UAE Local Sponsor
A local sponsor is a mandatory requirement for any foreign entrepreneur looking to establish a business in the mainland of the UAE. The sponsor must be a UAE national (Emirati citizen) and typically holds a 51% share in the company, depending on the business activity and legal structure.
However, if you’re planning to set up your business in a UAE Free Zone, this requirement does not apply. Free Zone jurisdictions allow 100% foreign ownership, enabling expatriates to fully control their business operations without the need for a local partner or sponsor.
In the UAE, a local sponsor is a UAE national (Emirati) who holds 51% ownership of a mainland business, as required by UAE law for most mainland company setups. In exchange, the local sponsor may offer support in funding, products, services, or exposure through participation in events, trade shows, and other business platforms, thereby helping expand your reach to potential customers.
Finding a reliable local sponsor for your mainland company in Dubai or anywhere across the UAE can be a complex process. That’s where Earnest Consultants comes in. With extensive experience in facilitating mainland business setups, Earnest Consultants is well-positioned to help you find the right local sponsor who understands your industry and business goals.
A local sponsor in the UAE must possess a family book (Gincia) and act either as a shareholding partner or a local service agent (LSA) depending on the business activity and legal structure.
Local sponsorship can take one of two forms:
Individual Sponsor: An Emirati acting in their personal capacity.
Corporate Sponsor: A company that is 100% owned by UAE or GCC nationals.
According to UAE Companies Law and Civil Law, a Limited Liability Company (LLC) established in the mainland must have at least 51% UAE national ownership, with the remaining 49% owned by the expatriate partner. However, profit-sharing arrangements can be contractually agreed upon, giving foreign investors flexibility and protection.
Certain professional and civil companies may be 100% owned by expatriates, where the local sponsor acts as a Local Service Agent (LSA) without owning any equity in the business.
Looking to simplify your mainland company setup?
Contact Earnest Consultants today and let us assist you in finding a trustworthy and strategic local sponsor tailored to your business needs.
Why the UAE Should Be Your First Choice for Business Setup
The United Arab Emirates (UAE) is a nation driven by innovation and a commitment to being a global leader in advanced technologies and economic development across all sectors. With world-class infrastructure, investor-friendly government policies, and a welcoming attitude toward foreign investors regardless of their country of origin, the UAE stands out as a premier destination for business setup and investment.
Key Reasons Behind the Success of Investments in Dubai, UAE:
- Strong Government Support: Proactive policies supporting import and export, empowering suppliers to reach global markets.
- Strategic Location: A resource-rich region with geographical advantages for trade and commerce.
- Global Connectivity: Seamless international access via over 100 airlines and 175 shipping lines.
- Liberal Trade Environment: No trade barriers, no quotas, and no exchange controls.
- Full Repatriation of Capital and Profits: Investors can repatriate 100% of their capital and earnings.
- Tax-Free Environment: No personal or corporate income taxes.
- Free Currency Exchange: No restrictions on currency conversions or transfers.
- Advanced Transportation Infrastructure: Efficient and modern transport networks across land, sea, and air.
- Robust Financial and Service Sectors: Well-developed banking, legal, and professional services.
- Flexible Government Policies: Streamlined procedures and regulations that ease business setup and operations.
- High Quality of Life: Access to a premium lifestyle, including top-tier hospitality, education, healthcare, and research facilities.
Types of Business Entities in the UAE
The UAE offers a diverse range of business formation options tailored to suit various investment needs and operational scopes. Below are the primary types of company formation structures available:
Mainland Company
Registered under the UAE Department of Economic Development (DED)
Allows full access to the local UAE market
Can conduct business across the UAE and internationally
No restrictions on office location within the emirate
Free Zone Company
Established within designated Free Zones across the UAE
100% foreign ownership permitted
Ideal for export-oriented businesses
Enjoys tax benefits, simplified setup procedures, and customs privileges
Offshore Company
Formed for international business operations
No physical office required within the UAE
Not permitted to trade within the UAE market
100% foreign ownership, asset protection, and confidentiality
Limited Liability Company (LLC)
Popular for both local and foreign investors
Minimum of two and maximum of 50 shareholders
Liability limited to the extent of shareholding
Can operate locally and internationally
Branch of a Foreign Company
Extension of a parent company registered outside the UAE
Allowed to conduct business activities similar to the parent company
Must appoint a local service agent
Civil Company
Suitable for professional services (e.g., doctors, lawyers, consultants)
100% foreign ownership allowed for specific nationalities and professions
Requires a local service agent if owned by a foreign national
