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What is the Difference between Local Service Agent and Local Sponsor
Are you considering opening a Dubai Mainland company under the Dubai Department of Economic Development (DED)? If you are a non-Emirati entrepreneur looking to establish a company under the Dubai DED, you will be required to have a Local Service Agent or a Local Sponsor and would have to share a 51% stake in your business. There are exceptions to this rule, though; for instance, if you would be applying for a professional license, you would still own 100% of the company.
What is the difference between a Local Service Agent and a Local Sponsor?
This is one of the most frequently asked questions and challenging things a foreign entrepreneur faces when starting up a Dubai mainland company. This is because any commercial or industrial licensed business needs to have a Local Sponsor.
What is a Local Sponsor?
A Local Sponsor is an Emirati national who will be partnering with you in your business, with 51% of the company shares. Local Sponsors do not usually involve in business operations and are just offering service in exchange for an annual fee to enable a foreign entrepreneur to open a company in Dubai mainland.
Several high-profile Local Sponsors can open their doors to help you set up a company in Dubai. If you would like to be assisted with any Local Sponsorship needs, please feel free to talk to one of our Business Setup Advisors.
Limited Liability Companies (LLC) in Dubai are established with Local Sponsors and are free from tax, and the foreign entrepreneur can repatriate 100% of its company profits. By owning a Dubai mainland company, your company can open several branches across the UAE and even engage in various government projects, unlike if you have a Free Zone license.
What is Local Service Agent
A Local Service Agent is a UAE national and acts only as a representative and has no civil responsibility or monetary compulsions. He acts as a representative to enable a foreign entrepreneur to open a business in Dubai but will not have any legal interest in the operations, administrative, company profits, or assets. The foreign entrepreneur holds 100% company ownership and holds full power in business operations.
Appointing a Local Service Agent also comes with an annual fee. If you would like to find out about Smart Zone’s Zero Local Sponsorship Offer this October, please message or call +97155 233 0077.
Dubai Mainland License Options
- Professional License – Professional licenses can be established with a Local Service Agent. Foreign entrepreneurs can own 100% of the company and will not share 51% with an Emirati national.
- Commercial License – Foreign entrepreneurs who are setting up a company that deals with general trading, exchanging goods, and the likes would be required to use a Local Sponsor.
- Industrial License – Similar to Commercial License, any foreign entrepreneur looking to start a business in the manufacturing and industrial industry, such as manufacturing, fabrication, food production, etc., would be required to have a Local Sponsor.
Smart Zone can manage the entire Dubai Mainland company formation for you. From local sponsorship, license application to office spaces, and even for visa application and bank opening. We are your one-stop-shop service for all your business setup needs. Talk to one of our knowledgeable and well-experienced advisors today.