What is it?
As per the UAE Companies Law, a UAE National is required to hold a minimum shareholding of 51% in a limited liability company. UAE Nationals typically provide local sponsorship as a service against a fixed fee per annum. The foreign investor of the company maintains control of the management, operation and bank accounts of the Company.
Basics to Consider as a Limited Liability Company (LLC)
Finding the right UAE National to entrust 51% of the equity of your Company can be challenging. You want to ensure you have full control over your business and that your ‘Local Sponsor / Partner’ will be available when you need assistance with the maintenance of your company and support you in the event you face issues with renewals, permits, licensing, visas, etc.
The relationship of the local sponsor and the foreign investor is governed by the memorandum and articles of association of the company. The local sponsor cannot be removed without the amendment of the memorandum and articles of association which requires the signature of all the shareholders.
Separate agreements are also entered into to define the relationship of the parties. It is important to ensure that these separate agreements do not violate applicable laws, which will render them unenforceable.
Civil companies owned by foreign investors and branches of foreign companies are required to appoint a local service agent who will act as their representative in all administrative dealings with government departments. Local service agents, unlike local partners, do not have any shareholding in the civil companies and are not involved in the operations of the company. As with the local partner, they are paid an annual fee for providing this service.
The relationship between the local service agent and the owners of the civil company/branch is govered by a contractual agreement. Termination of the agreement requires the consent of the local service agent.
Still have questions?
Get in touch for corporate sponsorship packages
How We can help
RRED Corporate Services Provider is a Corporate Sponsor. This means that our LLC can act as the 51% UAE National Shareholder for your Company.
RRED’s management team consists of western and regional expatriates who have over 40 years of combined experience in the establishment and structuring and operation of businesses in the UAE. We have our own in-house legal team to ensure that the documents and agreements related to the local sponsorhsip services and/or local service agent services are drafted to ensure compliance and enforceability under law to minimize your risk, and protect you and your investment in the UAE.
- Act as Local Sponsor holding 51% equity in your LLC on your behalf
- Act as Local Service Agent for Civil & Professional Companies, Branch of Foreign Company and Rep Office
- Review and/or preparation of agreements with your existing local sponsor to ensure your protection & rights
All of our sponsorship packages include onboarding procedures from start to finish to ensure no interruption in your business.
Benefits of Corporate vs. Individual Sponsor
Corporate Entity Does Not Die
From Pricing Models to Capabilities
Full Team to Support Your Business Needs
Our Success is Predicated on Your Success