Planning to start a business or enter into a partnership in the UAE? If your setup involves a local sponsor, having a clear and legally binding sponsorship agreement is highly important. At HHS Lawyers, we provide professional assistance in preparing sponsorship agreements in the UAE. We make sure that the agreement abides by UAE laws and safeguards your rights.
Drafting sponsorship agreements in the United Arab Emirates (UAE) requires careful attention to legal considerations and best practices. Welcome to HHS Lawyers, your trusted legal partner in Dubai, UAE. We specialize in providing comprehensive legal solutions to individuals and businesses alike. Our experienced team of lawyers understands the importance of sponsorship agreements in the UAE and can assist you in drafting legally binding agreements and provide you with legal services tailored to your specific needs.
A sponsorship agreement is a legally binding contract between a sponsor and a sponsored party that outlines the terms and conditions of their relationship. In the UAE, sponsorship agreements are crucial in various aspects of business and personal endeavors.
In the UAE, foreign investors often require a local UAE sponsor to start a business, especially on the mainland. A sponsorship agreement sets the terms of this relationship. It clearly explains the sponsor’s role, what each party agrees to do, and how the business will operate.
Agreements that are not in writing leave the risk of possible misunderstandings or disputes that may arise. Thus, a legally sound sponsorship contract provides legal protection.
Here are some key points highlighting the importance of sponsorship agreements in the UAE:
The sponsorship system is closely tied to residency and employment in the UAE. A sponsorship agreement, also known as a sponsorship contract or employment contract, is required for an individual to obtain a residence visa and work legally in the country. The agreement defines the obligations and responsibilities of both the sponsor (usually an employer) and the sponsored employee.
A local sponsor is often required for foreign companies or individuals looking to establish a business presence in the UAE. The local sponsor, a UAE national or a UAE-owned company, holds the majority share in the business. A sponsorship agreement outlines the terms of the sponsorship arrangement, including profit-sharing, decision-making authority, and other relevant aspects of the business partnership.
The UAE is renowned for hosting various international events, conferences, exhibitions, and sports tournaments. Sponsorship agreements are essential in these contexts, as they govern the relationship between the event organizer and the sponsor. These agreements outline the sponsorship package, including financial contributions, branding rights, marketing activities, and other benefits provided to the sponsor.
The UAE has a thriving arts, entertainment, and media industry. Sponsorship agreements are commonly used in these sectors to support artistic endeavors, cultural events, music concerts, film productions, and more. These agreements define the sponsor’s financial support, marketing exposure, and other forms of assistance in exchange for brand promotion and association with the sponsored project.
Many charitable and non-profit organizations in the UAE rely on sponsorships to fund their activities and initiatives. Sponsorship agreements with corporate sponsors or individual donors specify the terms of the sponsorship, such as the financial contribution, the scope of support, visibility, and recognition provided to the sponsor.
Understand the UAE Civil Code and specific regulations governing sponsorship agreements, depending on the location and nature of the sponsorship.
The entire framework for the establishment of businesses in the UAE has undergone tremendous changes. Under the UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021), a number of business sectors now permit 100 percent foreign ownership for mainland companies; thereby easing the requirement of having one local Emirati sponsor for those sectors.
Sponsorship agreements are, however, required in some limited instances, including:
Under Cabinet Resolution No (55) of 2021, the list of activities “with strategic impact” was announced, which are excluded from obtaining 100% ownership by foreign investors, unlike the rest of the economic activities in the UAE, which are open to 100% foreign ownership.
The list of strategic impact include:
Professional licenses on the mainland that require a local service agent to act as a liaison with government authorities without ownership rights.
Commercial arrangements like event sponsorships or partnerships with Emirati individuals or entities, where a formal agreement clarifies roles and obligations.
Generally, UAE free zones do not require sponsorship agreements, enabling 100 percent foreign ownership. However, some special types of commercial partnerships within these free zones might need a formal agreement.
At HHS Lawyers, our corporate lawyers are knowledgeable about these regulations, and their efforts ensure that all agreements are in line with the laws of the UAE, both in the mainland and in the free zones when appropriate, thereby protecting the business interests involved.
Poorly written or ambiguous agreements are mostly a cause of business sponsorship arrangements leading to legal disputes.
They may vary in matters involving:
Our lawyers in Dubai work directly with you to understand your business arrangement and prevent any gray areas. Also, we provide an agreement that will be enforceable in law as well as fair, practical, and effective.
If you require professional assistance with drafting sponsorship agreements in Dubai, UAE, our team of dedicated drafting lawyers is ready to help. Contact HHS Lawyers today to schedule an initial consultation and discuss your requirements. Our team of skilled drafting lawyers is dedicated to providing you with comprehensive legal services tailored to your specific needs.