Setting up a business in Dubai is an attractive option for many entrepreneurs, thanks to the city’s thriving economy, strategic location, and modern infrastructure. But one common concern that many entrepreneurs have is the requirement for a local sponsor if you’re looking to set up a business on the Dubai mainland. What if you want to avoid this and still tap into the lucrative Dubai market?
The good news is that you can do your business setup in Dubai without needing a local sponsor by establishing your company in one of the UAE’s free zones, such as those in nearby Sharjah. Here’s how you can get started.
Step 1: Understand the Local Sponsor Requirement
For many business types in Dubai, a local sponsor—usually a UAE national—is required to hold a majority (51%) stake in your company. This applies mainly to mainland businesses, where you’re allowed to operate within Dubai and its surrounding areas.
While this local sponsorship arrangement may seem like an obstacle, it’s important to know that certain industries—like those related to consulting or services—can be set up in Dubai’s free zones without the need for a local sponsor.
Step 2: Explore the Sharjah Free Zone Advantage
If you’re looking to start your business in Dubai but want to avoid the local sponsor issue, you can set up your business in a Sharjah free zone. Free zones are areas designated by the UAE government where businesses can benefit from tax exemptions, 100% foreign ownership, and fewer regulations.
Sharjah is just a short drive from Dubai, so businesses set up in its free zones can easily tap into the Dubai market, offering the best of both worlds: foreign ownership with access to Dubai’s resources, talent, and clients. A business setup in Dubai free zone or Sharjah free zone gives you access to a host of benefits.
These zones cater to a wide range of business activities, from consultancy and IT services to manufacturing and logistics, giving entrepreneurs the flexibility to set up businesses in different industries.
Step 3: Choose the Right Free Zone for Your Business
Each free zone in Sharjah has different advantages, so it’s important to select the one that best suits your business. When choosing a free zone, consider:
- The nature of your business
- Office space requirements
- Location advantages (proximity to Dubai or key markets)
- Available facilities and infrastructure
For expert help in setting up a consultancy business in Dubai, connect with a free zone that offers a business cost calculator, like SPC Free Zone, to better understand how you can complete a low cost business setup in Dubai.
Step 4: Apply for Your Business License
Once you’ve selected the right free zone for your business, the next step is applying for your business license. In Sharjah’s free zones, the application process is streamlined and straightforward, allowing you to get your license quickly.
Here’s what you’ll generally need to do:
- Submit your business plan: This is a brief outline of your business objectives, the services or products you plan to offer, and your target market.
- Provide identification documents: This includes your passport copy and any relevant permits if you’re not already a resident.
- Office space requirements: Depending on the free zone, you may need to show that you have a physical office space or a virtual office.
- Choose your business name: This will need to be approved by the free zone authority.
Once your application is approved, you’ll receive your business license, allowing you to officially start operations.
Step 5: Set Up Your Office and Business Infrastructure
When establishing your business in a Sharjah free zone, setting up your office is a key part of the process. Many free zones offer flexible office space options, from shared workspaces to private offices. This flexibility is particularly beneficial for startups and small businesses that want to avoid the high costs of renting large office spaces in Dubai.
Additionally, many free zones also offer business services such as:
- Virtual offices: For businesses that do not need a physical location.
- Co-working spaces: Ideal for consultants or small businesses that need professional, flexible office environments.
- IT infrastructure: Some zones even provide support for IT setup and telecommunication services.
Step 6: Register for Taxes and Apply for Visas
Once your business license is in place, you’ll need to ensure you’re compliant with UAE tax regulations. Most businesses in the UAE, including those in free zones, must register for VAT if their annual revenue exceeds AED 375,000.
Additionally, Sharjah free zones also offer visa services, allowing you to sponsor yourself and your employees. Depending on the free zone, you can apply for a variety of visas, from investor visas to employment visas, to ensure your team is legally employed in the UAE.
Step 7: Market Your Business
With the legal and operational aspects sorted, it’s time to turn your attention to growing your business. Establishing a strong online presence is crucial—consider building a website and using social media platforms like LinkedIn to connect with potential clients in the UAE and beyond.
Networking within the UAE business community is also essential. Attend industry events and workshops, connect with fellow entrepreneurs, and establish partnerships through your free zone that can help you expand your reach.
Conclusion
Starting a business in Dubai without a local sponsor is entirely possible, thanks to the UAE’s free zones. By establishing your business in a Sharjah free zone, you can retain full ownership, avoid the complexities of local sponsorship, and still gain access to the Dubai market.
The streamlined licensing process, cost-effective office solutions, and tax benefits make Sharjah a smart choice for entrepreneurs who want to start their business in the UAE. So it’s time to hit the ground running!
