In respect to the UAE Commercial Companies Law that governs the criteria’s by which companies are set up it is a mandatory requirement that all companies established in the UAE should have a national partner acting as a local sponsor with 51% share in the company whilst the remainder 49% shares belong to the expatriate business owner.
However, the aforementioned can bear exemptions with regards to companies established in Free zones, Civil Companies and the likes. Having this said, business owners have the option of acquiring a local individual to represent that 51% or to have a corporate to act as the 51% shareholder, however any corporate acting as a shareholder must be 100% owned by a UAE national.
In both cases, the foreign investor will be the key person running the company while the local sponsor receiving a set fee or profit shares agreement. It is not uncommon that foreign investors and business owners face slight difficulty with regards to obtaining a UAE national they are familiar within the realm of business. Due to this commonality, we at Business Link are certified and licensed to act as a Corporate Sponsor for those interested in starting mainland company in Dubai.
When weighing out which sponsorship method best suits investors it is crucial to understand the characteristics and the benefits provided by each, individual sponsorship, local service agent, and corporate sponsorship. When considering pursuing a local sponsorship, business owners must first determine the type of business activity of the company.
Common considerations to take into account before starting a sponsor search include:
* Will the sponsor help the business?
* What are possible worst-case scenarios with each sponsor type either corporate or individual local sponsor in Dubai?
* What are the key benefits?
Potential business owners interested in LLC company formation, trading company, or manufacturing companies are eligible to seek corporate sponsorship. Looking at it from a legal standpoint, having a corporate as a shareholder aids in overcoming various legal requirements when compared to individual shareholders.
From a financial standpoint the benefit of a corporate sponsorship is that it provides greater financial freedom and a sense of security. The support of an already established management team of a corporate is a benefit every entrepreneur must consider. Those considering appointing a local service agent usually is seeking professional licenses, the setup of branches of foreign companies, or setting up representative offices.
The choice of sponsorship is wholly dependent on the incorporator and the level of comfort of the interested party. The professional consultants at Business Link support our clients to select the most appropriate decision in business setup and guide them through complete procedures of Dubai Mainland company formation and Dubai Economic Department company registration. Contact Business link UAE for Dubai mainland business setup, for more details call +971556070118 or e-mail us in info@businesslinkuae.com.
