Set up a Business in Dubai without a Local Sponsor

Published On - 16th February 2025

Dany Michael

Dubai has long been a hub for global entrepreneurs, offering a strategic location, business-friendly policies, and a thriving economy. Traditionally, foreign investors were required to have a local Emirati sponsor who would own at least 51% of their company. This arrangement often raised concerns about control and profit-sharing. However, with recent regulatory changes and the growth of free zones, it is now possible to set up a business in Dubai without a local sponsor. In this article, we’ll explore the various options available for foreign investors who want full ownership of their business in Dubai.

Setting Up in a Free Zone

One of the easiest ways to start a business in Dubai without a local sponsor is by registering in a free zone. These are designated areas that allow foreign investors to own 100% of their companies while benefiting from simplified regulations and tax advantages.

Key Benefits of Free Zones:

  1. Full Foreign Ownership – Unlike mainland companies, free zone businesses do not require a local partner.
  2. Tax Benefits – Many free zones offer corporate tax exemptions and zero personal income tax.
  3. Customs Privileges – Import and export duties are often waived for businesses operating within a free zone.
  4. Ease of Setup – The registration process is straightforward, with minimal paperwork and quick approval times.
  5. Profit Repatriation – Business owners can transfer 100% of their profits and capital abroad without restrictions.

Popular Free Zones in Dubai:

  • Dubai Multi Commodities Centre (DMCC) – Ideal for commodity trading businesses.
  • Dubai Internet City (DIC) – A hotspot for IT and tech startups.
  • Dubai Media City (DMC) – Designed for media, marketing, and creative companies.
  • Dubai Healthcare City (DHCC) – Focuses on medical services, research, and healthcare innovation.

Mainland Business Setup with 100% Ownership

In 2021, the UAE government introduced a major reform allowing full foreign ownership of certain mainland businesses. Previously, only specific sectors like technology and manufacturing could be fully foreign-owned. Now, a wider range of industries can operate without needing an Emirati sponsor.

Main Benefits of Mainland Business Setup:

  • No Geographic Restrictions – Unlike free zone companies, mainland businesses can operate across the UAE and engage with local customers.
  • Access to Government Contracts – Mainland companies can bid for lucrative public sector projects.
  • Unlimited Business Activities – More flexibility in terms of services and trade opportunities.

Choosing Between Free Zone and Mainland Business

Deciding between a free zone or mainland setup depends on your business needs:

  • If you plan to trade internationally or require tax benefits, a free zone is the best option.
  • If you want to serve the local UAE market or work with government entities, a mainland business is more suitable.

Final Thoughts

Thanks to Dubai’s evolving business regulations, entrepreneurs no longer need a local sponsor to start a company. Whether you choose a free zone setup or take advantage of the new mainland ownership rules, you can now establish and grow your business with full control. By evaluating your business needs and understanding the legal framework, you can make an informed decision and successfully launch your venture in Dubai.