HOW TO FIND A LOCAL SPONSOR IN DUBAI

How to Find a Local Sponsor in Dubai

How to Find a Local Sponsor in Dubai

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How to Find a Local Sponsor in Dubai – 2025 Guide for Business Setup Success


Locating a local sponsor in Dubai requires an understanding of your business activity, determining if you fall under the UAE’s negative list (still requires sponsorship), and connecting with either a verified UAE national or corporate sponsor. Depending on your business type, you may decide to work with individual sponsors, corporate sponsors, or local service agents. Always use legal agreements to protect your rights, such as Power of Attorney or Memorandum of Understanding. For professional assistance, engage with business setup consultants in Dubai specializing in local sponsorships and local sponsorship agreements for expert guidance.

Steps to Find a Local Sponsor in Dubai, UAE


Obtaining a local sponsor is one of the first things to consider when setting up a business on the mainland of Dubai. With a wonderful sponsor, you can expand your business, but a poorly chosen one may lead to legal or operational headaches later on.

Step 1: Know If You Actually Need a Local Sponsor


Locate if your preferred business venture is listed under the UAE’s “negative list,” (Business activities not permitted in Dubai).

In case it does, you’re likely to need a local sponsor. Otherwise, you could qualify for 100% foreign ownership.

This list involves local sponsorship: 

  • Telecommunications and media (some categories)

  • Oil and gas

  • Defence industries, Banking and Finance

  • Insurance 


Step 2: Decide What Type of Sponsor You Need


These are the types of local sponsors available in the UAE: 

  • Individual Sponsor – A UAE national who holds 51% ownership (as in LLCs)

  • Corporate Sponsor – This is your sponsor, and it is a 100% Emirati-owned company

  • Local Service Agent (LSA) – For professional businesses like consultants, doctors, and engineers, they hold 0% ownership.


Please select according to your business model. For example, if you plan to start a consultancy, you will most certainly need an LSA.

 

Steps to Change a Local Sponsor in Dubai


Step 1: Review Your Sponsorship Agreement


Check your current MoU, Power of Attorney or legal contract. Look for any exit clauses, fees, or notice periods. These documents will tell you how easy it is to terminate the agreement.

Step 2: Get Consent (if required)



  • Some agreements require written consent from the current sponsor.

  • If your contract allows you to exit without consent, you may move forward with legal support.

  • In case of a dispute, you should involve a legal consultant or file a case in the UAE courts.


Step 3: Prepare the New Sponsor Documents


Once you’re ready to switch:

  • Draft a new Local Sponsor Agreement.

  • Include exit clauses, a non-involvement agreement, and fixed fee terms.

  • Get all paperwork notarized and translated if needed.


Step 4: Update Company Records


Go to the Department of Economic Development (DED) and submit:

  • New sponsor’s Emirates ID copy

  • Updated license application

  • Trade name certificate (if applicable)

  • Old MoA (Memorandum of Association) with changes highlighted

  • New MoA signed by the new sponsor and partners


Step 5: Make the Change Official



  • The DED will review the application.

  • Once approved, they’ll issue a new business license showing your updated sponsor.

  • Update your bank records, immigration files, and visa sponsorships if necessary.


Step 3: Search Through Reliable Channels


You need a professional and trustworthy sponsor. Look in places like: 

  • Referrals from other business owners

  • Business setup consultants (already have relationships with verified sponsors)

  • Government directories or UAE free business matchmaking services 

  • Local chambers of commerce


Step 4: Check Background & Reputation


These are sponsor specifics to check before signing any document: 

  • Ask for references

  • Investigate their work within the UAE

  • Check if the owner is either Emirati or a 100% UAE-owned company, and make sure there are no legal issues

  • Look into any red flags


Ask if they have sponsored other businesses in your line prior.

Step 5: Negotiate the Agreement


After you are satisfied with a prospective sponsor, remember to do the following:  

  • Talk about the yearly payment (typically AED 8,000 to AED 15,000).

  • Confirm that they will not try to meddle with your business processes.

  • Request for a Power of Attorney or Memorandum of Understanding (MoU)

  • Clearly define the exit clause and refund conditions.


 All documents need to be signed and notarized by UAE courts.

Step 6: Finalize Legal Documents


Usually, you will have the following documents:  

  • Drafted sponsorship agreement signed and completed.  

  • Notarized MoU or POA.  

  • Emirates ID copies, copyright, and trade license drafts.  

  • DED approvals, along with the application for a business license.


Step 7: Register the Company


With your sponsor’s name officially inserted, remember to:  

  • Hand in all documents to the Department of Economic Development (DED).  

  • Register for a trade license.  

  • Open a business bank account.  

  • Apply for residency visas for yourself and your staff.

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