Sole Proprietorship in Dubai

The sole proprietor is in complete control of the company’s operations and profits and bears unlimited liability; that is, he/she is fully liable for the company’s debts or obligations. A sole proprietorship in Dubai can be formed only by a UAE national or a national of the Gulf Cooperation Council (GCC). 

For a non-UAE national, establishing a sole proprietor company would require him/her to have a residence permit and a local sponsor. They can be a Dubai national or company. 

If the sole proprietor is to carry out a professional or commercial activity, he/she must obtain the appropriate license.

 Advantages of a Sole Proprietorship, Dubai

The benefits of a sole proprietor business setup services in Dubai are mentioned below:

• Foreign professionals can retain 100% foreign ownership in the business;
• The company can legally practice professional services anywhere in the UAE, including Free Zones
• Single owner and no shareholder
• 100% retention of profit
• Low-cost business
• Quick registration
• No restrictions on the location where the company can rent/buy office space
• The government has wholly waived any paid-up capital requirements.

 Conditions to Set up a Sole Establishment Company, Dubai

The following conditions should be met to establish a sole establishment company in Dubai:

• The sole proprietor engaged in consultancy activities must have obtained an education qualification for the same activity that he/she has selected.
• There is a limitation to the number of managers appointed on a professional license.
• The capital of the business is not a constraint for a sole proprietorship.
• The business name must be related to the commercial activity of the company.
• A sole proprietorship can have more than one branch. Each may undertake one or all the activities included in the main business license.
• The owner/s can also change its legal form according to DED procedures.
• A single establishment may need the owner or a manager to appear for exams with an American University in Dubai in support of practicing certain economic activities. These exams are required at the time of setup and renewal of the license.

 How to Start a Sole Establishment in Dubai?

The business setup process for all the legal forms is similar to document changes. The sole proprietorship registration steps include:

1.  Choose a Business Activity

To properly specify your business activities on your license, we'll first assist you in defining them correctly. Any activity selected must be on the DED's (Department of Economic Development) official list.

2. Decide on a Trading Name

Select an appropriate trade name adhering to government guidelines.

3. Get an Initial Approval from the DED

Initial approval from the Department of Economic Development is essential before proceeding further.

4. Essential Documents for a Sole Establishment, Dubai

Submit the following documents to the registrar:

• Business application form
• Licensing application form
• Name, residence permit, and passport copy of the sole proprietor
• Details of the local sponsor, in case the sole proprietor is a foreign citizen
• No-objection letter by the sponsor, if applicable
• Proof of registered address of the company
• Details of the local sponsor, in case the sole proprietor is a foreign citizen
• No-objection letter by the sponsor, if applicable
• Proof of registered address of the company. 

5. Pay Fees and Obtain the License

After finishing all the processes mentioned above, you will get a payment voucher. Pay the fee and obtain the trade license for your sole business.

6. Apply for Visas if Required

For employment in the UAE, you must have a residency visa. However, if a current employer already sponsors you, this may not be necessary, so you will need a NOC from your company.

7. Get an Office Space

A mainland corporation must have an office to be formed. However, this may be a Flexi-desk rather than having a permanent office.

8. Open a Business Bank Account

To run a sole establishment in the Emirate, you must also open a corporate bank account in Dubai to carry out your transactions.

 All the documents must be notarized and attested by the relevant UAE consulate. All documents must also be translated into Arabic by an official translator before they can be presented to the UAE’s authorities.

Many professionals in the UAE, like engineers, doctors, management consultants, and IT graduates, prefer setting up a sole proprietorship in Dubai.

Business setup in Dubai is a lucrative choice, and it is pivotal that a businessperson selects the most appropriate company structure to conduct one’s operations. Commitbiz supports companies globally to set up their business in Dubai by handling all the formalities and legalities of sole trader company registration from start to finish. 

Our team of experts has years of expertise in company formation in Dubai, which can help your business gain a robust foothold in this growing economy. Contact us for business setup services in Dubai, and we’d gladly assist you.