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Business setup in Dubai can be a great way to expand your horizons and reach new markets. The ever-growing market of the middle east needs something more than just business now. Foreign investors are flying in every day to cater to their dreams and aspirations of opening a new business in Dubai. However, before you can get started, you will need to consider whether or not you need a sponsor.
Who is a Sponsor?
A sponsor is a person or entity that provides financial or other support to an individual or organization. In the context of business, a sponsor is typically a UAE national or company that provides financial support and some level of control over a business that is owned by a non-GCC national.
The sponsor’s role is to ensure that the business complies with UAE laws and regulations and that it is financially sound. The sponsor may also provide the business with access to local networks and contacts. In return, the sponsor typically receives a share of the profits from the business.
What Are the Types of Sponsors in Dubai?
There are a few different types of sponsors in Dubai:
- Local sponsor: A local sponsor is a UAE national who is willing to provide financial support for your business and take on some responsibility for its management.
- Company sponsor: A company sponsor is a company that is already registered in Dubai and is willing to sponsor your business.
- Government sponsor: In some cases, the Dubai government may be willing to sponsor a business. This is typically only done for businesses that are considered to be of strategic importance to the UAE.
Why Do You Need a Sponsor in Dubai?
The need for a sponsor in Dubai depends on your nationality and the type of business you are planning to start.
- GCC Nationals: GCC nationals do not need a sponsor to start a business in Dubai. They can register a company in their own name and do not need to have a local partner.
- Non-GCC Nationals: Non-GCC nationals do need a sponsor to start a business in Dubai. The sponsor can be a UAE national or a company that is already registered in Dubai. The sponsor will be responsible for providing financial support for the business and will have some control over the management of the company.
Before you move ahead with your Dubai commercial license, there are a few reasons why non-GCC nationals need a sponsor in Dubai:
- To obtain a trade license: A trade license is required to operate a business in Dubai. Non-GCC nationals cannot obtain a trade license without a sponsor.
- To comply with UAE law: The UAE government requires that all businesses in Dubai have a sponsor. This is to ensure that businesses comply with UAE laws and regulations.
- To gain access to local networks: A sponsor can provide a non-GCC national with access to local networks and contacts. This can be helpful for businesses that are new to Dubai and do not have a strong network in the country.
How to Find a Sponsor in Dubai for Your Business?
There are a few ways to find a sponsor in Dubai:
- Contact the Dubai Chamber of Commerce and Industry: The Dubai Chamber of Commerce and Industry can help you to connect with potential sponsors. They have a database of sponsors who are willing to work with non-GCC nationals.
- Search online: There are a number of websites that list sponsors in Dubai. You can search by industry, location, and other criteria.
- Network with other businesses: Attending networking events and meeting other business owners is a great way to find potential sponsors. You can also ask your friends, family, and colleagues if they know of any sponsors who might be interested in working with you.
What Are the Benefits of Having a Sponsor in Dubai?
Whether you are planning for a company registration in Dubai at an offshore or mainland business zone, there are a number of benefits of having a sponsor. A sponsor can:
- Provide financial support: A sponsor can provide financial support for your business, which can help you to get started.
- Help you obtain a trade license: A sponsor can help you to obtain a trade license, which is required to operate a business in Dubai.
- Give you access to local networks: A sponsor can give you access to local networks, which can help you to connect with potential customers and partners.
- Help you navigate the bureaucracy: The Dubai government has a complex bureaucracy, and a sponsor can help you to navigate it.
What Are the Drawbacks of Having a Sponsor in Dubai for Business?
There are also some drawbacks to having a sponsor in Dubai. A sponsor:
- Will have some control over your business: A sponsor will have some control over your business, and they may be able to veto your decisions.
- May require a share of the profits: A sponsor may require a share of the profits from your business.
- May not be reliable: There have been cases of sponsors who have not provided the promised financial support or have not been reliable partners.
Additional Information about Sponsors in Dubai
Here are some additional things to keep in mind when considering whether or not to obtain a sponsor in Dubai:
- The cost of obtaining a sponsor: The cost of obtaining a sponsor will vary depending on the sponsor and the type of business you are planning to start.
- The duration of the sponsorship: The sponsorship will typically last for a period of five years.
- The termination of the sponsorship: The sponsorship can be terminated by either party at any time.
Grab Your Local Sponsor and Start Your Business Today
Whether or not you need a sponsor to start a business in Dubai depends on your nationality and the type of business you are planning to start. If you are a non-GCC national, you will need to find a sponsor who is willing to work with you and who meets the requirements of the Dubai government. There are a number of benefits to having a sponsor, but there are also some drawbacks. It is important to weigh the pros and cons carefully before deciding whether or not to obtain a sponsor.
To know the ground realities and understand what exact documents, verifications, and processes are required for company setup in Dubai, contact your go-to company setup consultants in Dubai, A&A Associate.
