Why Choose A Local Sponsor When Setting Up Business in Dubai?

local sponsor business setup

Dubai has been an attractive place to set up a new business with its booming economy, efficient infrastructure, investment-friendly market, and reliable policies. However, there are a few requirements you need to meet first before you can successfully do business setup in Dubai. Chief among them is getting a local sponsor.

Is getting a local sponsor mandatory?

It depends upon where you are going to set up your business.

Getting a local sponsor is a mandatory requirement if you are going to set up your business in the UAE mainland. This is not the case if you are going to set your business in one of Dubai’s free zones. By law, you are required to let a local sponsor own at least 51% of your business.

What is a local sponsor?

A local sponsor is a broad term used to refer to nominee shareholders or sleeping partners and local service agents. Local sponsors should be an Emirati or UAE national who holds a family membership card.

There are different types of local sponsors. These include corporate sponsorship, individual local sponsors, and local service agents.

Why is a local sponsor needed?

There are a few reasons why you should get a local sponsor.

For one, foreign investors may not be familiar with Dubai’s rules and regulations when it comes to setting up a local business. A local sponsor can help you start your business as they already have the necessary knowledge and experience.

For example, local service agents will serve as the representative of your company. They deal with the legal requirements, prepare documents, collaborate with government officials and Ministries, and handle regular reporting. All you need to do is pay them an annual fixed fee and they will take care of the rest.

Another reason for you to get a Business local sponsorship is to fulfill the requirements of the law. Like what was mentioned earlier, Dubai mandates that any foreigner who wants to start a business in the UAE mainland should have a local sponsor.

Using a local sponsor is a great alternative for people who don’t have enough documents and would still want to pursue establishing a business in the UAE.

There are also other reasons for you to get local sponsor aside from what was already mentioned. These are the following:

  • The ability to access the local UAE market and trade locally
  • Significantly reduced tax or no tax at all
  • Able to open limitless branches of your business throughout the UAE
  • Handle local government and private projects

Obtain professional help

You just had a glimpse of what it takes to set up a business in the UAE as a foreign entity. If you need further details and specific advice, it is highly recommended that you obtain professional advice. Thankfully, Austria Business Center is here for you.

Austria Business Center helps you set up a business in the UAE. We provide expert advice as well as assistance in starting your business. Aside from setting up business in Dubai, we also provide offices and workspaces to ensure your business has the right place to grow. Give us a call today to learn more!


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    Email: office@austriabc.com
    Phone: +971 (0)4 427 3600

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