Starting a business in Dubai does not always require a local Emirati sponsor. In 2021, the United Arab Emirates (UAE) government removed the requirement for local sponsors for foreign-owned businesses (Read more about this here). This move was a part of the UAE government's efforts to increase the ease of doing business in the country.

If you are planning to set up your business in Dubai, whether on the mainland or in a free zone, and are confused about how to navigate business setup in Dubai without a local sponsor, this blog is for you. We will discuss in detail how to set up a business in Dubai without a local sponsor.

How to Start a Business in Dubai Without a Sponsor

Here’s a step-by-step guide on starting a UAE business without a local partner: 

• Step 1: Select a business activity. You can choose between trading, consulting, manufacturing, and e-commerce. Based on your business activity, you will need to apply for a business license. For instance, if you decide to set up a company that sells goods or services, you will have to apply for a commercial license. Without a business license, you cannot do business in the UAE. Dubai South Business Hub Free Zone offers over 3,500 business activities, making it easier to match your business goals with the right license category.

• Step 2: Select between a free zone and a mainland business setup based on your business goals, ownership preferences, and target market. For example, if you need tax exemptions and a quick business setup, choose a free zone in Dubai.  There is no personal income tax, but businesses registering their companies in a free zone must register for corporate tax with the Federal Tax Authority within 90 days of company formation. Depending on the business and the revenue or profit thresholds crossed, you may or may not be subject to the 9% corporate tax rate.

  Moreover, free zones offer a quick, streamlined business setup process. At Dubai South Business Hub, you can get a business license in a day, provided your documents are verified and there’s no third-party approval requirement, reducing the time typically required for Dubai company formation.

• Step 3: Choose a trade name depending on your jurisdiction and activity. Pick a unique company name that complies with the UAE's naming rules. You can check if your trade name is available using Dubai South Business Hub Free Zone’s Name Checker before submitting your application.

• Step 4: Lease office space. Based on the license type and whether you register in mainland or in free zone, you will either need to rent physical office space or opt for a virtual office/flexi-desk. 

• Step 5: Open a corporate bank account with a UAE bank using your trade license and company documents to manage business finances and remain compliant. 

Cost of Starting a Business Without a Local Sponsor in Dubai

The cost of starting a business without a sponsor majorly depends on the jurisdiction you choose and your trade license. Business setup packages range between AED 15,000 and AED 25,000 or higher, depending on the jurisdiction. For instance, if you are a freelancer looking for a cost-effective business setup package, choose free zones over the mainland. Free zones provide cost-effective business setup plans for freelancers and entrepreneurs. 

At Dubai South Business Hub Free Zone, the business license (irrespective of the business activity) starts at AED 12,500. This price includes the flexi-desk lease. Our pay-as-you-grow model enables you to add to your license when you are ready.  This means you can add more than five business activities, add visas, or add value-added services, when needed at an additional cost.

However, if you want a clear cost estimate for setting up a business in Dubai, check out our Business Setup Cost Calculator. Our cost calculator gives you an itemised breakdown of expected licensing and administrative fees, helping you make an informed financial plan without guesswork.

Can UAE Residents Start a Business Without a Sponsor?

Yes. UAE residents can set up a business without a local sponsor. You can either opt to get your license in a free zone, or, in the case for Mainland licenses, you will need to select a mainland activity that permits 100% foreign ownership. Submit all your documents to the concerned authority, DET in the case of the mainland and the free zone authority if you choose a free zone, and you will get your license.

Can Foreigners Start a UAE Business from Outside the Country?

Yes. Foreign nationals can register a UAE business remotely. Several free zones support a full digital setup; Dubai South Business Hub Free Zone is one of them. 

1. No physical presence required during company formation 

2. Selected free zones offer remote incorporation with digital signatures 

3. UAE residency visas can be applied for after the company is established (optional). However, those needing visas will need to come to the UAE at a later stage to undergo medical and biometric screening for the EID/residency issuance. 

4. Bank account opening may require an in-person visit, although some banks offer remote onboarding 

Final Thoughts

In the end, the no-sponsor rule has empowered foreign investors to start a business in Dubai’s free zones and mainland. Moreover, the emergence of free zones that provide 100% foreign ownership and zero personal income tax has made Dubai a perfect spot for starting a business.  

For investors seeking an easy, fast, and cost-efficient business setup, Dubai South Business Hub Free Zone offers a streamlined process: select your business activities, reserve your company name, estimate your setup fees on the cost calculator, make your payment, submit your application, complete your identity verification, and get your business license in a day! For more information, you can reach out to us or book a free consultation. 

Frequently Asked Questions (FAQs)

1. Is it possible to start a business in Dubai without a local sponsor?

Yes, you can start a business in Dubai without a local sponsor. In 2021, the UAE government amended the Commercial Companies Law, allowing foreign and local investors to set up businesses without a sponsor.

2. Which business setup option offers 100% foreign ownership in Dubai?

Free zones offer 100% foreign ownership. In the case of mainland, there are some strategic activities which may require local sponsorship. 

3. What documents are required to open a business without a sponsor in Dubai?

When starting your business with Dubai South Business Hub Free Zone, you just need a passport. Other free zones and mainland authorities may require additional documents to start. 

4. Can I start a Dubai business without a sponsor while living outside the UAE?

Yes, you can start a business in Dubai virtually. Dubai South Business Hub Free Zone helps you obtain your business license without a physical visit. If you are in the UAE, you can call us at 800-DSHUB (37482). Alternatively, you can email your query to grow@dubaisouthbh.com  or schedule a free consultation through our website.  

5. How much does it cost to start a business in Dubai without a local sponsor?

The cost of setting up a business in Dubai ranges between AED 15,000 and AED 35,000. At Dubai South Business Hub Free Zone, the license fee starts at AED 12,500.