The local service agents and sleeping partners also known as the nominee shareholders are referred to as the ‘Local Sponsor‘ in the UAE. In order to set up a business in the UAE mainland, there is the need of a local sponsor (a UAE National) according to the United Arab Emirates Law. The usual purpose of a Local sponsor is to assist the communication between authorities and government departments. The sponsor should have a family membership card and also should be an Emirati.
The different types of local sponsorship available in the UAE are as follows:-
• Individual local sponsor
The Individual local sponsor should be a UAE citizen, be it male or female. This business is sponsored by an Individual Emirati sponsor and holds a 51% stake in the company. For starting a commercial business in Dubai, this type of sponsorship is suitable.
• Corporate local sponsor
In order to start a business in the Dubai mainland, it is required to appoint a local sponsor for a corporate body that is registered in Dubai. This is a common type of sponsor and can be of any local or government authority.
• Local service agent
Here the Local service agent who is a resident agrees to act as the sponsor. A local service agent is needed for civil companies with foreign investment.
Things to be noted before hiring a local sponsor
• One of the important things to be made sure of is that the sponsor is a resident of Dubai. If he is not, then for the rest of the process and government formalities he should be consulted every time.
• If the chosen local sponsor is a government employee, this will be of great advantage to the company due to having a direct connection to the government agencies.
• Seeking the advice of a business consultant in Dubai is an important step for an investor.