Setting Up a UAE Company

    First-time entrepreneurs often ask whether they need a local sponsor (nominee shareholder) in the UAE. There are a lot of factors that will determine if corporate sponsorship is a requirement, including the type of business you want to set up and your nationality.

    Non-Gulf Cooperation Council (GCC) nationals who want to secure an industrial or commercial licence in the UAE will need a local sponsor as part of the company setup. But if you want to set up your business in a free zone or if you have a professional service licence, then this is not a requirement.

    If you do require a local sponsor or you would like to access the benefits of a mainland sponsorship, then Start Business Advisory is available to help. We can find a notable corporate nominee that will act as your 51% sponsor in the UAE, so you don’t have to spend time searching for and building a relationship with a potential sponsor.


    What Are The Benefits Of Corporate Sponsorship In The UAE?

    Complete autonomy

    The corporate sponsor will remain as a ‘silent partner’ who will not interfere with how you run your business, despite holding 51% of the shares. This ensures you can manage the company as you please in terms of your staff, service and customers.

    No hassle option

    Start Business Advisory take care of everything on your behalf, so you don’t have to take critical time out of your schedule to communicate with government authorities to get things started.

    Strong legal protection

    Part of the process that can slow the set-up process down is when side agreements are drafted. However, using a corporate sponsor ensures this is not an issue, as first-tier legal counsel is often used to ensure business owners and shareholders are protected.

    Government Relations

    A local sponsor often has established relationships with government entities. He can assist in navigating government processes, accessing government incentives, and resolving any issues that may arise. This can help streamline operations and enhance the overall business environment.

    Local Market Access

    Partnering with a local sponsor provides businesses with valuable access to the local market and customer base. The sponsor’s knowledge, experience, and connections can help navigate the local business landscape, establish relationships, and identify potential opportunities.

    Local Expertise and Networks

    A local sponsor brings valuable expertise, knowledge, and networks within the UAE. This can help businesses in various aspects, such as identifying potential suppliers, finding suitable business partners, and accessing key resources for operational success.

    What is the Corporate Sponsorship In The UAE?

    Corporate sponsorship in the UAE refers to a business arrangement where a local Emirati individual or entity (the sponsor) partners with a foreign company (the sponsored entity) to facilitate the establishment and operation of the foreign company in the UAE.

    The local sponsor typically holds a minority ownership stake in the sponsored entity, often 51%, while the foreign company holds the majority ownership stake.

    LLC Sponsorship In The UAE

    Our sponsorship services are designed to ensure you have complete financial and operational control of your business while working with a notable corporate nominee who will act as your 51% local sponsor in the UAE.

    We offer a market-leading service that ensures your business has robust legal protection and a corporate sponsor that gives you all the security you need to get started in the UAE.

    At the same time, we’ll provide you with all the required documentation. Like this everything is in order and ready to go.Moreover, if required, we can also help you set up a civil company, branch, sole establishment or representative office in the UAE.

    dubai start business

    - Our Strategy

    - Frequently asked questions

    The role of a local sponsor in corporate sponsorship in the UAE is to fulfil legal requirements and act as a representative for a foreign company within the UAE.

    The local sponsor provides their Emirati nationality and local connections. This will assist the sponsored entity in navigating the legal and regulatory framework. Moreover, it will help in obtaining licenses and permits and ensuring compliance with local laws. They may also provide guidance, support, and local market insights.

    In most cases, the local sponsor in the UAE holds a 51% ownership stake in the sponsored entity, while the foreign company holds the remaining 49%. This ownership structure is a result of the requirement for 51% local ownership in many business sectors in mainland UAE.

    However, it’s important to note that profit-sharing and decision-making authority can be agreed upon and documented in the sponsorship agreement to ensure a fair and mutually beneficial partnership.

    The local sponsor does not typically have control over the management of the sponsored entity. Additionally, the day-to-day operations and management of the business are generally handled by the foreign company or its appointed executives.

    However, it’s important to have clear terms and conditions outlined in the sponsorship agreement to define the roles, responsibilities, and decision-making authority of both parties.

    Yes, a sponsored entity can terminate the sponsorship agreement with a local sponsor under certain circumstances, as defined in the agreement. However, it is important to follow the agreed-upon termination process outlined in the agreement to avoid any legal complications.

    Moreover, it is advisable to seek legal advice to ensure compliance with the contractual obligations and applicable laws when terminating a sponsorship agreement.

    While corporate sponsorship can be beneficial, there are some potential risks to consider:

    a. Limited control. The local sponsor may have certain rights and obligations that could affect decision-making and operations.

    b. Dependence on the local sponsor. The success of the business may be influenced by the reliability and competence of the local sponsor.

    c. Profit sharing. The distribution of profits as per the ownership structure may affect the financial returns for the foreign company.

    d. Changing regulations. It’s essential to stay updated on any changes in regulations or laws that may impact the sponsorship arrangement.

    e. Selection of a reputable sponsor. Choosing a trustworthy and reputable local sponsor is crucial to mitigate risks and ensure a successful partnership.


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