Business Setup UAE: Can You Open a Business in Dubai Without a Local Sponsor?
Yes, you can! If you’re exploring business setup UAE options, especially in Dubai, then you’re likely considering whether a local sponsor is mandatory. The good news is that recent reforms now make it possible for foreign entrepreneurs to start businesses in Dubai without requiring a local Emirati sponsor. This guide will show you how.
Understanding Sponsorship in Dubai
Traditionally, foreign investors needed a UAE national to own 51% of shares in mainland businesses. However, business setup in UAE has evolved. With new legislation, full foreign ownership is now permitted in most sectors.
This advancement has opened doors for entrepreneurs looking to start a company without an Emirati partner.
Free Zones: The Best Route for 100% Ownership
One popular way to start a business in Dubai without a local sponsor is by setting up in a UAE free zone. These zones allow 100% foreign ownership and are ideal for startups and SMEs.
Benefits of Free Zones
- Full foreign ownership
- Tax exemptions (corporate and import/export)
- Easy repatriation of profits
- Fast-tracked setup procedures
Examples of popular free zones include Dubai Multi Commodities Centre (DMCC), Dubai Silicon Oasis (DSO), and Jebel Ali Free Zone (JAFZA).
Business Setup UAE: Mainland Without a Local Sponsor
Thanks to the UAE Commercial Companies Law amendment in 2020, certain mainland activities now offer 100% foreign ownership. This means you can legally operate a business in the mainland without needing a UAE national sponsor—if your business activity qualifies.
Conditions for 100% Ownership
To be eligible for this route, your business must fall under the permitted list of activities set by Dubai’s Department of Economy and Tourism (DET). Notable industries include:
- Consulting firms
- Tech startups
- Manufacturing
- Professional services
However, some sectors, especially those related to oil and gas, defense, or utilities, still require Emirati ownership.
Step-by-Step Guide to Launch a Business Without a Local Sponsor
Step 1: Choose a Business Activity
Select an activity that meets the criteria for 100% foreign ownership. You can consult the official UAE Government Portal for the updated list of eligible licenses and sectors.
Step 2: Select a Legal Structure
Most entrepreneurs opt for a Limited Liability Company (LLC) or a Sole Establishment based on their goals and industry. Your chosen structure should align with UAE laws and the ownership rules of your business activity.
Step 3: Select a Location
Decide between setting up in a free zone or on the mainland. Consider the nature of your business, your customer base, and whether you require direct access to the UAE market.
Step 4: Reserve a Trade Name
Submit your intended company name to the Department of Economic Development (DED) or your chosen free zone authority for approval.
Step 5: Apply for Initial Approval
Once your trade name is approved, apply for initial approval to confirm that the government has no objection to your business operations.
Step 6: Submit Required Documents
You’ll need:
- Passport copies
- Visa page (if applicable)
- Memorandum of Association (for LLCs)
- Application forms and approvals
Step 7: Lease Office Space
Physical office space is mandatory for mainland businesses. Free zones often offer flexible desk and office rental packages to support startups.
Step 8: Obtain Your Business License
Pay the license fee and collect your business license once all documents are reviewed and approved.
Need help understanding license types? Read our guide comparing freelancer vs. professional trade licenses.
Alternative: Start a Business in Free Zones
If you want minimal bureaucracy, consider launching in a free zone. This alternative offers flexibility, cost benefits, and simplified procedures for foreign entrepreneurs.
Top Free Zones in Dubai
- Dubai Internet City – ideal for IT firms
- Dubai Media City – perfect for media and PR agencies
- Dubai Healthcare City – focused on healthcare startups
Free zones often offer bundled packages that include licensing, visa services, and office solutions—making business setup in UAE even more streamlined.
Can Expats Own 100% of a Business in Dubai?
Yes. Both mainland reforms and free zone policies now allow 100% expat ownership. This has made the UAE one of the most attractive destinations for global entrepreneurs.
Don’t forget to learn from others’ experiences—check out common mistakes entrepreneurs make when opening a company in Dubai to stay ahead.
Pros and Cons of Going Without a Local Sponsor
Pros
- Full control over business operations
- No profit-sharing with a local partner
- Greater ownership of intellectual property
- More flexibility in international expansion
Cons
- Limited access to certain government contracts (only open to locally owned firms)
- Not all business activities are eligible
- Legal and administrative processes may be confusing for new entrepreneurs
Business Setup UAE: Things to Keep in Mind
Before you dive in, consider the following:
- Double-check ownership laws for your sector
- Work with a PRO or business consultant
- Stay updated with UAE regulatory changes
The UAE frequently updates its business laws to attract more foreign investment, so it’s crucial to stay abreast of policy shifts.
Final Thoughts: Yes, You Can Start Without a Sponsor
If you’ve ever wondered whether you can open a business in Dubai without a local sponsor, the answer is a resounding “Yes.” Thanks to forward-thinking legislation and free zone privileges, business setup in UAE is more accessible than ever for foreign investors. Whether through a mainland route or a free zone jurisdiction, you can retain full ownership and enjoy all the benefits of operating in Dubai.
To ensure a smooth journey, conduct thorough research, choose your business activity wisely, and consider seeking expert guidance.
For more detailed insights on setting up businesses in Dubai, check out our related guides on setting up as a foreign investor or mistakes to avoid during registration.
