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,Business in Dubai is taking leaps and bounds now! Thus, the most straightforward and alluring
choice for anyone wishing to launch a business in Dubai is a single proprietorship, particularly
for those seeking total control. In many ways it’s a surprising corporate structure in the United
Arab Emirates, not least of which that it grants one full ownership and operational management
of the company. Before deciding if it’s the right one for you, though, there are some essential key
points that you need to be aware of.
Allow us to examine the necessary processes for sole proprietorship business setup in Dubai
and throughout the United Arab Emirates.
Key Takeaways
- The cost of setting up a sole proprietorship in Dubai starts at AED 18,500, and it can vary depending on the business type.
- Sole proprietorship allows you operate legally in any of the seven emirates and the freezones.
What exactly is a Sole Proprietorship in Dubai?
A business entity in which the trade license is registered in the name of only one person is called
sole establishment (sole proprietorship). Unlike LLC (limited liability company) and joint
ventures, a sole establishment cannot be owned by an organization or corporation; it is a sole
endeavor.
While the simplicity of having full ownership sounds enticing, there is a major caveat: the
business owner remains fully personally liable for all business debts or obligations. For instance,
when your business has issues importing or paying back, creditors can come after your personal
assets (such as your house, car and savings) in this case.
Who May Register a Sole Proprietorship in Dubai ?
Whether you are from UAE or maybe from a GCC nation, or just an expat in the outside world,
you can actually still open a sole proprietorship in the UAE. Again, it is a difference in both
process as well as the kind of business you run.
UAE Nationals and GCC Nationals
There is much room for variation when it comes to the type of sole establishment you can form
as an UAE and GCC national. Many different business activities are available-some examples
are industrial, commercial, tourism-related business, or professional services. In addition, you
have a whole range of consultancies that fall under one professional license
Foreign Nationals
For foreign expats, the process is relatively more restrictive. Only a professional license can be
filed; this way, they may be allowed to engage in professional activities, such as consultancy.
However, certain consultancy activities will be off-limits to foreigners, only to UAE nationals.
The other requirement is the appointment of a local service agent to help with the formation and
the process of regulation.
Conditions for Setting up a Sole Proprietorship in Dubai
If you’re considering sole proprietorship business setup in Dubai, there are some conditions,
or key terms you should know.
Educational Qualifications: The entrepreneur shall have relevant educational qualifications and
not contradict the type of business activity conducted.
Appointment of Managers: Even though you can appoint a manager to your business, there is
still a limit on the number of managers you can hold if your business falls under a professional
license.
Capital Requirements: A sole business has no minimum capital requirement; therefore, it is
quite advantageous for people looking to start with very little financial investment.
Trade Name: The name of your business must describe the commercial activities that it will
carry out.
Branches: You can have many branches, and each branch can carry out one or all the activities
put on your main business license.
Legal Form Flexibility: The legal form of the business can be changed on application to DED.
Some Specialized Economic Activities: The business owner or registered manager shall, in some
specialized economic activities, be subject to scrutiny by an institution such as American
University in Dubai. This would be at the time of establishing the business and also at the time of
license renewal.
Documents Required for Registration
When registering your sole proprietorship, the following documents are typically required:
- Copy of the shareholder’s passport
- UAE resident visa copy (if applicable)
- No Objection Certificate (NOC) from your current visa sponsor
- Proof of educational qualifications, professional experience, and relevant work history
If you’re appointing a general manager, you’ll also need to provide:
- The general manager’s passport copy
- Certified proof of address for the general manager
- General manager’s resume
- Bank or professional references for the general manager
These should be stamped by the relevant state agencies and translated into Arabic before
submission. For certain forms of business activities and application types, other supporting
documents may be necessary.
The Step-by-Step Process of Setting Up a Sole Proprietorship in Dubai
Here’s a summary of the easiest process to get your sole proprietorship registered in Dubai:
- DED preliminary approval: Following the confirmation that the government does not
have any objection to the business registration, you receive initial approval from DED.
- Obtain an approved trade name: You will send three options of your trade name to
DED. One will be approved for your business.
- Sign the Local Service Agent (LSA) Agreement: If this applies you and your LSA will
sign an agreement, you both must be in attendance.
4. Finalize office space: You have to obtain a physical office location for the company.
- Obtain additional approvals: Depending on which type of business that you are
conducting you might have additional approvals from governments or other
nongovernment agency approvals.
- Make the payment: Once you receive all the approvals, you will be given the payment
voucher. You will then make the payment and voilà! you get your trade license!
Benefits of Sole Proprietorship In Dubai
- Full Control: You, as a foreign national, have complete control over your business
decisions and profits. There is no hassle of complicated profit sharing but face all types of
responsibilities and liabilities.
- Operational Flexibility: You can operate legally in any of the seven emirates and the
several free zones offered.
- Location: You can choose any location to set up the office. One can either rent or buy,
thereby being cost-effective.
- No Paid-up Capital: The government of the UAE has eliminated the minimum paid-up
capital requirement. This enables you to put more money into your business growth.
What is the Cost of Setting Up a Sole Establishment in Dubai ?
Setting up an individual entrepreneurship in Dubai is more cost-effective than with other
forms of business setup. The initial fee ranges around AED 18,500, though this would depend on
your specific business operations. Some businesses may need extra approvals or special licenses,
which would add to the amount. It is always best to seek out business consultants like Emifast to
receive a more differentiated cost estimate for your specific business.
Ready to Start Your Sole Proprietorship in Dubai ?
There are many advantages to establishing a sole proprietorship in the United Arab Emirates. It
makes sense that this business form is so well-liked given total management, flexible operations,
and no minimum capital requirements. Regardless of your nationality—UAE, GCC, or
foreign—the procedure is straightforward and, with the correct help, far simpler than you may
imagine.
And if you’re ready to move on, then why not contact Emifast consultants to receive personal
support. They provide you with exclusive business setup packages and consultations to make
easy work of the process. Reach out to them today and take the step towards sole proprietorship
business setup in Dubai!