If you are an outsider and would like to setup a business and or a company in Dubai you have to have a local sponsor or a service agent. Sponsor in United Arab Emirates are very important. You must have a sponsor even if you are visiting Dubai. A sponsor is a person or the company who take your responsibility in front of authorities to bring you in the country for the purpose of visit, employment, job or business.
As per law in United Arab Emirates when you are setting up your company in mainland you are required to have a local resident, a UAE national as your sponsor and he/she should hold the 51% of your business. Sponsor does not involve in company’s administration mostly and is agreed upon yearly charges according to the contract. There are some case where you can do side agreements with the local sponsor but those contracts would not be admissible in court should you ever have to go to the court for any settlement. The investor or the expat holds 49% of the shares but profits and loss can be divided regardless of the percentage of shares. Expat can have the power of attorney and work independently without being interfered in organizational matters.
This doesn’t apply to the companies and foreign businesses in free zone. In free zone the free zone acts as your local sponsor and does not own anything in your company. Free Zone Company can be fully owned by the investor.