Navigating the Sands: A Handbook to Local Sponsors in Dubai

The dynamics of the business environment and strong economy that can be found in Dubai, the UAE’s glamour girl of a city, is what attracts entrepreneurs. However, for foreign investors, the process of company formation might be slightly more complicated and may include a rather curious step, namely the appearance of a local sponsor.

Do not let this aspect discourage you from having your dream Dubai trip! The reader of this piece should have sufficient information to make the right decisions concerning a local sponsor in Dubai. We’ll delve into the who, what, and why of local sponsors, explore your options, and answer the burning question: the next thing that people often inquire about is the cost of the adoptees they wish to take in normally translated as how much does it cost?

Understanding the Local Sponsor Role

Foreign ownership is actually limited on the mainland in the UAE. Starting a restricted company that will be owned by a foreigner more than 49% requires that one gets a sponsor. This sponsor works as a UAE national or a company, which controls a minimum of half of the equity of your business.

To be more precise, the scope of a sponsor’s activities may also differ depending on the signed contract. They may occasionally guide them in terms of strategy in the local market and/or introduce them to other players in the specific market. Nevertheless, in most cases, the sponsor is passive occupying only a technical role while the actual day-to-day management is conducted independently by the sponsor’s nominee.

Local Sponsor in Dubai that can be named are:

There are two main types of local sponsors you can consider:

• Individual Sponsor: A UAE national citizen of the opposite sex to the proposed marriage, who would be the sponsor. This option can be useful if you prefer to have a local contact and help. Though, if an individual sponsor is targeted the process can take longer and usually a more elaborate agreement is needed.
• Corporate Sponsor: An Emirati national company that is based in the UAE and mostly into business in the UAE. This is preferred by foreign investors because of the clear structure and less formalities which identify the responsibility of the venture. This is because corporate sponsors generally do not participate in the day-to-day decision-making but instead monitor the organization’s legal standing.

Just How to Select the Right Local Companion

It is absolutely up to which party’s interests match your necessity, whether it be individual or corporate sponsorship. Here are some factors to consider: 

• Business Model: If your business somehow needs local market knowledge, probably, an individual sponsor will be useful. 
• Level of Control: When there is a corporate sponsor in the picture, you tend to have more working freedom as to how your enterprise is run. 
• Fees and Agreements: Individual sponsors may negotiate the amount of their fees and their conditions personally while the corporate ones are likely to have specific contracts. 

Demystifying Local Sponsor Fees in Dubai

There is no accurate formula for setting the cost of a local sponsor because this is relative to the type of local sponsor you are seeking, your business activity and the bargaining process. Here’s a general idea: 

• Individual Sponsor: It can cost anything from AED 5,000 (approx. USD 1,360) to AED 20,000 (approx. USD 5,440) per year and there can also be setup fees. 
• Corporate Sponsor: The majority of the corporate sponsor in Dubai provide their services for fees that fall between AED 15000 (USD 4080) to AED 30000 (USD 8160) annually on average. 

Other Things to consider for Local Sponsors for business in Dubai

It would be pertinent to note that the cost does not end at the annual fees. Here are some additional points to keep in mind:

• Profit Sharing: However, it is not very usual to have individual sponsors demand for a piece of the profits. Make sure that your agreement with the client takes this into consideration. 
• Visa Sponsorship: In this regard, some sponsors may avail your business visa and this could be a definite advantage. 
• Exit Strategy: Learn the procedure for terminating the sponsorship agreement and the charges that would be incurred.

Searching for a Local Sponsor in Dubai 

Several resources can help you find a local sponsor: 

• Business Consultancy Firms: Some law firms are involved in company formation in Dubai and can guide you through how to find sponsors. 
• Free Zones: Some of the free zones in Dubai are 100% open to foreign investment thus eliminating the problem of the local sponsor. It is advisable to check pertinent free zone regulations if the business model adheres to its guidelines. 
• Networking Events: Going to fairs is often a good opportunity to look for sponsors and, in general, for other business people in Dubai. 

Read more: Dubai Investment Opportunities

The Best Guide to Getting the Perfect Local Sponsor

Seeking a sponsor secures one of the significant milestones that every Dubai business requires to set up its operation. In this way, you can connect with Quick Venture to know your rights, consider the cost and other factors, as well as using the existing tools, you can apprehend the sponsorship with confidence. 

Of course, the local sponsor in Dubai can be considered one of your great allies, because he can provide you with legal assistance and, perhaps, become your gate to a new market. Now, that you understand the local sponsorship scenario, nothing can hold you back from transforming your Dubai dream into realism and Quick Venture is one of the most popular and most effective assistants that helps you to connect and interact with the Local sponsor for business in Dubai to make your task easy and stress-free.  

Feel free to contact Quick Venture consultants. Use the phone number +971 526724420 or send WhatsApp messages. You can also drop an email to info@quickventure.net