Foreign investors must understand the importance of the role and functions of local UAE sponsor.

One of the main challenges to start and operate a business in Dubai mainland is to find a local sponsor or service agent who is going to vouch for your trustworthiness in good faith before the competent authorities to let you in the country for the purpose of business, employment, or visit.

The arrangement of a local sponsorship is a compulsory condition for a foreign investor who wishes to start up a business venture or make an investment in Dubai mainland. The mainland Dubai strictly adheres to the UAE government sanctioned shareholding structure which is 51% local share and 49% expat share. A foreign person must find a local sponsor, a UAE national, who is going to hold 51% of the company’s shares.

Mostly, local sponsors play the role of a silent or dormant business partners and they do not take part in the administration or management of the business operations and are happy to receive a yearly income from the foreign investor according to the rules of profit-sharing laid down and formally agreed upon in the contract.