Dubai is a commercial hub that attracts entrepreneurs because of its strategic location, business-friendly environment and substantial tax exemptions. Business setup in the Emirate comes with a significant aspect of hiring a local sponsor. Before deciding to onboard one, it is important to understand the pivotal role that a local sponsor plays in Dubai.
What is a Local Sponsor?
A local sponsor is a UAE national or organisation who holds a 51 percent share of the business and ensures compliance with UAE regulations. When we talk of local sponsors, it is necessary to understand which type of sponsor is required for the business. There are two types of local sponsors, namely:
● Individual Sponsor
A person who is a UAE national and fulfils the legal requirement of being a local sponsor.
● Corporate Sponsor
A corporate sponsor in Dubai is a UAE-registered company that acts as a nominee partner.
Key Characteristics of a Local Sponsor in Dubai
Some of the roles and responsibilities of a local sponsor include:
- The hired sponsor should be involved in the business and have knowledge of the business activities. The activities differ depending on the stake they hold.
- Some of the local sponsors in Dubai have a minimal role in offering only sponsorship. While others may be actively involved in the decision-making process.
- He/she should have an understanding of his/her level of involvement in establishing a healthy partnership. A better and clear understanding will lead the business towards success.
- A local sponsor can assist with the company registration process by handling all the legal formalities on behalf of the business.
- They can help with opening a corporate bank account in Dubai as they already have knowledge about banks and their regulations.
- Hiring a local sponsor in Dubai increases effective communication among the company partners and with the government. This helps in building trusted relationships.
- A local sponsor provides valuable insights into understanding the local culture.
- The local sponsor should possess the kind of expertise needed for the business thereby reducing the time needed to train the person about the business activities.
How to Hire a Local Sponsor in Dubai?
To onboard a local sponsor, the steps which need to be followed are:
- Communicate with the person about the business requirements.
- Specify the role and discuss the fees.
- Draft the contract and get it signed.
A local sponsor in Dubai plays a vital role in establishing a business presence in the Emirate. Before selecting one, evaluating facts like whether they have a good understanding of the local culture and knowledge of legal regulations is necessary. Consulting business setup experts is highly recommended to understand the finer points.
Business Setup Worldwide has expert consultants who can help with regard to setting up your business in Dubai and finding a suitable local sponsor.