Sole Proprietorship Establishment

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Sole Proprietorship Establishment

A Sole Proprietorship in Dubai is a legal entity kept by individuals and functioned as a sole proprietor. The sole proprietor has complete control on company’s operations and profits and with unlimited liability acceptance. So the sole proprietor is fully responsible for the company’s debts and commitments.

A Sole Proprietorship Company in Dubai is formed only if you are a UAE national of a national of the Gulf Cooperation Council (GCC). If you are non-UAE national, you need to have a residence permit and a local sponsor for establishing a sole Proprietorship company. The sole proprietor must need to obtain the appropriate license to perform a professional or commercial activity.

UAE nationals or nationals from Gulf Cooperation Countries (GCC) can set up a sole proprietorship concern in the UAE with various restrictions and conditions.

  • In case the investor or ‘proprietor’ is a UAE national, having Sole proprietor license is must to conduct the particular activity. To get a license, you can fill up the necessary application with the Department of Economic Development (DED) and attach the necessary documents.
  • If the investor or proprietor is the citizen of a GCC country, he/she can conduct business in the areas of industry, agriculture, livestock, fisheries and contracting, as long as he holds a license to do the same in his home country.
  • By legal resolution, the above list was expanded to include retail or wholesale trade that can be conducted by a natural or juridical person.
  • In case of a GCC citizen being a juridical person (and not a natural) wishing to conduct business in the area of retail or wholesome trade, the investor must be in the form of a company where 51% of the shares are held by one or more UAE nationals.
  • In any of the above cases, the investor/proprietor cannot open branches in the UAE.
Advantages of a Sole Proprietorship Firm in Dubai
  • Foreign professionals can hold 100% ownership for sole trade company
  • The company can legally serve professional services anywhere in the UAE as well as in the Free Zones also
  • The company can buy office or rent office space anywhere without restrictions
  • The Government had solely waived for any paid-up capital requirement.
Drawbacks of a Sole Proprietorship in Dubai
  • The owner is solely responsible for any business debts and other financial commitments.
  • A Free Zone company establishment takes a longer time of 8 to 10 weeks.
  • The Department of Economic Department does not recognise virtual offices, so an office space is required in order to unite the company.
Conditions to Set up a Sole Proprietorship in Dubai
  • The sole proprietor is engaged in professional services must have obtained with same educational qualification that he/she has selected to serve.
  • There is some limitation to the number of managers that can be appointed on a professional license.
  • For a sole proprietorship, the capital of the business is abandoned.
  • The trade name must be related to the commercial activity of the company.
  • The main business license for a sole proprietorship can hold more than one branch that undertake one or all the activities.
  • The business owner can change its legal form according to DED procedures.
  • The owner or a manager needs to appear for exams with an American University in Dubai, in support of keen certain economic activities. These exams are essential at the time of business setup and at the time of renewal of the license.
Documents are required to establish a Sole Proprietorship in Dubai
  • Business & Licensing application form
  • Trade name, passport copy and residence permit of the sole proprietor
  • Proof of registered company address
  • No Objection Certificate (NOC) by the sponsor

For assistance in setting up a sole establishment in the UAE or in one of its free zones, please contact Quickbiz Business Setup Services for more details.

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