The Role of a Local Sponsor in Company Registration in Dubai
                     The Role of a Local 
Sponsor in 
Company 
Registration in 
Dubai
An Overview
Dubai is one of the world’s most attractive business hubs, offering a strategic 
location, tax advantages, and a business-friendly environment. For 
entrepreneurs planning company registration in Dubai, UAE, understanding the 
role of a local sponsor is essential—especially when setting up a mainland 
company. 
What Is a Local Sponsor?
A local sponsor is a UAE national (or a company fully owned by UAE nationals) 
who partners with foreign investors during mainland company formation. 
Traditionally, the sponsor holds 51% of the company’s shares, as required by 
UAE commercial laws for certain business activities. However, this does not 
always mean control over daily operations. 
Why Is a Local Sponsor Required?
For mainland company registration in Dubai, UAE, a local sponsor is often 
mandatory to comply with legal and regulatory requirements. The sponsor acts 
as a legal representative, enabling foreign entrepreneurs to operate within the 
UAE market without restrictions on business location or client base. 
Responsibilities of a Local Sponsor
A local sponsor typically plays a non-operational role. Their responsibilities 
may include: 
 Assisting with trade license issuance and renewals 
 Supporting government approvals and documentation 
 Representing the business before local authorities when required 
Operational control, profits, and management rights are usually protected 
through legal agreements between the sponsor and the investor. 
Local Sponsor vs. Corporate Sponsor 
Instead of an individual sponsor, businesses can opt for a corporate sponsor—a 
UAE-based company that provides sponsorship services. Corporate sponsors 
are often preferred for their professionalism, transparency, and structured 
agreements, reducing risks for foreign investors. 
Choosing the Right Local Sponsor
Selecting a reliable local sponsor is crucial for smooth Company Registration in 
Dubai, UAE. Clear contractual terms, transparent fees, and well-defined roles 
help ensure long-term business stability and compliance. 
Conclusion 
A local sponsor plays a vital role in mainland company formation in Dubai. With 
the right sponsorship arrangement, entrepreneurs can enjoy full operational 
freedom while benefiting from Dubai’s dynamic business ecosystem. 
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