Local sponsor’ is a compulsory term used in the UAE to refer to National service agents and nominee shareholders (mutual partners) in mainland companies with overseas investment. A sponsor must be an UAE national. Functioning a commercial in the UAE Mainland area needs a local sponsor to be compulsory.

As per the UAE Establishments Law and UAE Civil Law, to commence a company with limited liability in a mainland, that is, a non-offshore establishment in a non-free zone, a minimum of 51% local equity is a must. Despite overseas equity in such a company not exceeding 49%, the revenue delivery from it can be mutually settled upon by concerned partners. Comprehensive functioning controls can also be granted to the foreign partner or a third party on the memorandum of association (MoA). Only UAE nationals or companies owned wholly by UAE nationals may be considered for being nominee partner and paid a lump sum amount per year.

Branch of foreign establishments and civil companies (single owner of a partnership) with foreign investments required to have a local service agent chosen to comply with the regulations. The agent does not have any share in the company also are not normally involved in the processes of the company and are paid a lump sum fee per annum.