongoing compliance with local laws and regulations. Choosing a Sponsor or Local Service Agent When selecting an individual or corporate sponsor, consider the following:
• Reputation and Credibility: Ensure the sponsor has a good reputation and established credibility in the market.
• Experience: Prefer sponsors with experience in your industry.
• Transparency: Clear and transparent terms of the sponsorship agreement.
• Support Services: Availability of comprehensive support services, including PRO services, legal assistance, and business advisory.