Business Setup in the UAE comes with a number of regulations. The UAE company formation can be divided into many ways:
- The Dubai Mainland Company
- The Abu Dhabi Mainland Company
- Free Zone Company Formation
- Incubation business and startups
Setting up a company in the UAE and operating a business in the Dubai or any other emirates in the Mainland area requires a local sponsor be compulsorily chosen. When a foreign investor wants to start a business in the UAE law states that a local sponsor is appointed for representative dealings with the ministries and the government for getting the several paperwork done.
A local sponsor is an Emirati or a UAE national, who acts as your service agent for your business in the UAE and he usually acts as a sleeping partner of your company.
Being a mandatory requirement, it’s a real, inevitable challenge for foreign investors to find the right local sponsor in Dubai, appropriate for their line of business.
Usually, the local service agent 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 service agent is to be paid an annual fee for his services.