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The local sponsor and the service agent — do you actually need one?

The rules have changed, and most activities today allow full ownership for foreigners. But some cases still require a partner or a service agent. We explain the difference and protect your right.

The difference between a local sponsor and a service agent

A local partner holds a share in the company and takes part in profits and liability according to the contract. A service agent is a local party that handles government transactions for an agreed fee, and holds no share in the company.

The difference matters a great deal: whoever holds a share has rights over profits and decisions, and whoever only provides a service does not. This must be written clearly.

A quick comparison

ItemLocal partnerService agent
A share in the companyYes, per the contractNo
A right to profitsAccording to the shareNo, receives an agreed fee
The roleA participant in ownershipHandles government transactions
When it's requiredSome strategic activities or the founder's choiceSome activities and authorities

The requirement depends on the activity and the emirate. We verify it officially before you pay any amount.

How we protect you as a founder

A written agreement

We draft an agreement setting out the rights, fees and duration of the relationship.

Protecting your money

Your money or account is never handed to anyone without safeguards.

Verifying the requirement

We first make sure your activity requires a partner or agent at all.

Clear fees

The annual fee is stated in the written quote, with no surprises.

Beware of unclear arrangements

Never sign any agreement that gives another party control over your money or your company without a contract that protects your rights. What we see most often:

  • Verbal promises that don't appear in the contract
  • Fees that rise after setup without prior agreement
  • Signing papers without understanding their content
  • Giving broad powers over the bank account

Talk to a lawyer before you sign anything.

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Straight answers

Common questions, clear answers.

Is a local sponsor still mandatory?

Not in most activities today, since a foreigner can own fully. But some strategic activities may require local participation. We check your activity specifically.

Does a service agent own part of my company?

No. A service agent holds no share, and receives an agreed fee for facilitating transactions. This must be stated in a written agreement.

Do I need either in a free zone?

Usually not, since free zones normally allow full ownership. We confirm by zone and activity.

How much does a service agent cost?

It varies by authority and activity, and we state it clearly in the written quote before any commitment.

Still have a question?

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Talk to a lawyer
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