In the context of the United Arab Emirates (UAE), the term “sponsor” holds two distinct meanings. While we typically associate sponsorship with financial support, the UAE has a unique definition for this term. In the UAE, “sponsor” refers to a local citizen or government entity who is required to establish a company in UAE territory or obtain residency visas. This article will shed light on the eligibility criteria for UAE sponsorship and how UAE sponsor function within the local business landscape.
Sponsorship in the UAE
1. UAE Sponsor for Company Formation:
When establishing a local company in the UAE, a local sponsor plays a vital role. The local sponsor is a UAE citizen who holds 51% of the shares in the company as a silent shareholder. They act as the authorized representative for the company before UAE government authorities. It’s important to note that the UAE sponsor is not involved in the day-to-day operations of the business but assists in liaising with local authorities for obtaining licenses, renewals, labour permits, and other administrative requirements. The UAE sponsor is also responsible for certain legal and financial liabilities of the company. However, it is possible to outline the limitations of the sponsor’s powers through an additional agreement.
2. Local Sponsor for Free Zone Companies:
In the case of free zone companies, which allow 100% ownership by foreign nationals, the concept of a UAE sponsorship differs slightly. While you have full ownership of the company, the free zone authority acts as your “local sponsor” when applying for residency visas. This sponsorship is limited to visa-related matters and does not involve ownership or control of the company. The free zone authority acts as a facilitator in the visa processing, charging the regular residency visa processing fees without any additional charges.
3. Specialized License and Sponsorship:
Certain business activities in the UAE, such as operating a tourism company, require specially regulated licenses. In these cases, the UAE sponsorship must meet specific qualifications and have a clean record within the UAE. The sponsor ensures that the operations of the company comply with the applicable regulatory framework, safeguarding the interests of both the business and the authorities.
4. Sponsorship for Residency Visas:
In the UAE, sponsorship also pertains to residency visas. When employed by a company in the UAE, your employer becomes your sponsor for your visa. As an investor or employee, if you apply for visas for your dependents (spouse and children) in Dubai, you become their local sponsor in Dubai. This means you are responsible for their residency and the associated legal obligations.
Demystifying Sponsorship in the UAE
Understanding the concept of UAE sponsorship is crucial when establishing a business or obtaining residency visas. Local sponsors, whether as silent shareholders or free zone authorities, play a significant role in fulfilling legal and administrative requirements. Local sponsors in Dubai act as representatives and liaise with local authorities on behalf of the business in Dubai. By comprehending the eligibility criteria and responsibilities of sponsors in the UAE, individuals and businesses can navigate the process more effectively. For further information on company registration in the UAE and the role of local sponsors, feel free to contact us. Book your call now.
