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A Sponsor Licence is an official authorization granted by the UK Home Office that allows a UK-based employer to hire skilled foreign nationals from outside the UK (and Ireland).
Without this licence, a business cannot legally issue a Certificate of Sponsorship (CoS), which is a required reference number that a foreign worker needs to apply for a work visa (like the Skilled Worker visa) to come and work in the UK. To obtain and keep a licence, the employer must meet strict eligibility criteria, demonstrate a genuine need for the role, and comply with various ongoing duties, such as monitoring their sponsored employees and reporting changes to UK Visas and Immigration (UKVI).