Sponsorship is an important aspect of Business Set up in the UAE. One can opt either for the local sponsors or corporate sponsors in UAE. The choice depends on a variety of factors like the purpose of business, activities associated, the investment required, and the operating jurisdiction. The nationality of the investor or entrepreneur also plays a major role. business in dubai
Local sponsors vs Corporate sponsors in UAE
The UAE government has made it compulsory to have a local sponsor who wishes to do business in the mainland. According to the laws set by the UAE government, the local sponsor should be a legal citizen of the UAE and should be the owner of 51% of shares while foreign investors can have only 49%. Local sponsorship is compulsory only when the business is in mainland jurisdiction. The above conditions are not applicable if one needs to set up business in Freezone
Finding a local sponsor while setting up a business in Dubai is not an easy task. A local sponsor in Dubai is usually an individual who is a citizen of the UAE. The Local sponsors do not have any interest in the LLC Company. At the time of legal formalities of the government like labour, immigration, and others, we require local sponsors. Therefore, the foreign investor need not worry about interference from such local sponsors.
However, the individual sponsors will have to be paid an annual fee for their services. He/she will need to move around the country for various business purposes and will be responsible for signing all-important business documents. Therefore, the best way to find a reliable local sponsor is through a business consultancy. Business Link provides a cost-effective & trustworthy sponsor for setting up a business in UAE.
In Local sponsorship, only a single individual involved. In the case of corporate sponsorship, an entire business entity involved. So, instead of an individual 51% of shares will now be held by the corporation owned by one or multiple citizens of UAE. Corporate sponsors in Dubai are business organizations fully under the ownership of UAE citizens. The Board of Directors is part of this organization.
When the business requirements are large, corporate sponsorship is one great way to get your brand running in mainland UAE. There is a limit on the number of corporations with which the partnership can be formed.
The foreign investor will have complete control over the business activities, and the corporate sponsor does not interfere. The ex-pat will have to pay a lump sum to the corporation every year. All profits made from the business will be the direct benefit of the foreign investor. The entire corporate team is also there to support your business in the UAE, which is far better than an individual sponsor. The risks involved are much less with corporate sponsors but they are a costly affair.