Business Partnerhip in Dubai
Local Sponsor or Local Service Agent?
Dubai has been attracting a lot of investors in the recent years up to now. One of the primary questions that we ask as a potential investor is, “How to start a business in Dubai?”
There are lots of ways to establish a company in the emirates depending on the requirement of your chosen business. You can have a business partnership in Dubai with a local sponsor but if you want to run and manage a business with 100% ownership, that is now possible with the subsequent changes in the economic laws in the country.
There are many questions about the business partnership in Dubai as to the difference between having a local sponsor or a local service agent.
To have a local sponsor means an Emirati citizen will become a partner in your company and own shares, and in certain situations the earnings. However, in some cases, local sponsors sign a document waiving their right to participate in corporate operations and giving the other shareholder full power of attorney to run the business.
Having a local sponsor gives the company more opportunities by having a key introduction and more support for the business. To have a local service agent means having a local representative in government dealings, without having any share in the business. That means a foreign investor can have full ownership and full power in the business.
Most of the investors want to be in the middle of the action which means establishing a company in the mainland. Unlike free zones, a mainland company can trade directly anywhere in the country which gives them the advantage of having large-scale opportunities.
To open a business in Dubai, you must know where to establish your business and of course the requirements of setting up the company as per the business activities in order to know if you need a business partnership in Dubai or not. This will guide you to establish your business successfully in the heart of UAE.
As a newbie investor in UAE, among the questions that you might ask is if you need a business partnership in Dubai to setup your company. The answer to this question is depending on the setup of the company you will be having. If your business is covered by a professional services license, then you will not need a business partnership in Dubai.
A UAE local may only serve as a local services agent (LSA) to assist you with the processing of your licenses related to the government. They do not have to interfere with the daily operations of the company.
To summarize, a local partner or a local sponsor owns share in the company while a local service agent (LSA) has no share in the company.