Instead of getting an individual local shareholder on board, several foreign entrepreneurs search for corporate sponsorship services in Dubai. These corporate sponsorship services are provided by UAE companies held by one or more UAE nationals. Instead of an individual person, the UAE company will become the 51% local shareholder in the new company. This corporate sponsorship service offers more financial security and individual freedom to the foreign company owner.

UAE company formations like a Limited Liability Company (LLC, Dubai mainland company) need a 51% local sponsor. If a UAE national becomes the sponsor, the Emirati holds 51% of the company shares in his individual capacity. The UAE national does not have to be a businessman or needs any experience in the relevant field. With his 51% of the company shares, he can overrule the 49% foreign shareholder and influence several administrative processes and business decisions.

With a corporate sponsorship, the foreign entrepreneur maintains complete control. In general, corporate sponsors in Dubai do not want to get involved in the day-to-day business. The foreign business owner keeps his full power and the company management.

Often corporate shareholders holding 51% do not insist to receive 51% of the corporate profit. Corporate sponsors in Dubai often get an annual lump sum payment only. Therefore, the foreign entrepreneur retains 100% of the financial benefits.

To regulate the rights and obligations of a local sponsor, side agreements are needed. It could be hard to get such documents in place, as they need to be in Arabic. Another advantage of a corporate sponsor in Dubai is, that the company provides side agreements already drafted from their experienced legal counsels. So, the rights and obligations can be secured, and the company formation in UAE can be speed up.