Local sponsors in the UAE play a crucial role in facilitating business setup and operations for foreign investors. Here’s a comprehensive overview of everything you need to know about local sponsors in the UAE:

What is a Local Sponsor in the UAE?

A local sponsor in the UAE is typically a UAE national who acts as a service agent for a foreign-owned business operating in the mainland. This sponsor is responsible for ensuring compliance with local laws and regulations, facilitating interactions with government agencies, and managing administrative tasks. Local sponsors are essential for businesses operating in the UAE mainland, as they provide a connection to the local community and help navigate the complexities of doing business in the country1234.

Types of Local Sponsors

There are three main types of local sponsors in the UAE:

1. Individual Sponsor: An Emirati national who agrees to sponsor a business and holds at least 51% of the company’s shares. This type of sponsorship is common for LLC businesses in Dubai124.
2. Corporate Sponsor: A UAE-based company that sponsors a business and holds at least 51% of the company’s shares. This type of sponsorship is suitable for commercial, professional, and industrial licenses124.
3. Local Service Agent (LSA): An Emirati national who acts as a representative of the company in all dealings with government departments. This type of sponsorship is applicable to professional companies where the foreign investor owns 100% of the company24.

Benefits of Having a Local Sponsor

Having a local sponsor in the UAE offers several benefits to foreign investors:

1. Compliance with Local Laws: Local sponsors ensure compliance with local laws and regulations, which is crucial for maintaining a smooth business operation.
2. Government Interactions: Local sponsors facilitate interactions with government agencies, making it easier for foreign investors to navigate the complexities of doing business in the UAE.
3. Administrative Support: Local sponsors manage administrative tasks such as visa applications, labor approvals, and other necessary paperwork.
4. Business Setup: Local sponsors are necessary for setting up a business in the UAE mainland, as they provide a connection to the local community and help navigate the setup process1234.

How to Choose a Local Sponsor

When selecting a local sponsor, it is essential to consider the following factors:

1. Reputation: Choose a sponsor with a good reputation in the business community.
2. Family Background: A sponsor from a well-reputed family in Dubai can be beneficial for the business.
3. Government Connection: A government employee as a local sponsor can provide better connections to government agencies.
4. Fees and Services: Clearly define the fees and services to be provided by the local sponsor.
5. Verification: Verify the sponsorship deed agreement before signing it4.