When it comes to Business Setup in Dubai, few questions are asked more frequently than: “Can I start a business without a local sponsor?”. For years, foreign investors have assumed that when starting a mainland business in Dubai, you have to give away 51% ownership to an Emirati partner. This assumption has often created anxiety for those wanting to start a business because naturally, entrepreneurs want total control of their venture.
But with the new changes to UAE company laws, Business Setup in Dubai has now become much more flexible. In many cases, today, you can own your business outright – with no local sponsor. This news adds even more appeal to Dubai for global investors who want to tap into this dynamic economy.
Understanding the Local Sponsor Requirement
Traditionally, if you wanted a mainland business set up in the Dubai, UAE law required a local sponsor – an Emirati national or emirate-held company – to be the majority (at least) 51% owner of your business. While the arrangement of local sponsor would often go on to be a silent partnership (the sponsor had little to no involvement in the day-to-day activities), you were not the full legal owners of your business.
The reasoning behind the requirement of local participants was to drive regular economic participation by Emirati nationals and companies in the UAE economy. This model, however, caused uncertainty, apprehension or dread for many international entrepreneurs making decisions around ownership, their appropriation to profits, or their long-term business planning in general.
The Shift Towards 100% Foreign Ownership
The UAE made a historic reform to its Commercial Companies Law in 2021 which allows for 100% foreign ownership of many business activities in mainland UAE without the need for a local sponsor.
The reform has changed the landscape of doing business in Dubai, allowing foreign investors to have 100% control over their operations, assets, profits, and any complicated side agreements and profit-sharing arrangements.
Is It Really Possible to Set Up a Business Without a Local Sponsor?
Yes – Business Setup in Dubai without a local sponsor is absolutely possible, but it depends on your chosen business activity and the jurisdiction you operate in.
Let’s look at your two main options:
1. Mainland Business Setup in Dubai Without a Local Sponsor
With the new law, most commercial and industrial activities in Dubai’s mainland now allow 100% foreign ownership. This means you can apply for your business license directly with the Department of Economy and Tourism (DET) without involving a local partner.
Eligible sectors include:
- E – commerce
- IT services
- Management consultancy
- Manufacturing
- Advertising and marketing
- Hospitality
However, some strategic industries – such as oil & gas, defence, and certain banking services – still require a local partner due to regulatory policies that are in place.
2. Free Zone Business Setup in Dubai
Free zones have always permitted 100% foreign ownership, even before the mainland reforms. Forming your company in a Dubai Free Zone continues to be one of the most desirable options for foreign investors.
Dubai has more than 30 Free zones, each with its own specific sector. These include:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Internet City
- Dubai Media City
- Dubai International Financial Centre (DIFC)
Free zones are a good solution, and especially beneficial if your activities are largely international (or web-based). Please note that Free Zone Companies may only obtain their trade from the Mainland through indirect means, i.e. by using a local distributor or establishing a branch on the Mainland.
Steps for Business Setup in Dubai Without a Local Sponsor
Whether you choose the mainland or a free zone, the process for business setup in Dubai is straightforward if you follow the right steps:
- Select Your Business Activity – Ensure it’s on the list of approved activities for 100% ownership.
- Choose Your Jurisdiction – Mainland or free zone, depending on your goals.
- Reserve a Trade Name – Ensure it complies with UAE naming rules.
- Get Initial Approval – A no – objection from the authorities to proceed.
- Prepare Your Documents – Passport copies, business plan, tenancy contract (if required), and other required paperwork.
- Apply for Your License – DET for mainland or the relevant free zone authority.
- Apply for Visas – For investors, employees, and dependents.
- Open a Corporate Bank Account – A must for conducting transactions.
Why Partner with a Business Setup Consultant?
For you to set up your business in Dubai, it is easier now than ever before to set your business up regardless of not having a local sponsor. However, just like anything legal, administrative and procedural, there are still a number of requirements to follow. If you do not successfully follow any single step, you can run into delays in your timing or increase costs.
This is where partnering with a trusted business setup consultant like Docman can make all the difference. Our team helps entrepreneurs:
- Choose the right jurisdiction for their business
- Select eligible activities for 100% ownership
- Prepare and process all legal documents
- Obtain trade licenses quickly
- Manage visa applications and renewals
- Handle ongoing PRO services for smooth operations
By utilizing professional assistance, your business setup in Dubai can proceed smoothly without hassle or deadline pressure.
New rules and positive conditions have emerged. If the barriers of needing a local sponsor had interrupted your setup in Dubai, excuses are now gone.
Thanks to the progressive reforms from the UAE, foreign investors do not need to partner with a local sponsor in order to fully own their companies across multiple sectors – either by using a mainland license or in one of Dubai’s many free zones.
If you are ready to leverage the opportunities, Docman will make sure you are covered for every step of the process – from selecting your business activity to finalizing your license approval.
Your business setup in Dubai can now be 100% yours. Let’s make it happen.
