Local Sponsor / Corporate Sponsor

This is a general term used in the UAE for local service agents and nominee shareholders (sleeping partners) in mainland companies with foreign investment. A sponsor has to be an Emirati (UAE national) with a family card (Gincia). Operating a business within the Dubai Mainland area requires an area sponsor to be mandatorily appointed.

As per the UAE Companies Law and UAE Civil Law, to start a corporation in the mainland, that is a non-offshore company during a non-free zone, a minimum of 51% local equity is a must. Complete operational power can be transferred to the foreign partner(s) or a 3 party based on the memorandum of association.

Local Sponsorship within the UAE and Dubai requires an area sponsor for several activities. Note that the Local Sponsor does not participate in investments for business development but only acts as a silent partner. Few industries are located in Dubai and Abu Dhabi, a “strong” local sponsor is important, especially if you would like to enter into business relations with the military, police, or ADNOC (Abu Dhabi National Oil Company). Those companies have strict registration processes, therefore the local partner plays a vital role in deciding the process. The formation process in the UAE is pretty fast and easy if administered properly and with expertise. Overseas entrepreneurs need to find an area sponsor to establish a business in the UAE that would hold a 51% stake in any business. These sponsors can either be local individuals or corporate entities. Corporate sponsorship is usually the simplest option, allowing knowledgeable and secure processes to take place.