When setting up a business and or a company in UAE you have to have a local sponsor or a service agent.
Sponsors in United Arab Emirates are very important. A sponsor is a person or the company who take your responsibility in front of authorities to bring you in the country for the purpose of visit, employment, job or business.
Sponsors do not involve in company’s administration mostly and is agreed upon yearly charges according to the contract.
The profits and loss can be divided regardless of the percentage of shares. Expat can have the power of attorney and work independently without being interfered in organizational matters.
This doesn’t apply to the companies and foreign businesses in free zone.
In free zone the free zone acts as your local sponsor and does not own anything in your company. Free Zone Company can be fully owned by the investor.
Types of sponsors
A sponsor can be anyone, it can be a person or it can be UAE own company.
Sponsorship in UAE can be divided up to three types.
Local service agent
This type of sponsorship works when a UAE own company holds the 51% of share of a foreign group or a company.
This type of sponsorship works when a UAE national on individual level holds the 51% of a foreign company’s share or in a foreign business. That individual can be the businessman, government employee or professional.
Local Service agent
For all professional service licenses holding business you need a local service agent who does not hold any percentage from your business, infact, he or she will deal with the authorities and help you setup your business in returns of service fees.