‘Local sponsor’ is a general term used in the UAE to refer to local service agents and nominee shareholders (sleeping partners) in mainland companies with foreign investment. A sponsor has to be an Emirati (UAE national) with a family membership card.
A local sponsor in the UAE is a sleeping partner in your business, who are mandated to own at least 51% of the shares of the company. He should be a local resident of the country, should hold a valid Dubai passport and have a share in profits (decided on mutual agreements between the parties). But note that the local sponsorship rule is applicable only in the Dubai mainland area and not in Dubai free zone regions.
Dubai has become an incubation hub for business innovation, a city full of business opportunities for all business activities in the world. The Dubai government is very keen on facilitating upcoming business entrepreneurs and firms. The city provides a strategic location, state-of-the-art infrastructure, top-notch business facilities, investment-friendly market, and encouragement to foreign direct investment (FDI). Dubai has headed towards the path of revolution and has set up policies which will benefit the business industry in the best form possible.
Business setup in Dubai or any other the part of the UAE might be difficult for foreigners, as they may lack knowledge about the place, its policies, norms or regulatory functions. In order to tackle this situation, Dubai government makes it mandatory for a foreign businessman to have a local sponsor for their business. Any business setup in mainland Dubai must have a local sponsor.
We have discussed everything about a local sponsor and how important he/she is in the business set up in Dubai. But there are certain aspects which you need to look into before hiring a local sponsor.
Every local sponsor should be checked and cross-checked before being hired.