A local agent is an individual or corporate entity that compiles with UAE company law and the regulatory requirement for a foreign investor, i.e. a non- UAE or GCC national who wishes to set up and run their business in the UAE. As per the UAE law, in respect to the establishment of a mainland company foreign investors are required to have local sponsors that is a UAE national. Generally, a sponsor in trade for fee hands over the complete control of the business and the authority to run the business to the foreign investors with the help of a power of attorney. This moreover helps all profit to be held within the title of business and nothing within the title of the local partner.
There are 3 types of local sponsors, namely.
These foreign and civil companies with foreign investments ought to have a local service agent designated to comply with the rules and regulations. These agents do not have any share within the firm moreover are not normally included within the operations of the firm or its business and are paid a lump sum fee annually.
As per the UAE Companies Law and UAE Civil Law, to begin a company with limited liability in a mainland, a least of 51% local equity is a mandate. Despite foreign equity in such a company not surpassing 49%, the profit distribution from it can be mutually concurred upon by concerned parties.
As the name suggests, a corporate local sponsor as a UAE National is a corporate firm that will hold 51% of the shares of the company with the other shares owned by the foreign investor or partners. This type of sponsorship is mainly helpful for starting an LLC in Dubai.
