How to Start a Sole Establishment in the UAE
Being one of the most business-friendly countries in the world, the UAE offers a variety of business setup options for emerging entrepreneurs, including Sole Establishment. Whether you are deciding to start your business on Mainland, you need to choose a specific corporate legal structure that fits your requirement.
With numerous choices available, you may be wondering what type of business structure is right for you. One option to consider is a sole proprietorship. In this type of business, the owner is the sole proprietor meaning that he or she is the only one who has a say in decision-making and who gets to keep the profits as there is only one shareholder allowed in this structure. Additionally, the owner is solely responsible for controlling the business and enduring all the liabilities or debts incurred.
Explore the essentials and advantages of Sole Proprietorship. Understand their benefits, procedures, processes, and other related aspects that will make your company establishment easier in the UAE.
Mainland Legal Structure
What is a Sole Establishment?
- A Sole Establishment is a business owned by one individual with a business license issued under his or her name.
- The legal entity is owned and operated by a single individual who takes all the responsibilities including the financial liabilities.
- The individual possesses 100% of the business, controls all the activities, and keeps 100% of the profits.
- A company or corporate body cannot own the business therefore the individual is personally liable for the business activities.
Ownership
Activities
- Foreign, UAE, and GCC nationals can form a sole proprietorship with certain requirements and applied conditions.
- UAE or GCC nationals can choose any type of industrial, commercial, tourism, or professional activity.
- Only UAE and GCC nationals can start a specific consultancy with a multitude of activities.
- As a foreign national, you can only apply for a professional license and all professional activities are eligible under sole establishment.
- It is mandatory for foreign nationals who acquire a professional license to have a Local Service Agent (LSA) for sole establishment registration.
- An LSA acts as a government liaison or officer with an annual fee applied for their representation.
- UAE and GCC nationals have more options and can form any type of establishment in several business activities such as:
- Trading
- Import-Export
- Real-Estate
- Industrial
- Commercial
- Professional
- Foreign nationals who reside in the UAE can form sole proprietorships and offer professional services such as:
- Consultancy
- IT
- Legal
- Engineering
- Marketing (or other business activities that are service-related or professional in nature)
- The law restricts certain business activities or fields that a foreigner can engage in as a sole proprietor
- Import-export
- Trading
- Real-Estate
Advantages
- Sole Ownership
- 100% ownership of the business
- Flexible location
- Legally practice professional services anywhere in the UAE, including Free Zones
- No paid-up capital requirements
- The government has waived paid-up capital requirements which allow sole owners for 100% profit retention
- Affordable setup
- Acquire large premises with low startup costs and faster business registration
- Corporate Bank Account
- Sponsored dependents visa
- If you are eligible to apply, get your own visa including your dependent’s visa
Requirements
- Clear full-page colored scanned copy of current passport – 1st page and last or signature page (if applicable) Note: passport must be valid for at least 6 months at the time of application submission
- Clear passport size photo
- Copy of recent visa (Tourist, Residence, Cancelation or Entry Stamped)
- Copy of old Emirates ID (if any)
- Non-Objection Letter issued by the sponsor or authority if the appointed Manager holds
employment visa. - Copy of trade license of the shareholder or appointed manager holds an investor or partner visa.
- Completed and signed DED License Application Form
Process
- Initial approval
- The approval is done by DET which is the licensing authority in the UAE. Some activities are subject to external approval.
- Trade Name Approval
- Three trade names must be given of which at least one will be approved.
- Local Service Agent Agreement
- The owner and LSA will physically or digitally sign the agreement.
- Office Space
- It is mandatory to have a physical office and submit a tenancy contract with an Ejari.
- Additional Approvals
- Specific approvals from government and non-government agencies may be required by the DET for the registration process
- Payment
- A payment voucher will be given after the completion of all the steps which will enable you to collect the trade license for your sole establishment
How can EZONE help you?
If you are looking for a faster and more flexible way to start your business, get in touch with EZONE’s market-leading experts who can provide you with customized packages that suit all your needs. Tap into the wealth of legal, and industry knowledge and book your free consultation today. Call us at 800-EZONEUAE (39663823) or email us at hello@e.zone and get the answers to all your corporate queries.
