As we know, Dubai is one of the best business hub and commercial capital in the Middle East. Most of the entrepreneur wants to set up their business in Dubai and other emirates of UAE because of its lavish infrastructure, low tax exemptions, rich technologically forward resources, and several company formation choices. However, As per to the United Arab Emirates law in relation to mainland business setup, the oversea traders are needed to have a local resident, a UAE national as a sponsor. So here we mention everything you need to know about local sponsor in dubai.
Start a business on your own can be quite monotonous. There are several legal aspects that require to taken care of. When it comes to setting up a business in an oversea country, the procedure gets all the more complicated. One of the most challenging things traders face while setting up a business in Dubai Mainland is the issue of oversea ownership. This is due to an industrial or commercial business requirement to have a local sponsor. Dubai is home to a massive number of ex-pats, is also a land that is largely opted by overseas traders to set up their businesses.
The foreign traders who want to set up their business in Dubai must have knowledge and clarity about they require a local sponsor for business in Dubai and what will be the repercussion. Oversea ownership is one of the most common challenges that expats face when they decide to set up a business in Dubai. The business that falls under commercial or industrial license in the mainland of the city can only be 49% owned by an expat and the rest 51 % of the stake must be owned by a local sponsor and partner.
Different Types Of Local Sponsor In Dubai
1. Corporate Local Sponsor
A corporate company that is registered and set up in Dubai can provide local sponsorship to a foreign company that wishes to set up a business in Dubai. The corporate sponsors can be any government and local officials, depending on the requirement of the business, which foreign traders wish to set up business in Dubai.
2. Individual Local Sponsor
The individual sponsor are a local resident of the UAE and can take part as a local sponsor. It is not vital for the local sponsor to be comprised of the business activity or being a business owner. This type of sponsorship is relevant for opening a commercial business in Dubai.
3. Local Service Agent As Sponsor
The local service agents are another type of local sponsor in Dubai who are the local residents and agree to act as a sponsor for the business or company in Dubai. If you are willing to open a professional business in Dubai, then this form of local sponsorship is relevant.
Things You Need To Know Before Finding Local Sponsor
Before hiring the sponsor and partner for your business, it is vital to know these things to cross-check the local sponsor. Here are some points to remember
- Check if the local sponsor is a resident of Dubai. If the local partner is not a resident of Dubai, then the traders have to travel each time for signatures or process the government formalities.
- Have a complete check of the sponsor family background. A sponsor from a well-reputed family in Dubai will be a benefit for the business as the UAE national most likely to have goodwill in the area.
- An oversea trader may have a sponsorship deed agreement verified before signing it.
- Going for a government employee as a local sponsor in Dubai will yield a better advantage for the company because of the direct connection to government agencies.
- Be clear and precise on the fees or compensation to pay to the local sponsor as wells scope of sponsors services.
- Traders may also look for advice from a business consultant in Dubai about a local sponsor. A consultant can offer information on the terms and conditions of having a local sponsor.
Work Done By Local Sponsor In Dubai
- Cancellation of employees work visa
- Closing bank accounts
- Cancellation of the labour status for employees
- To settle any outstanding debt
- The Local Service Agent can deal with the government officials and Ministries on behalf of the businesses and also facilitates the renewal procedure.
- Interpreting the business contracts for business registration that are in Arabic, the local authority is needed to understand and interpret these documents and can sign on behalf of their oversea business partner.