Miss This, And You’ll Be Stuck with a Local Sponsor You Don’t Need
June 25, 2025
September 24, 2025
June 25, 2025
September 24, 2025
Topic Summary
1. Understanding the Local Sponsor Requirement Has Evolved
Historically, mainland business owners in the UAE were required to appoint a local sponsor holding 51% ownership. However, recent regulatory reforms now permit 100% foreign ownership in many sectors, significantly reducing the necessity for local sponsors.
2. Know Your Business Activity and Jurisdiction
Not all business activities qualify for 100% foreign ownership. Certain sectors may still mandate a local partner. It is critical to ascertain your intended business activity and the relevant jurisdiction’s rules before proceeding with mainland company formation.
3. Dubai’s New Company Law and Ownership Rules
The introduction of the UAE Federal Decree-Law No. 26 of 2020 revolutionised ownership structures by allowing full foreign ownership in most sectors outside free zones. This law effectively eliminates the default requirement for a local sponsor in many cases.
4. Free Zones Offer an Alternative Without Sponsorship
Free zones in Dubai allow 100% foreign ownership without the need for a local sponsor. Choosing a free zone can be advantageous for small consultancies or trading businesses seeking full control and easier administrative procedures.
5. Engage with a Professional Local Advisor
Given the complexities and ongoing regulatory updates, consulting with a professional business setup advisor or legal expert in Dubai is essential. They can guide you through the specifics of ownership rules, helping you avoid unnecessary commitment to a local sponsor.
For years, if you Googled how to start a business in Dubai, you’d see one thing pop up again and again: “You need a UAE local sponsor.”
Cue confusion. What’s a local sponsor? Why would someone else own 51% of your company?
And what if you just want to run a small consultancy or trading business on your own?
The truth? That rule has changed. Dramatically.
If you’re planning mainland company formation in the UAE and you’re worried about the term “local sponsor UAE mainland”, this blog is your reset button. Because in 2025, a whole new setup model exists, one that gives you full control, no local sponsor needed, and a clean, 100% ownership route through Meydan Free Zone.
Let’s break it all down, what’s changed, who still needs a sponsor, and why this shift matters more than ever.
What Is a Local Sponsor in Dubai and Why Was It Mandatory
In the traditional UAE mainland model, a local sponsor was a UAE national or entity that legally owned 51% of a foreign investor’s company. This applied across most sectors, retail, trading, manufacturing, and hospitality. Foreigners could manage day-to-day operations, but not hold full ownership.
The idea was to promote local economic inclusion. But for modern entrepreneurs, especially solo founders, SMEs, and digital-first firms, this created complexity, extra cost, and legal ambiguity.
Understanding Local Sponsor in the UAE Mainland and Sponsor-Free Options
Fast-forward to 2021: the UAE introduced sweeping reforms to the Commercial Companies Law, allowing 100% foreign ownership in most business activities.
That means the old model of needing a UAE local sponsor to launch on the mainland is no longer the only way. Today, foreign entrepreneurs can form a company in Dubai with full control, no middlemen, and no equity handover.
And for those who want the benefits of mainland access without the legacy red tape. Meydan Free Zone is the modern answer. It’s a sponsor-free setup designed for how today’s founders operate, agile, digital, and in control from day one.
Over 2,500 commercial and industrial activities are now open, education, e-commerce, IT, logistics, consulting, F&B, and more. And when you choose Meydan Free Zone, you’re not just skipping the local sponsor, you’re fast-tracked with licensing, banking, and visa support built into one fully digital platform.
3 Common Types of Local Sponsor Models You Should Know
Meydan Free Zone eliminates the need for all three sponsorship types, even for consultancy and professional licenses. You get:
- 100% foreign ownership with zero equity handover
- No revenue sharing or sponsor involvement in profits, operations, or decision-making
- One-click compliance with a fully digital setup system
- Freedom to scale without red tape or third-party dependencies
- No revenue sharing or annual fees
- Faster setup timelines
- Greater legal clarity and control
- Easier expansion across the UAE or internationally
In short, Meydan Free Zone replaces the outdated sponsorship structures with a platform built for solo founders, growing startups, and global entrepreneurs, fast, compliant, and fully in your control.
Mainland Company Formation UAE: Who Still Needs a Local Sponsor
A handful of strategic sectors still require a UAE local sponsor or shareholder:
- Defence or military equipment
- Banking and finance
- Insurance
- Oil & gas
- Security services
- Medical retail (some niche sectors)
- Telecom and postal services
For everything else, you're free to go solo. Including professional services, if you work through Meydan Free Zone, even the local service agent isn’t required.
This makes Meydan Free Zone the go-to destination for entrepreneurs who want flexibility without the legal and financial burden of sponsorship.
Sponsor-Free Setup in Dubai with Meydan Free Zone
We always highest searches on Can I Set Up Without a Sponsor in Meydan Free Zone?
The answer is simple: Yes, you can. In fact, that’s what makes Meydan Free Zone the smarter choice. At Meydan Free Zone, we offer a sponsor-free setup with 100% foreign ownership, giving you full control from day one, no middlemen, no equity handover, no revenue sharing.
Here’s how easy it is:
- Select your business activity from over 2,500 options.
- Use our free name check tool to validate your trade name.
- Apply for your license, get it issued in just 60 minutes.
- Open your bank account and apply for your visa, all on the same day.
- Manage everything online: renewals, staff and family visas, and more, on one digital platform.
With Meydan Free Zone, there’s no need for a UAE local sponsor, no hidden fees, and no delays, just a straightforward, compliance-ready business launch.
Skip the Local Sponsor Hassle, Launch Fast with Meydan Free Zone
You don’t need to stress about finding a local sponsor in the UAE mainland anymore.
The rules have changed. Business in Dubai has moved on. And smart founders are taking better, faster routes.
If things like sponsorship rules, shareholding laws, or mainland setup still feel like a maze, you’re not alone, and you don’t have to stay stuck. Meydan Free Zone gives you 100% ownership, no sponsors, and a license in just 60 minutes. You choose your business activity, apply online, and manage everything in one place, with no paperwork, and no delays. It’s fast, clear, and fully under your control from day one.
With Meydan Free Zone, you start your business with compliance, not the complications of a local sponsor.
FAQs
1. Do I still need a local sponsor for the UAE mainland business setup?
In most sectors, the requirement for a local sponsor in the UAE mainland has been removed. You can now fully own your business without sharing equity.
2. What’s the difference between a UAE local sponsor and a Free Zone setup?
A UAE local sponsor means giving 51% ownership to a national or entity. In contrast, Free Zones like Meydan Free Zone offer 100% foreign ownership with no middlemen.
3. Is Meydan Free Zone an alternative to mainland company formation UAE?
Yes. Meydan Free Zone gives you the benefits of UAE business access without the old mainland company formation UAE restrictions.
4. Which business activities still need a local sponsor UAE mainland?
A few strategic sectors like defence, banking, and oil still require a local sponsor UAE mainland. But for most services, trading, and consultancy firms, it’s no longer needed.
5. Why are entrepreneurs switching to sponsor-free setups in Dubai?
Sponsor-free setups mean faster licensing, lower cost, and full control. That’s why platforms like Meydan Free Zone are now the top choice.
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