Local Sponsor in Abu Dhabi

Setting up a business in Abu Dhabi sounds exciting but for a foreign investor, it can be hard to navigate through the legalities. In addition to that, there is a need to have a local sponsor associated with the business.

Now, you might be wondering who is a local sponsor and why having one is necessary. In this article, we will look at that and offer more insight into local sponsors in Abu Dhabi.

Who is a Local Sponsor?

A local sponsor is an Emirati who possesses the required qualification to be associated with a business that is set up in Abu Dhabi. Their primary role is to fulfil legal requirements and act as a liaison with the government.

The local sponsor holds 51 per cent of the company shares and acts as a legal partner. In some cases, full ownership of the business can be held by an expatriate, with the local sponsor assuming the role of a local service agent in Abu Dhabi. For being involved with the business, a local sponsor receives a yearly payment based on the agreement between both parties.

Types of Local Sponsors in Abu Dhabi

When it comes to local sponsors, there are three types. Let us look at them:

  • Corporate Local Sponsor

When a government or local organisation partners with your business, they are known as Corporate Local Sponsor.

  • Individual Local Sponsor

An individual local sponsor is an Emirati who partners with your business and owns 51 per cent of the company shares. 

  • Local Service Agent as a Sponsor

In case your business offers professional services in the mainland area, a local service agent can be used as a sponsor. 

Advantages of Having a Local Sponsor in Abu Dhabi

Having a local sponsor for your business has certain advantages. They are mentioned below:

  • Compliance

Having a local sponsor ensures your company's adherence to the regulations laid down by UAE authorities.

  • Access to Local Benefits

You can access local benefits by having a local sponsor associated with your business.

  • Local Knowledge

As the local sponsor is an Emirati, they possess local knowledge about the rules and regulations as well as provide valuable insights into the local market.

How to Onboard a Local Sponsor in Abu Dhabi?

Finding a reliable local sponsor is important. Discussed below are the steps on how to associate your business with a local sponsor:

  • Conduct Research

Conducting proper research about the individual or company that you want to get onboard as a local sponsor can have a lasting impression. Verifying the reputation and the credentials of the local sponsor ensures a smooth partnership. 

  • Discuss the terms

Once you shortlist the local sponsor, you need to discuss all the terms like expectations and responsibilities with them and prepare the agreement. 

  • Sign the Contract

Once all the terms are agreed on, you need to close the deal by signing the agreement.

Note: In case of confusion, you can always come forward and seek an expert's advice.

If you wish to incorporate your business in Abu Dhabi mainland, it is mandatory to have a local sponsor for certain businesses. It can help with having access to local knowledge and getting past the regulations laid down by the authorities. To avoid confusion and keep it hassle-free contact our experts. We will be glad to assist you!


Do I need a local sponsor to start a business in Abu Dhabi?

Yes, if you plan to establish a Limited Liability Company (LLC) in the Abu Dhabi mainland, partnering with a local sponsor is mandatory by law. This requirement doesn't apply to businesses set up in free zones.

What is the role of a local sponsor in Abu Dhabi?

The local sponsor acts as your legal partner and holds a majority share (usually 51%) of your company. They act as a bridge between your business and the government, facilitating processes like license acquisition and renewals. 

Can I change my local sponsor in Abu Dhabi later?

Yes, it's possible to change your local sponsor, but it can be a complex and time-consuming process. It involves legal procedures, obtaining approval from your current sponsor, and potentially incurring additional fees.