Why Do You Need a Local Sponsor To Start Your Own Business in UAE?
If you want to set up your company in the Abu Dhabi mainland, you will need to appoint a UAE national or UAE national Owned company as a local business sponsor for your business. However, the local business sponsor or sleeping partner will make an agreement that he will not have any involvement in the company operations or profit sharing of the company in Abu Dhabi mainland.
A foreign company or individual can have 100% ownership, but a local business sponsor is still required. The local sponsor has no active part in the company business management, operations or profit sharing. Instead, they will act as the representative, while drafting legal agreements and establishing other business documentation required in Abu Dhabi.
Local agents are also referred to as business sponsors, are not involved in the operations of the company. Being a mandatory requirement, it’s a real, inevitable challenge for foreign investors or companies to find the right local business sponsors in Abu Dhabi, appropriate for their line of business.
Usually, the sponsor has no particular role or interest in the business but is appointed for the sole purpose of liaising with the government departments and authorities to obtain labor and immigration approvals, visas and complete other necessary paperwork for the company. The local sponsor is to be paid an annual fee for his services.