Difference Between Dubai Local, Corporate Sponsor & Local Service Agent

Difference Between Dubai Local, Corporate Sponsor & Local Service Agent

Dubai might be a business hub to trading, industrial and commercial sectors – but it still poses a battle for all the people coming in to find a sponsorship. When it comes to spending in the UAE, there are three distinct types of sponsorships that often leave people confused.
The 3 types of sponsorships for a company set up in Dubai Mainland are local service agent, Individual sponsorship and corporate sponsorship. In this article, we break down all the important factors pertaining to these different types of sponsorships:

Local Service Agent Sponsorship
This is a type of sponsorship that relies on an Emirati National. It is this person who acts as a company representative and helps you set up your branch office, civil business or sole proprietorship. This is different from individual sponsorship, however, as the local service agent will charge an annual fee that will be settled prior to the process. You will have to sign commercial contract for the services you receive. It is the local service agent who will have to facilitate the renewal licenses off the hook. They’re also liable to make all the meetings and arrangements with the government officials and regulatory bodies on behalf of the company.

Pros Of Having Local Service Agent In Dubai:

1. No undertaking on any financial obligations
2. Easily available online,
3. Help in document renewals and clearance,
4. Saves time by speeding up the process

   Cons Of Having Local Service Agent In Dubai:

5. Long absences can lead to pending signatures on paperwork.
6. Sudden absconding without leaving a trace
7. Sometimes additional costs are a catch within the sponsorship fee.
8. Finding a qualified local agent is not easy.

Corporate Sponsorship
Corporate Sponsorships are somewhat similar to individual sponsorships, but also have differences in certain norms. For one, the corporate sponsor receives 51% of the ownership, while you get a share of 49% ownership.

Pros Of Having Corporate Sponsorship In Dubai:

1. Succession planning not required

1. The documentation process is quick

1. Secured regulatory and legal agreements
2. No interference from your local partner on company activity and decisions

1. Expat holds all advantages with full financial benefits.

ConsOf Having Corporate Sponsorship In Dubai:

1. Costlier Than Other  sponsorships,
2. Additional Paperwork

Individual Sponsorship – Local Sponsor In Dubai:

Individual Sponsorship is conductive to Business activities like manufacturing units or trading. A limited liability company suits this type of sponsorship. However, it is integral that the local partner you choose is fully trustworthy, as they’ll be receiving a huge chunk of your shares. Your local sponsor or Emirati partner will receive 51% share in this type of sponsorship.

Pros Of Having Individual Sponsorship In Dubai:

1. The least costly type of sponsorship

1. Minimal paperwork is required

Cons Of Having Corporate Sponsorship In Dubai:

1.  Your partner’s travel plans can also interfere with operation efficiency

1. An unfortunate death or retirement of a local sponsor will lead to the heirs being shifted – hence also causing a crucial delay in the process

In conclusion, the decision to go with local or corporate sponsorship, or a local agent, is dependent purely on your particular scenario. Each sponsorship has its own pros and cons – and you must wisely choose which of the three is most suitable for you.

Book a FREE consultation today with a company formation consultant. Clear all your doubts related to setting up a trading company in UAE. Call us on +97145667485, WhatsApp +971551129344 or simply visit www.dubaibusinessservices.com to chat with us.