Business Setup UAE: How to Open a Company in Dubai Without a Local Sponsor
Interested in business setup UAE but want to avoid the need for a local sponsor? Many entrepreneurs aspire to establish a company in Dubai without relinquishing ownership. Fortunately, there are options that allow you to do just that. In this guide, you’ll discover how to open a company in Dubai without a local sponsor, while retaining 100% foreign ownership.
Why Choose Dubai for Your Business
Dubai is globally recognized as a hub for business and innovation. Its strategic location, modern infrastructure, and tax-friendly policies make it an ideal destination for entrepreneurs. In recent years, legislation has evolved to support business setup in UAE without the traditional local sponsor requirement, especially within free zones and specific mainland arrangements.
Understanding the Role of a Local Sponsor
In the past, setting up a company on the mainland required a UAE national to act as a local sponsor, holding 51% of shares. This model created hesitancy among foreign investors looking for full control. However, reforms introduced through the UAE Commercial Companies Law have shifted this narrative, making it easier to retain 100% ownership in approved sectors.
Options for Business Setup in UAE Without a Local Sponsor
Several pathways allow you to start a company in Dubai without involving a local sponsor. The most common ones include:
- Setting Up in a Free Zone: Offers 100% foreign ownership, full repatriation of profits, and no need for a local partner.
- Mainland Company with Full Ownership: New legislation permits full ownership in specific sectors on the mainland without a sponsor.
Free Zones Offering 100% Ownership
Free zones are designated economic areas offering favorable benefits. Here are some top free zones for business setup UAE:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Internet City (DIC)
- Dubai Silicon Oasis (DSO)
- Jebel Ali Free Zone (JAFZA)
Benefits of Starting a Business in UAE Free Zones
- 100% foreign ownership
- No corporate or personal taxes
- Full repatriation of capital and profits
- No import or export duties
- Quick and easy company incorporation
Key Steps for Business Setup in UAE
Whether you choose a free zone or a qualifying mainland business activity, the steps for setting up your business are similar:
- Define Your Business Activity: This determines licensing options and location suitability.
- Select Jurisdiction: Choose between free zone or eligible mainland jurisdictions.
- Reserve Your Trade Name: The name must comply with UAE naming conventions.
- Apply for a Business License: The license type depends on your business activity.
- Secure Office Space: Can be virtual, shared, or dedicated office spaces depending on the zone.
- Open a Corporate Bank Account: Essential for completing your setup and starting transactions.
Choosing the Right Business Activity
Your business activity determines the licensing authority and whether you’re eligible for full ownership without a local sponsor. Sectors like technology, consulting, e-commerce, and media are among the most common for 100% foreign-owned setups.
Cost of Setting Up a Company Without Local Sponsor
The overall cost of business setup UAE without a local sponsor varies based on several factors:
- Free Zone vs Mainland: Free zones generally offer budget-friendly packages starting around AED 12,000.
- Office Requirements: A shared desk is cheaper than a physical office unit.
- Number of Visas: Costs increase with each additional visa quota.
Sample Cost Breakdown
- License & Registration: AED 10,000–20,000
- Office Space: AED 5,000–25,000
- Visa Processing: AED 3,000–6,000 per visa
Documents Required for UAE Company Setup
Prepare the following documents to streamline your company formation:
- Passport copies of all shareholders
- Visa and Emirates ID (if applicable)
- Business plan (for certain activities)
- No Objection Certificate (for employed individuals in UAE)
Benefits of 100% Foreign Ownership
With the removal of local sponsor requirements, businesses enjoy:
- Full Control: Make independent business decisions.
- Financial Freedom: Keep all profits.
- Legal Simplicity: No shared ownership contracts.
Common Challenges and How to Avoid Them
Some entrepreneurs face delays during business setup in UAE. Avoid pitfalls by:
- Working with a Consultant: Saves time and reduces errors.
- Verifying Free Zone Reputation: Ensure credibility before selecting a zone.
- Choosing the Right Business Activity: Impacts licensing and location options.
Staying Compliant Post-Setup
After setting up, stay compliant to avoid penalties. Key areas include:
- Renewing licenses on time
- Submitting annual audits (where applicable)
- Maintaining visa and immigration guidelines
Conclusion
Opening a company in Dubai without a local sponsor is not only possible, but increasingly common. From free zones to emerging mainland options, entrepreneurs now enjoy greater freedom in business setup UAE. With proper guidance on rules, costs, and procedures, you can launch your business confidently and successfully.
For more information on government policies and business laws in the UAE, visit the UAE Government Portal.
Also, check out our resource on Best Free Zones in UAE for Business Setup for detailed comparisons and insights.
