Do You Need a Local Sponsor to Start a Business in the UAE in 2025?

For many years, one of the main concerns of foreign investors in the UAE was the requirement to have a local sponsor holding 51% of the shares in mainland companies. This arrangement limited foreign ownership and often created uncertainty for entrepreneurs seeking full control over their businesses.

With recent reforms in the UAE Commercial Companies Law, this requirement has significantly changed. As of today, most business activities in the UAE mainland allow 100% foreign ownership, removing the need for a local sponsor in many cases.

When is a Local Sponsor Not Required?

• Mainland Companies: In most commercial, industrial, and service activities, foreign investors can now own their businesses fully without a UAE national partner.
• Free Zones: Local sponsorship has never been required in free zones, where foreign investors have always been able to own 100% of their companies.

When Might a Local Sponsor Still Be Needed?

• Certain strategic sectors such as oil & gas, defense, and telecommunications may still require local ownership or government involvement.
• Some professional activities (like legal practice) may require a local service agent.
• Companies planning to engage in highly regulated activities may need additional approvals that involve Emirati participation.

Benefits of No-Sponsor Requirement

• Full control of company ownership and profits
• Flexibility in restructuring or selling the business
• Increased attractiveness of the UAE as a global investment hub
• More simplified and transparent company setup

Costs and Setup Considerations

Even without a sponsor, businesses must still comply with regulatory requirements such as:

• Trade license fees
• Office lease and Ejari registration
• Approvals from authorities for specific regulated sectors

Dubai and the wider UAE continue to position themselves as investor-friendly markets, giving entrepreneurs more freedom and confidence to establish their ventures.

Expert Guidance with Caspian Accounting and Bookkeeping
Determining whether your chosen activity requires a local sponsor or qualifies for 100% ownership can be complex. Caspian Accounting and Bookkeeping provides expert guidance to help you choose the right structure, obtain necessary approvals, and ensure full compliance.

Ready to set up your UAE business with confidence? Contact Caspian Accounting and Bookkeeping today for tailored advice and professional support.