Do You Need a Sponsor to Start a Business in UAE?

A lot of people wanted to initiate a UAE business setup process. After all, UAE is filled with so many business opportunities and a lot of benefits are available for those who wish to start a company here.

However, there’s one common question being asked by people who wanted to start a business in the UAE. They wonder, “Do I need a sponsor?”

Let us take a deeper look at this question:

What are local sponsors?

Local sponsors are also known by other names such as local service agents, sleeping partners, and nominee shareholders. A local sponsor is called local because they are UAE nationals. To get a person become your sponsor and set up company in Dubai mainland, you usually pay them an annual fee based upon your agreed contract.

There are three types of local sponsorship in the UAE. These are the following:

• Individual sponsorship
• Corporate sponsorship
• Local service agent

Some local sponsors don’t simply act as a passive partner. For example, most of them represent business owners to the specific government department and authorities. They help in setting up businesses and ensures that foreign business owners get the necessary guidance on local laws, regulations, and even cultural norms.

When you will need a sponsor?

Having a local sponsor is a mandatory requirement for any foreigners who wished to establish a business in the UAE mainland. The sponsor should be a UAE national and should own at least 51% of your company.

When you will not need a sponsor?

If you are setting up a company in one of the free trade zones of the UAE, then you won’t need a local sponsor. In fact, companies in a free zone can have 100% ownership of their shares. The only drawback is that free zones can’t trade and do business outside of their designated free zones. This means that they can’t directly do business in the UAE mainland.

Finding the right local sponsor

Because of the great importance of having a local sponsor, it is crucial that you get the right one. Sometimes, the success and efficiency of your business setup could depend on your local sponsor. Thankfully, you can find the right local sponsor by getting in touch with Austria Business Center.

Austria Business Center offers business solutions that include licensing, sponsoring, and partner sourcing. We have the right experience and expertise to assist you in setting up a company in Dubai. Not only that, but we also provide office space for companies of various sizes. Give us a call today!