Local Sponsor in Dubai
Local Partner, Sponsor or Service Agent
A local partner or sponsor in UAE refers to a nominee shareholder or local service agent, Usually for mainland companies,
Therefore The local sponsor must be an Emirati individual or a company whose shareholders are UAE nationals 100%
And as per the UAE commercial companies law and UAE civil law
To start a mainland LLC or professional company in Dubai and UAE you must have a local partner or local service agent
Besides, the local partner should have 51% in mainland LLC companies
But a side agreement along with the MOA can be made to protect the rights of the foreign partners,
In the side agreement, the local sponsor waives any rights to the capital or profits of the company.
Now onto the all-important question, do you need one?
Well, if you wish to conduct commercial, industrial or trading activities in the UAE mainland then the answer is usually yes. However, there are a few exceptions
As we’ve established, professional services businesses do not require local sponsorship– and neither do branch or representative offices
Branch and representative offices of existing foreign businesses can be 100% foreign owned and are set up through a local services agent.
It is important to note, however, that neither of these business types is standalone
They do not have a separate legal identity and are extensions of their foreign parent company.
While branch and representative offices are similar in many respects
There is one clear distinction: branch offices may engage in commercial activity in the UAE mainland and earn profits
Though they must only conduct activities similar to that of its parent company
A representative office on the other hand, can’t earn profits in the UAE
And must limit its activities to marketing and promoting its foreign parent’s products and services.
The local sponsor does not have any involvement in the business daily activities except for helping in obtaining permits
Such as trade license, visas & other official paperwork, and claims only annual fixed fees.