An individual local sponsor is where a UAE national in their own personal capacity holds 51% of shares in a mainland limited liability company. The Emirati sponsor – being the majority shareholder of the LLC may give a Power of Attorney to the foreigner in exchange for a fixed annual fee. There are a few business activities where the requirement is for a local sponsor to have certain qualifications and experience and they must hold 100% of the shares in the mainland company again in exchange for a fixed annual fee.
Referring to Article 10 – UAE Commercial Companies Law (CCL) 2021 specifies that a UAE mainland Limited Liability Company must have a minimum of 51% share capital owned by a UAE national. Often this arrangement is required for a mainland Department of Economic Development (DED) commercial license type or an industrial license business registration. Creation Business Consultants provide a corporate sponsor or corporate nominee agreement to satisfy this legal requirement.
Article 329 – CCL 2021 specifies that a professional license company must have an appointed agent. Often this arrangement is required for a mainland DED professional license registration. Creation Business Consultants provide a National Service Agent (NSA) also known as a Local Service Agent (LSA) to satisfy this requirement.
Legal Requirement: Meets the local ownership criteria for mainland businesses.
Silent Partner: Usually doesn’t interfere in daily operations, granted full control via a Power of Attorney (PoA) and a shareholder agreement.
Fee-Based: Receives a fixed annual fee, not necessarily a share of profits.
DATE: JANUARY 2, 2022 – IMPORTANT UPDATE: KEY AMENDMENTS REGARDING LOCAL SPONSORS AND CORPORATE NOMINEES FOR DOING BUSINESS IN MAINLAND DUBAI AND THE UAE.
The UAE has undergone significant legal reforms in recent years, particularly with the introduction of the UAE Commercial Companies Law (CCL) in 2021. These changes have profoundly impacted the role of local sponsors and corporate nominees in mainland Dubai and the UAE.
Relaxation of Ownership Restrictions:
- The CCL now allows 100% foreign ownership in most business activities on the UAE mainland, meaning that foreign investors can establish mainland companies without the need for a local sponsor in many cases.
- However, certain sectors—such as banking, insurance, and oil and gas—may still require a local sponsor.
The Role of Corporate Nominees:
- Even if 100% foreign ownership is permitted, a corporate nominee may still be required to fulfill certain legal formalities.
- Our corporate nominees are UAE-based entities that act as local partners, holding a nominal shareholding in the company.
- They do not have an active role in the management or operations of the business.
Among the many benefits of entering a corporate nominee sponsorship are:
- Full control of your company.
- 100% financial benefits.
- Full control of company voting rights.
- Access to protective side agreements designed to provide greater shareholder protection.
- All documentation your business will need.
