Why choose Sole Establishment or Sole proprietorship?

A sole establishment in Dubai is a venture that is owned and operated by one person with a license to do business allotted to him or her name. The one person who is the sole proprietor of such venture will get the 100% profit earned in the business but will also have 100% liability. If your business is small and has minimum capital venture investment, the most suitable business structure would be A Sole establishment in Dubai. The UAE Commercial Companies Law (CCL) does not apply to establishments that only provide professional services and do not engage in any commercial activity; however, they must get a license from the relevant Emirate's Department of Economic Development (DED).

About Sole Establishment in Dubai

In contrast to a Limited Liability Company (LLC), which frequently maintains the requirement that a UAE or GCC national sponsor own at least 51% of the shares, a qualified foreign investor who establishes a Sole Establishment in Dubai in order to provide professional services is allowed to own 100% of the business. Foreign-owned establishments must designate a Local Service Agent, who must be either an individual or a corporate body owned 100 per cent by UAE nationals. Sovereign is permitted to function as a Local service agent for the Sole establishment in Dubai. Our team of experts here at Enterslice is here to guide you every step of the way in making your sole establishment in Dubai dream come true.

Key steps to setting up a Sole establishment in Dubai

Setting up a Sole establishment in Dubai is a two-fold process. Here is a guide by our specialist for you

Business Setup

Step 1

Choosing a trade name. Your business name should be as unique as your business itself. It should have a reflection of your vision and mission.

Step 2

Selecting a business structure, which in our case is the sole establishment.

Step 3

Receiving the primary approvals from the Department of Economic Development (DED). Their permission is necessary for the registration of your sole establishment in Dubai.

Step 4

Further, after getting the initial approval from the DED, you must get the other necessary approvals of the respective departments as your Sole establishment in Dubai.

Step 5

After getting the approval from the DED, you are a foreign entrepreneur; you have to sign a contract with a local service agent who is a resident of Dubai.

Step 6

Find your business a space to operate from. Once you have established the physical presence of your business, sign a tenancy contract.

Step 7

You will be sent a payment voucher to use for your payment after everything has been cleared. After that, you can pick up your license for your only location. Having guidance from someone more familiar with the system is beneficial, even when obtaining a sole proprietorship only requires a few simple actions. You have access to a multitude of commercial, industry, and legal knowledge with the help of the Enterslice experts.

Step 8

Mandatory Documents for the registration of Sole proprietorship in Dubai

The list of all the paperwork needed to register a sole proprietorship in Dubai is provided below and must be presented to the Commercial Registry

application
a sole trader's trade name
Application for license
Information about the local sponsor (local agent), if the sole proprietor is a non-resident of the United States
a duplicate of the employer's passport
evidence of the registered office
a residence permit
The sponsor's letter of no objection.

Qualifications to Form a Sole Proprietorship in Dubai

If you meet the requirements for proprietors of sole establishments, which include the following, opening a sole establishment in Dubai is reasonably simple and quick.

Only sole proprietorships offering professional services, such as medical consultancies, management consultancies, legal and engineering consultancies, IT services, and similar services, can be founded by foreign nationals or expats.
In order to receive the necessary permits, the owner of a sole establishment in Dubai that offers specific services must have particular educational requirements and have prior expertise in the field.
A National Service agent (NSA), or local UAE national, is required for foreign-owned sole proprietorships. This person or organization does all liaison tasks, such as obtaining licenses and permissions, but is not required to be actively involved in running the business.
For taxation purposes, registering for VAT is an additional need. The voluntary registration for VAT is available to individuals whose annual taxable proceeds are above AED 187,500.

Pros and Cons of a Sole Establishment in Dubai

Pros

Freedom in decision making:Because the operation and ownership of any sole establishment in Dubai are with the same person, the freedom of decision-making makes the business venture much easier. Whether it's operational decisions or long-term business strategies, they will only be yours without intervention from any other people or entities.

Autonomy in Operating:After establishing a sole proprietorship in Dubai, you can lawfully conduct business from any of the seven emirates, including all of the country's recognized free zones.

Freedom to Select Office Location:You are free to choose where to set up your office space in a sole establishment in Dubai based on factors like comfort, price, and convenience. This could entail buying a property entirely or renting one. With this flexibility, you may save costs and select the best course of action.

Paid up Capital Requirements:The government's permanent waiver of the paid-up capital requirements for establishing a sole proprietorship in Dubai is another noteworthy benefit. This releases you from all future obligations and frees up the remaining funds for use in improving and growing your business.

Privacy:Sole establishment in Dubai offers the maximum privacy of the business.

Easier to Manage:It is simpler to modify the legal Business structure or wind up the venture if circumstances change.

Cons

Since private and company assets are not legally distinguished, a person operating a sole establishment is subject to unlimited liability for obligations.
The company's ability to raise cash is constrained
The proprietor bears complete accountability for daily corporate decision-making.
A single firm can only appoint a certain number of managers.
It can be challenging to retain top talent.
The company has a finite lifespan.
A Sole Establishment typically takes eight to ten weeks to start up. However, a Free Zone corporation requires less time.

License Cost for Sole Establishment in Dubai

This corporate structure, i.e., Sole establishment in Dubai, is authorized to legally offer expert services in all of the United Arab Emirates, including the Free Zones. AED 18,500 approx. This is the starting point for the cost of establishing a sole proprietorship in Dubai, though this can vary according to the type and nature of your business and the location you choose to have office space in.

Services we offer at Enterslice

We are here to help you in registration for sole establishment in Dubai by offering the following services

Company Formation
Office Spaces and Co-working Spaces
Audit and Accounting
Tax Advisory
VAT Registering and VAT Return Filing
Trademark Registration
Corporate Services
Business Bank Account Opening

Frequently Asked Questions

Choose a trading name and decide on the business structure; in this case, it's a sole establishment in Dubai. Get initial approval from DED, get additional approvals, pay the fee, and file all the required documents. Register your sole establishment in Dubai.

A sole establishment in Dubai is a business venture that is owned and operated by an individual.

Yes, for the most part. However, there can be restrictions based on the kind of business you want to launch, your nationality, and the nation in which you currently reside for tax purposes.

Consulting, marketing, Legal advisory, engineering firms, etc.

Although hiring an office is unnecessary, a lone proprietor needs to have a co-working area or flexi-desk. This is also helpful when a solo proprietor applies for a bank account.

Yes, owners of a sole establishment in Dubai are allowed to open a corporate bank account.

Your trade license application must include a copy of your residency visa. The UAE Ministry of Foreign Affairs or the appropriate consulate or embassy in your home country are the places to apply for the approval of your first work permit. Supporting documentation, such as your passport, a business plan, and evidence of your finances, will be required.

The number of branches that a sole establishment may open is restricted. Every branch is permitted to carry out any or all of the operations specified in the primary business license.

In Dubai, LLCs and sole proprietorships are the two most common forms of business entities. One individual can own a sole establishment, while multiple individuals or corporate entities are required to possess an LLC. This is the most significant distinction between sole establishments and LLCs. You cannot own an LLC as an individual.

Yes, both locals and foreigners can be sole traders in Dubai.

Each emirate's government will ultimately have the last say over whether or not to restrict foreign ownership based on the type of enterprise. The new law will allow investors to fully acquire 1061 of the 2300 economic activity listed by Dubai's Department of Economic Development (DED) alone.

Sole Establishment Registration in Dubai

Why choose Sole Establishment or Sole proprietorship?

About Sole Establishment in Dubai