How to find a perfect local sponsor for your business

How to find a perfect local sponsor for your business

How to find a perfect local sponsor for your business

If you are an investor going for business setup in Dubai then you need to know about sponsorship in UAE. Every company that is incorporated in Dubai must have a sponsor or a service agent that depends on the type of company you are forming. It also depends upon the type of activity you have selected. If you are going for free zone company formation, the free zone is your sponsor.

A Sponsor or a Local Service Agent in Dubai is any UAE national (man/women), or any UAE owned company who is willing to take on the responsibility of bringing you in the UAE – as an investor, or as an employee, or even if you are a tourist.

Sponsorship Agreement

  • In a Mainland Company formation sponsor normally has 51% + shares of your business. He does not invest any of his own funds, and you are obliged to put 51% of your capital in his name.
  • In most cases, he will not partake of the profits of the business but will take either an annual fixed fee or a percentage of revenues.
  • Sponsorship agreement states that you are the manager and it is registered in the Dubai courts.
  • You can do side agreements with the UAE Nationals who are offering sponsorship for UAE company formation , where the sponsor agrees that 51% is not his, however the side agreements have not been accepted by the courts but it is at least moral agreement.
  • A Service Agent is generally only attached to Professional category companies where you can own 100% of the company.

Read More: How Much Influence Does Local Sponsor Really Have Over My UAE Business?

Types of Sponsors

There are three types of sponsors,

  1. A sponsor who just signs your documents such as application document for Trade License Dubai. They charge you the least.
  2. Then there will be sponsors who will help you with the negotiations or go to government offices to help with you if any of your documents are stuck in one of the departments. They may also help you in opening of Dubai bank account or negotiations for rent. These may be more expensive.
  3. Then there are name brand sponsors who are highly placed. They may belong to rich families with great connections or people with high government positions. Just on the basis of their name you will be able to get clearances but they will not go with you to meet anyone to solve an issue.

To know more on the types of sponsorship available to foreign investors read in our blog here, Types of Local Sponsors Required For Businesses in UAE


However sponsors also charge money because there are risks. They are liable for closing your company and sending our employees back home in case you leave the company or just leave the country. They have to cancel the visas and close the company, close your bank account and deal with the post-dated cheques that may have been issued or any legal issue. So it’s not that they are getting paid for nothing.

Now is the great time to start business in Dubai as the city has plenty of opportunities and its visions 2020, they want medical tourism, increasing number of tourists coming to Dubai, increasing number of international financial centers that has been opened and it has been promoted rigorously, Dubai is becoming a home for universities round the world and has specific free zones just for software.

Read more: Why Dubai is Preferred Global Destination for Foreign Direct Investment

Business Setup Consultants Dubai can help you find the right local sponsor for you UAE Business!

Being a compulsory requirement, it’s a real, inevitable challenge for foreign entrepreneurs to find the right local sponsor for their company formation in UAE, who is well educated, well connected, reliable, reasonable priced and who can represent them in the best possible manner.

At Business Setup Consultants Dubai- the most emerging and growing business consultants in Dubai, we assist you in successful company registration Dubai by finding the right local sponsor for your business as per your requirement.

Please get in touch with our team at or visit our website Business Setup Consultants Dubai  for more information.

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