Local Sponsor in Abu Dhabi

Local Sponsor in Abu Dhabi is a terminology used to depict a local service agent or nominee shareholder who has foreign investment in the mainland business. All those who wish to start up a company in the UAE are expected to have an agent or local Sponsor. 

The Sponsor must be a national of the UAE having a Gincia card.  Operating a company outside the Free Zone jurisdiction requires the mandatory appointment of a local sponsor. 

These sponsors serve as representatives of the UAE government. A local partner who knows all the requirements and aspirations of the business is an accomplishment against a corporate goal. 

There are three general Local Sponsor categories in the UAE. Among them, the selection is entirely based on the type of company. 

Types of Local Sponsors in UAE (Abu Dhabi) 

A sponsor can connect an investor to various resources from networks, partners, and organizations to help you expand your business. One essential task is to choose the suitable type of local Sponsor. 

Three types of local sponsorship have been given that can help to develop different businesses. 

1. Individual Sponsorship 

Individual sponsorship applies if you can become your Sponsor. This type of sponsorship works if you wish to establish a limited liability company in Abu Dhabi or a trading company. 

2. Corporate Sponsorship 

When a business owns more than 51 percent of the shares and individuals or a group of local or foreign investors own the stock. Corporate sponsorship works when establishing a trading, manufacturing, or limited liability company. 

3. Local Service Agent 

When a professional entity wants to set up a business such as a doctor, an artist, etc. The entity represents the company in all administrative dealings and other legal formalities. 

A local service agent is suitable when you want to appoint a professional license, representative office, or branch of a foreign company. 

A UAE Company Local Sponsor

Let us have a look at the duties of a local sponsor, the advantages of hiring them, the challenges faced, and things to know while hiring them.

The Duties of a Local Sponsor

As listed below, a local Sponsor is responsible for some essential things. 

• Cancellation of employees' work visas

• Cancellation of Employee Labour Status

• Terminating the bank accounts

• Settlement of any outstanding debts (if necessary)

• The Local Service Agent can, on behalf of the companies, negotiate with government officials and ministries and also facilitate the renewal process

• Interpreting the Arabic business registration contracts, local authorities are required to understand and interpret these documents and may sign them on behalf of their foreign business partner. 

Things to Know Before Hiring a Local Sponsor

Cross-check a local sponsor before hiring. Here are a couple of the things you need to carry in mind.

• Check if the Sponsor is a Dubai resident. If the Sponsor isn't a Dubai resident, then the investor will travel for signatures or govt formalities each time

• Have a full family background check on the sponsors. A sponsor from a well-reputable Dubai family will be an advantage to the company as the UAE national will most likely have goodwill in the region

• Selecting a government employee as a local sponsor in Dubai will benefit a company better as a result of direct connections with government agencies

• The sponsorship deed agreement may be verified by a foreign investor before signing it

• Be transparent and precise about the fees or payments to be charged to the local Sponsor and the sponsorship services

• An investor may also seek advice about a local sponsor from a business consultant in Dubai. A consultant can provide information on a local sponsor's terms and conditions. 

Challenges Faced While Selecting a Local Sponsor

• Getting to know about your local sponsor before a deal

• Hidden costs in the sponsorship fee

• Throughout the UAE, contracts, in addition to written or electronic documents, may take the form of a verbal agreement

• A local sponsor's premature death or early retirement will cause an abundance of problems

• Finding the right local UAE mainland sponsor.

 Advantages of Working with A Local Sponsor

Aside from the key benefit of being able to trade directly within the UAE market, partnering with a local sponsor has a range of other advantages while doing a business setup in Abu Dhabi.

• 100% reliable assistance

• Support and guidance on registration, licensing, and office set-up

• Saves time and money

• Proper work progress

• No suspensions and extra cost.

LLCs established with a local partner are 100% tax-free, and foreign investors can repatriate 100% of their profits should they wish to. Companies set up with a local partner often have the added benefit of being able to open limitless branches in the UAE and apply for a variety of private and government ventures that are not accessible without a local partner to free zone or professional services businesses. 

Finally, foreign entrepreneurs are granted investor status in the UAE when they start a company in Dubai with a local partner, enabling them to get residency visas for themselves and their dependents.

Procedure to Get a Local Sponsorship UAE in Abu Dhabi

These are the steps that would involve finding a local sponsor. 

1. Prepare the Essential Documents

Once the annual Local Sponsor fees have been paid, all UAE Local Sponsor documents will be sent.  

Documents include a copy of your passport and a copy of your Emirates ID. 

2. Apply for an Initial Approval

You must proceed with the trade name registration in Abu Dhabi and apply for initial online approval on DED online or via any typing service centers. 

3. Draft the Memorandum of Association

Draft a Memorandum of Association of LLC License through any typing center in Abu Dhabi and then notarize it to the notary public. Abu Dhabi Local sponsor and partner must be present to sign the MOA at the notary or any person authored on their behalf in the later stage; one must need to rent office space or shop and submit a final submission to DED or Online. 

4. Note the Other Necessities

Ministry of Human Resources & Emiratisation Establishment and GDRFA Cards are necessary if an owner decides to apply for an employment visa partner and ask for a license once it is issued. This service is provided on Abu Dhabi LLC registration (if you need a License Registration service through us then choose from the additional services). 

Our experts at Commitbiz give you one of the broadest ranges of business development solutions including:

• Advising on the funding of local businesses in Abu Dhabi

• Introduction to a reputable and credible local Sponsor

• Submission of your incorporation and company formation licenses

• Compliance with regulatory criteria for transactions involved in the establishment of companies in Abu Dhabi.  

Please speak to our experts about finding ways to secure Abu Dhabi trade licenses and operating licenses. To get more information on our Local Sponsorship Services, contact us today.