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The Evolution from Local Sponsorship to Local Service Agent

local sponsorship

In recent times, we have witnessed a momentous shift in the UAE’s corporate landscape, ushered in through a series of new reforms aiming to make the nation even more attractive and conducive to investors both local and international. One of the pivotal changes that stands prominent is the redefinition of “local sponsorship” to what is now termed as a “local service agent.” This transformation is not just in name but extends to the functional dynamics as well. In this piece, we unravel the layers of this change.

Local Sponsorship in Dubai

Understanding the Shift

Traditionally, foreign investors needed a local sponsor who owned 51% of the business, a requirement that to an extent restricted foreign business owners. Now, with the introduction of the new companies law, the concept has evolved, bringing in more latitude and operational ease for foreign investors. The role of local sponsors has been recalibrated to being local service agents, who no longer hold a share in the business but facilitate in liaising with government authorities for various clearances, offering a scaffold of support without any equity hold.

The Impetus Behind the Change

A conscious move by the government, this transformation aims at fostering a business environment that is more welcoming and less restrictive. By mitigating the obligatory shareholding, the UAE opens doors to heightened foreign investments, a step towards economic diversification and bolstering the nation’s standing as a global business hub, creating a fertile ground for innovation and entrepreneurship to thrive.

Decoding the Role of a Local Service Agent

While the equity holding part is relinquished, the local service agent still remains a crucial cog in the business setup wheel. Their role encompasses a myriad of responsibilities including aiding in obtaining licenses, interacting with government bodies, and ensuring the business adheres to all regulatory compliances. Their expertise and understanding of the local market can be a boon for foreign entrepreneurs, helping navigate the administrative and bureaucratic avenues efficiently.



How Can We Help

At Choose UAE, we are aligned with these dynamic shifts, offering you services that resonate with the current trends and requisites. Our experts can guide you in finding the right local service agent, ensuring a seamless process while setting up your business in the UAE. With a deep understanding of the new laws and a network that facilitates effortless liaisons with local service agents, we stand as your trusted partner in this journey. Reach out to us to make the most of this new opportunity, weaving through the changed landscape with guidance that is both informed and reliable.

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