Local Partner Services
When you’re operating in an overseas territory, you need expert local partner services to help you smoothly navigate the local regulatory, legal and business cultural framework. Ruthberg LLC provides the legal services that you need to rapidly cement your position in your target market, swiftly, accurately and with a high degree of service and attention. As part of these services, we offer the highly desirable Corporate Sponsorship arrangement for Western firms operating in the UAE. Read on to find out more about these requirements, and our service offers.
Local partner services – sponsorship options
There are various sponsorship options that exist for operating an LLC in the UAE:
1. Corporate sponsorship: this is invariably the preferred choice for most entities. A local sponsor, or UAE national company, will take a 51% share in the business, and the remaining 49% can be owned by foreign investors. The business is company-sponsored in this arrangement. This is the service that Ruthberg LLC offers to its clients in the UAE, for multiple benefits.
2. Individual Sponsorship: this arrangement tends to be found most frequently in Dubai, although it has various risks to the business. A local sponsor, or UAE national, becomes an individual sponsor of the foreign entity’s LLC presence in the UAE, taking on both a 51% ownership share and liability of the company. He or she can then transfer Power of Attorney to the foreign partner, for a fixed yearly fee.
Corporate sponsorship or individual sponsorship?
There are various considerations for foreign businesses to consider before progressing their sponsorship application in the UAE. Ruthberg LLC can assist with advisory and consultancy services to establish the best course of action for your needs, as well as provide direct legal services to achieve the necessary sponsorship.
Key points to note are:
When setting up a local firm in the UAE, expatriate shareholders must have a local partner or service agent (sponsor) who owns a 51% majority share to establish the company.
Corporate sponsorship allows for multiple signatories, including Ruthberg LLC who can attend and sign wherever required. With single sponsorship, there can be significant delays and issues if the individual signatory is unavailable.
If a Ruthberg LLC local shareholder dies or is incapacitated, the company or branch sponsored will remain unaffected. With an individual sponsorship arrangement, if the individual sponsor dies or becomes incapacitated, Sharia law will apply and all company licences and files are frozen pending probate. Assets will be split by heirs and new contracts are required. During this process, the company cannot trade.
With a Corporate entity partnered with Ruthberg LLC, agreements have a stronger basis in companies law and are legally binding, with full protection offered to the foreign party. With the individual local sponsor or shareholder arrangement, side agreements are legally weaker. Powers of attorney can be revoked unilaterally by the sponsor, and Sharia Courts will have the final say in the case of a dispute.
Number of Sponsorship Control
With corporate sponsorship, the number of companies is limited at any time for partnership arrangements, which safeguards operational activities and reduces cross-partner risk. In this instance, Ruthberg LLC maintains the necessary oversight level to ensure that no labour delays or issues occur that could affect partnered clients.
In contrast, individual local sponsors and partners in the individual sponsorship arrangement can partner with various unknown companies without formal oversight. Issues with these unknown partners frequently lead to court cases, labour blocks, fines and delays and is difficult to manage and govern.
Rutherberh LLC will have a physical location in all emirates, with a significantly experienced and well-resourced team on the ground, including multiple signatories. This means that we are always able to assist our clients and their staff with necessary signatures, legal support and PRO service, amongst other corporate services.
In contrast, an individual sponsor may have to travel extensively between Emirates, or experience difficulties with e-signature cards being used by multiple unlinked companies across different locations. Further issues and time delays can be caused by PROs.
Ruthberg LLC has a tried and trusted reputation in the field, with years of experience operating in the Emirates. We have the necessary family books, a wide range of Emiratis and zero PEP status or conflicts. This means we can deliver a broad range of solutions for different approvals, locations and activities – including Dubai Municipality Approvals, SPC approvals, ADNOC approvals, recruitment, insurance, RERA etc.
This contrasts to situations of individual sponsorship, which can limit companies in what they can do. Certain business activities do require an exclusive local partnership and individuals cannot necessarily obtain the necessary level of external approvals.
Our corporate sponsorship offers a 90-day exit, sale or transfer clause without penalty. Ruthberg LLC offers a clear and transparent exit plan and ensures the foreign business has complete control over brand, IP and profit and loss so that the foreign client can build a successful business in the UAE – retaining full control and ownership.
With an individual sponsor, no exit clauses are in place to be enforced and this can represent significant risks when the foreign entity wants to divest or sell the business. With individual sponsorship, it is significantly harder to fully control and own the Emirates branch or business.
Ruthberg LLC – providing expert company sponsorship solutions
Ruthberg LLC has a hugely successful track record in offering trusted expert local partner services as a ‘corporate nominee partner or entity. In the vast majority of cases, for UK businesses wishing to operate in the UAE, this approach will be vastly preferable over an individual sponsorship arrangement.
Furthermore, our team adds additional client security by limiting clients within a company name. The 51% shareholding required by Emirates law falls under the various entities of Ruthberg LLC rather than an employed individual.
We provide everything from the initial setup of the vastly preferred corporate nominee system, to board structuring and power of attorney so that you – as our client – retain full legal rights, control and ownership over your business, with full profit share and total AGM voting rights.
Our reputation in the field is excellent and our team of seasoned professionals have years of experience in delivering expert services to UK businesses looking to set up their operation in the UAE. Please contact us for a confidential discussion of your needs in the first instance.