The most common type for UAE local companies is Limited Liability Company. All UAE Local Companies should hold one of the following licenses:
The corporate structure of UAE local company and shares allocation will depend on its specific activity. In commercial and industrial license, local sponsor is required and maximum foreign ownership permitted in UAE limited liability companies is 49%. In professional licenses only service agent is required and 100% foreign ownership is permitted for sole establishments.
Only commercial licenses require a "local sponsor”. The local partner/sponsor will usually be a silent partner, and is required by UAE Company law to own 51% of the company's capital. The local partner/sponsor is not involved in the operations of the company, but will assist in obtaining visas, labour cards, and issuing the license. In most cases, they will be paid a lump sum and/or a percentage of profits or turnover.
Professional licenses and branch or representative offices of foreign companies require a "Service Agent". Companies practicing professional activities can either be sole establishments or civil works companies.
The service agent of a sole establishment need not hold any percentage of the company establishment capital. For a civil works company, the agent must hold at least 1% of the company's capital.