Due to recent changes, starting businesses in the UAE, particularly in Dubai, has become easier. In this article, we will review the updated requirements and inform you if you need a sponsor when opening a company in Dubai. Additionally, the paper will highlight the advantages of engaging a business setup advisor to simplify things.
Shift in Sponsorship Requirements
Typically, setting up companies in Dubai required partnering with local sponsors, who would own 51% of them. That rule kept most foreign investors away because it meant sharing control and profit with someone else. However, these rules have been changed to make Dubai an attractive international commercial centre.
100% Foreign Ownership: A Game Changer
The most significant change is the permission for 100% foreign ownership across most sectors. This means that, as an overseas investor, you can own your company entirely without needing any local sponsors. This move has created many opportunities for global entrepreneurs and made Dubai an even more appealing business address.
Exceptions to the Rule
Despite full foreign ownership being the general trend, a few exceptions remain. Local sponsorship is still required for several specialised sectors, as the local partner should own 51% of the company. These are among those that either touch on strategic national concerns of the UAE or areas where the government wants to keep its hold strong.
Why You Might Still Need a Local Sponsor?
However, in some cases, having a local partner could be advantageous, even though there is less need for local sponsorship. Certain business activities can still be more conveniently carried out with knowledge or networks at the ground level. Moreover, UAE market experts and cultural regulatory navigators can provide significant support.
The Role of Business Setup Consultants
Due to the changing regulatory landscape, business setup consultation is highly advised. They will provide you with current information pertaining to existing legislation and determine whether your business needs a local sponsor. Additionally, they can help you through all stages of setup, ensuring legal requirements have been met and your business starts off on a proper footing.
Steps to Open a Company in Dubai Without a Sponsor
- Right Business Activity: Make sure that your business activity is among the categories that allow 100% ownership by foreigners.
- Choose Company Structure: Determine the business entity you wish to establish, such as a sole proprietorship, limited liability company, or branch office.
- Register Your Company: Complete the necessary registration requirements with the Department of Economic Development (DED) or the relevant free zone authority.
- Obtain Permits: Depending on their nature, some businesses may require specific licences. A business setup consultant can assist you in identifying and obtaining these.
- Rent an Office Space: Many Dubai companies need a physical space for work. This step entails locating and renting an appropriate office area.
- Start Operating Bank Account: Open a commercial bank account, which will assist you in managing corporate cash flow more efficiently.
Benefits of 100% Foreign Ownership
- Complete Administrative Control: Because of full ownership, there is no requirement for input from the local partner when making decisions.
- Profit Ownership: You take home all the money generated through your venture.
- Simplicity in Management: Administering your company can be more accessible and straightforward than involving a local partnership.
The Bottom Line
The ability to open a company in Dubai without a local sponsor marks a significant milestone for foreign investors. With most business sectors now allowing 100% foreign ownership, Dubai is more accessible than ever for entrepreneurs worldwide. However, it is essential to stay informed about the specific requirements of your business activity and consult with a business setup advisor to navigate the legal landscape effectively.
