Dubai, one of the world’s most popular business hubs, offers a welcoming environment for entrepreneurs from all over the globe. If you’re considering starting a company in Dubai, you may have heard of two different ways to set up your business: with a sponsor or without one. Both options are available, and understanding the difference can help you make the best choice for your business.

What Does It Mean to Set Up a Company With a Sponsor?

In Dubai, foreign nationals usually need a local sponsor (a UAE national) to operate a business in certain regions, especially if you want to set up in the mainland area. This sponsor typically holds a 51% stake in your company, while you, as the foreign investor, hold 49%. The sponsor acts as a local partner, but you still have control over the daily operations of your business.

Having a sponsor allows you to access the wider UAE market and take advantage of many mainland opportunities.

What Does It Mean to Set Up a Company Without a Sponsor?

Setting up a business without a sponsor is possible, but it’s typically done in free zones. Free zones are special areas in Dubai that offer more freedom to foreign investors. In a free zone, you can have 100% ownership of your company, meaning you don’t need a local partner or sponsor. This makes it an attractive option for entrepreneurs who want to retain full control over their business.

Free zones also have fewer restrictions when it comes to business activities, and they often provide tax incentives and other benefits. However, companies based in free zones are generally limited to operating within the zone or internationally, rather than in the mainland market.

Which Option is Best for You?

• Mainland (With a Sponsor): Ideal if you want to do business directly with the local market, have a presence in Dubai itself, or take part in larger government contracts. However, the sponsor will hold a 51% stake in your business.
• Free Zones (Without a Sponsor): Perfect if you’re more focused on international trade or specific industries like technology, media, or manufacturing. You’ll enjoy full ownership and tax benefits, but your access to the local market will be limited.

Why Dubai?

Dubai is a global business center, offering access to international markets, world-class infrastructure, and a highly skilled workforce. Whether you choose to set up in the mainland or a free zone, Dubai provides a business-friendly environment with simple processes for company formation. With options to set up with or without a sponsor, it’s easier than ever for entrepreneurs to start their business in this dynamic city.

In short, Dubai offers flexibility for business owners. You can choose to have a local sponsor if you’re aiming for a mainland presence, or set up shop independently in one of Dubai’s free zones for full control over your company. Either way, you’ll be entering one of the world’s most exciting and profitable markets.