Sole Establishment in Ajman

Setting up a business in Ajman offers many benefits to both local and foreign investors. Excellent logistics facilities, state-of-art infrastructure, flexible legal framework, and tax incentives are some of the many advantages of starting your venture in the Emirate of Ajman. Combined with proximity to Dubai and Sharjah, easy access to ports and international airports, Ajman offers entrepreneurs, SMEs, and conglomerates with a hub that supports highly lucrative investments.

For business setup in Ajman, one needs to decide whether they want to start a business individually or with partners. For individual establishment in Ajman, Sole Proprietorship is the legal entity to go with.

Sole Proprietorship Formation in Ajman

Sole Proprietorship is an establishment owned by an individual proprietor to operate an economic activity (commercial, industrial, professional, agricultural, or real property). A sole company's financial liability is linked to the proprietor responsible for all its financial obligations.

A single establishment can either conduct commercial activities or professional activities in the Emirate where it is registered. Following the existing laws, only UAE and GCC nationals (subject to certain conditions) are allowed to set up such companies for carrying out commercial activities. The business activities are those activities that are described in Article 5 – 6 of the UAE Federal Law No. 18 of 1993 on Commercial Transactions. A few of these activities are trading, real estate development, import-export, manufacturing, etc.

However, expatriates are also permitted to form the Sole Establishment only for conducting professional activities, such as medical services, management consultancies, engineering consultancies, IT consultancies, legal consultancies, and similar services. The Individual Establishment, owned by a foreigner, should appoint a National Service Agent following UAE laws. A Local Service Agent should be a UAE national (either individual or a company), whose primary job is to act as a liaison between the company and the government entities, for example, in applying for work permits, visas, etc. An agency agreement regulates the relations between the prominent companies and the agents.

To sum up, Sole Proprietorship in Ajman for carrying out commercial activities can be formed only by UAE nationals or GCC nationals (subject to certain conditions). Expatriates can only form Sole Proprietorships to provide professional and consultancy services provided that the Local Service Agent is appointed.

Advantages of Establishing a Sole Proprietorship in Ajman

  • The company can legally practice professional services anywhere in the emirate, including the Ajman Free zones.
  • No constraints on the location where the company can rent/buy office premises.
  • Foreign professionals can retain 100% foreign ownership in the business.
  • The government has forever waived any paid-up capital requirements.

Procedure to Register a Sole Proprietorship in Ajman

The regulatory body handles business registration in Ajman in the Ajman DED (Department of Economic Development). The steps are as follows -

  1. Pay fees and obtain a business license.
  2. Draft a Memorandum of Association (MOA).
  3. Submit the required documents to get an initial approval.
  4. Decide on the business activity to finalize the business license.
  5. Appoint a National Service Agent (NSA) that must be either a UAE national or a wholly owned by the UAE national.

The documents required to complete this procedure are -

  • No Objection Certificate (NOC) from the current UAE residence visa sponsor, if applicable.
  • Proof of education, professional qualification, or experience, if required.
  • Copy of passport of the sole trader and the appointed manager
  • Professional/ bank reference letter for the General Manager.
  • Certified proofs of address for the manager.
  • Copy of UAE residency visa.
  • CV for the manager.

All documents must also be translated into Arabic by an official translator before they can be presented to the UAE's authorities.

How can we help?

To complete all these steps and processes, if one needs a helping hand from an expert in Sole Proprietorship company formation in Ajman, we at Commitbiz will provide you with all the assistance.

Our business setup consultants will guide you step by step to make important business-related decisions and also make you aware of the complete procedures for incorporating your business. Contact us today.