What is a sponsor and what significance does he have as part of a company formation in Dubai or elsewhere in the United Arab Emirates (UAE)?

The term "sponsor" has various meanings which depend on the legal form of the company you are incorporating. In case you are setting up a company with limited liability ("LLC") in the territory of the United Arab Emirates, the sponsor has to be by law the majority shareholder of the LLC. This condition remains valid despite the issuance of the new commercial companies law (UAE Federal Law No. 2 of 2015). By contrast, the sponsor merely serves as a so-called national service agent when establishing a dependent subsidiary of a foreign mother company (so-called branch) and possesses no opportunities to influence shareholders or managers. In any case, the sponsor either has to be an Emirati national or a company with 100% of its shares held by Emirati nationals.

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