The term local sponsor is an umbrella term used in Dubai and the United Arab Emirates to refer to designated shareholders or dormant partners and local service agents of mainland companies with foreign investments in the region. It is important that the sponsor is Emirati and has a family or Gincia card.
According to United Arab Emirates corporate and civil law laws, setting up a limited liability company or LLC, which means the company is a non-offshore and non-free zone, is a requirement for less by 51%. Despite a foreign participation of no more than 49%, the two parties involved can still agree on the distribution of the profits. Full operational capacity is also given to the foreign partner (s), or even to a third party, as indicated in the statutes. Only UAE nationals or companies 100% owned by UAE nationals will be considered a nominated partner and will receive a lump sum each year.
The role of the local service
The local service agent is necessary for branches of foreign companies and civil companies or the sole owner of a partnership with foreign investment to comply with business regulations. These agents are not required to share the company and are not involved in the operations of the company. They receive an annual lump sum. Sponsors under normal circumstances do not interfere with business operations. Operational powers are vested in the general manager or director, but local sponsors still have the power to underwrite all corporate affairs related to immigration and labor.