Sponsorship Arrangement
According to the UAE Companies Law, the business setup of a Mainland Limited Liability company that involves foreign investment mandates the involvement of a local sponsor. The business partner must be a UAE national or a corporate entity. Finding a local sponsor in Dubai, UAE for the business always remains a demanding task for startups and new entrepreneurs in the Emirates. A local sponsor is a UAE national or a citizen of UAE (locally known as Emirati). The local sponsor does not interfere in the day-to-day operations of the LLC company. The foreign company is bound to pay a lump sum amount every year for the services offered by the local sponsor in UAE. A corporate business partner is similar to a local business partner and the difference is that the former is a business entity and the latter is an individual. A corporate business partner is a corporate entity fully owned by UAE nationals and comprises of a board of directors. A power of attorney acts on behalf of the corporate company. The profit and the revenue generated by the foreign company need not be shared with the sponsor. Sponsorship is mandatory for a wide range of enterprises that belong to the trading and commercial business category.
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