Ajman has steadily evolved into a promising hub for entrepreneurs and investors looking to set up a business in the UAE. Known for its cost-effectiveness, strategic location, and simplified regulatory procedures, the Emirate offers several business structures - one of the most popular among individuals is the sole establishment in Ajman.
This model is ideal for entrepreneurs who wish to operate independently, maintain complete control over their business decisions, and benefit from the ease of setup that Ajman provides.
Sole Proprietorship Formation in Ajman
A Sole Proprietorship in Ajman is a business owned and managed by one person. The owner is fully responsible for running the company and for any financial obligations or debts it may have.
This type of business can be registered to carry out commercial or professional activities in the Emirate.
For UAE and GCC Nationals:
Only UAE and GCC citizens (under certain conditions) can open a sole proprietorship to carry out commercial activities. These include trading, real estate development, import and export, manufacturing, and similar fields - as listed under the UAE Commercial Transactions Law (Federal Law No. 18 of 1993).
For Foreign Nationals:
Expatriates can also set up a sole proprietorship, but only for professional activities. This covers fields like healthcare, management consulting, engineering, IT services, legal advice, and other consultancy-based services.
However, a foreign-owned sole proprietorship must appoint a Local Service Agent (LSA) who is a UAE national or a company fully owned by UAE nationals. The LSA does not own any part of the business but helps with official procedures such as visa applications, work permits, and dealing with government departments. The relationship between the business owner and the LSA is defined through a formal agency agreement.
Advantages of Establishing a Sole Proprietorship in Ajman
Setting up a sole establishment in Ajman offers a range of benefits that appeal to freelancers, consultants, and entrepreneurs:
- Operational Flexibility: You can legally practice professional services anywhere in the Emirate. This is also applicable for Ajman Free Zone business setup.
- Office Location Advantage: No constraints on the location where the company can rent/buy office premises.
- Complete Ownership: Foreign professionals can retain 100 per cent foreign ownership in the business.
- Ease of Formation: Minimal paperwork and straightforward licensing procedures make setup quick.
- No Paid-Up Capital Requirement: Ajman DED does not mandate minimum capital investment, allowing affordable entry.
- Professional Credibility: Operating under a registered trade name enhances your professional image and market trust.
- Flexible Visa Options: Business owners can obtain residence visas for themselves and their staff.
These factors make Ajman particularly attractive for consultants and service providers aiming to establish a stable and professional presence in the UAE.
Cost of Setting Up a Sole Establishment in Ajman
The cost of setting up a sole establishment in Ajman depends on the type of business activity, office space, visa requirements, and administrative fees. The licensing fees for a professional sole establishment in the UAE typically start from around AED 10,000, though costs may vary based on activity type and additional services.
Entrepreneurs should budget for:
- Trade name registration
- DED license issuance
- Office rent or lease
- LSA agreement fees (for foreign owners)
- Visa and medical expenses (if applicable)
Consulting a local business setup expert such as Commitbiz can help estimate the total cost and ensure compliance with local guidelines.
Documents Required to Set Up a Sole Establishment in Ajman
To register a sole establishment in Ajman, you need to prepare and submit a few key documents to the relevant authorities. The exact list may vary depending on your business activity and nationality, but generally includes:
- Copy of the owner’s passport and valid UAE residence visa (if applicable)
- No Objection Certificate (NOC) from the current UAE residence visa sponsor (if applicable)
- Proof of education, professional qualification, or experience
- Emirates ID copy (for UAE or GCC nationals)
- Proposed trade name reservation certificate
- Tenancy contract or Ejari certificate showing the business location in Ajman
- Local Service Agent (LSA) agreement, if the owner is a foreign national
Procedure to Register a Sole Proprietorship in Ajman
Setting up a sole establishment in Ajman is straightforward if the process is followed systematically with the help of Commitbiz business setup experts.
Below is a step-by-step overview of the process to register a sole proprietorship in Ajman:
Select the Business Activity
Determine your business activity and ensure it qualifies as a professional service permitted for a sole establishment.
Choose a Trade Name
Reserve a unique business name that complies with naming guidelines (no religious or offensive terms) through Ajman DED or a relevant free zone authority.
Apply for Initial Approval
Our consultants will then submit an application with relevant documents, including your passport copy, visa page, NOC (if applicable), and proposed trade name approval.
Draft the Local Service Agent (LSA) Agreement
If you are a foreign national, our consultants will help you appoint an Emirati as your LSA and prepare a notarised agreement defining their service role.
Lease Office Space
Provide proof of a physical business address or office space for rent in UAE. Some professional activities may also be eligible for a shared or virtual office.
Submit Documents for Final License
Commitbiz will complete the licensing application with the authorities. You will then receive your business license to operate legally in the Emirate.
Post company registration, you can apply for a UAE residence visa, along with visas for dependents and employees, depending on quota availability.
Why Commitbiz?
A sole establishment in Ajman provides an excellent platform for individuals who wish to launch a professional business in the UAE while maintaining full ownership and operational control. With Ajman’s affordability, streamlined licensing, and growing business infrastructure, it stands out as one of the most entrepreneur-friendly Emirates.
Whether you’re a UAE national looking to start your own enterprise or a foreign professional seeking a cost-effective way to enter the UAE market, establishing a sole establishment in Ajman is a practical, flexible, and rewarding choice.
For smooth registration and hassle-free compliance, consider partnering with Commitbiz’s experienced business setup consultants who can guide you through every step - from licensing to auditing - ensuring your business starts right and grows successfully in Ajman. Contact us today for more!
How long does it take to set up a sole establishment in Ajman?
If all documents are in order, registration and licensing for a sole establishment in Ajman can usually be completed within a few working days.
Can I convert my sole establishment into another business type later?
Yes. Business owners can upgrade or convert their sole establishment into another structure, such as a Limited Liability Company (LLC), if they plan to expand or bring in partners.
Is a sole establishment taxed in Ajman?
Currently, most sole establishments in Ajman are not subject to personal income tax. However, they may be required to register for corporate tax if they cross the taxable income threshold set by the UAE’s Federal Tax Authority (FTA).
How long is a sole establishment license valid in Ajman?
The sole establishment license in Ajman is valid for one year and must be renewed annually to keep the business legally active.
Can I hire employees under my sole establishment?
Yes. A sole establishment can hire staff depending on the visa quota approved by the Ajman authorities and the Ministry of Human Resources and Emiratisation (MOHRE).