Do foreign companies require a “sponsor” for all types of commercial activities?
As a rule, a number of people or bodies are referred to as “sponsor” in Dubai, the other emirates of the UAE and the GCC countries. This could be the employer, the business partner, the local partner or the sleeping partner in a joint venture, for example. However, the term “sponsor” is predominantly used in connection with the fact that as per the UAE Companies Law, foreigners and foreign companies may only hold minority shareholdings in commercial entities. A minimum of 51% of the company capital must be held by a national of the UAE or a corporate body, which is wholly owned by a national of the UAE, the so-called “sponsor”. Representative offices, branch offices or professional companies, which may remain in full foreign ownership require a service agent, also known as “sponsor”. Direct trade is the only commercial activity that can be carried out by a foreign company without the need for a sponsor. 2. Trading 2.
