Out of these three types of companies in the UAE, the requirement of sponsorship is only for mainland companies. Free zone companies in the UAE cannot do business directly with Mainland companies and offshore companies also cannot do any business within the country directly or indirectly. However, the type of entity you choose depends upon your business activity and the business model. For example, if you are planning to do service or trade with the local market, you should form a mainland company. To form a mainland company in the UAE, in certain circumstances, and for certain activities the investor will require a sponsor and the sponsor will be entitled to hold fifty-one percent of the shares in the company. In the UAE, there are two types of sponsorship. They are:

• Individual local sponsor

• Corporate sponsor