Sole Proprietorship Company is a business owned by one person and the trade license is issued in their name alone. In other words it means 100% ownership of the Business. Sole Proprietorship Company in Dubai has its own benefits. Having sole proprietorship company in Dubai will have the following benefits for you:
- Low start up cost.
- No other shareholders.
- Complete control of business operations.
- Sole responsibility for business liabilities and financial obligations.
- Quick business registration.
- No business capital requirement.
In UAE, anyone can form Sole Proprietorships firms. But the conditions differ as per nationality of the owner.
For example the UAE and the GCC nationals can register any type of sole businesses, be it for industrial, commercial, consultancy, tourism or professional activity.
But on the other hand, the foreign national can only apply for professional license for sole proprietorship however, They will need to work with a local service agent who can be a UAE national or a UAE national owner company.
Additional approvals have to be obtained for special consultancy activities.
Advantages for Sole Proprietorship:
- The company can legally practice professional services anywhere in the UAE, including free zone.
- There is no restriction on the location where the company can rent or buy an office space.
- There is no initial paid-up capital requirement.
Conditions to Set-Up:
- If you wish to carry out consultancy services, you need to clear an exam called Management Skills Placement Test also called AUD exam. It is important for special consultancy. (Removed temporarily because of COVID-19)
- After that the business name should include the activity of the company.
- Similarly, the owner can change its legal form according to the DED procedures.
- It can have more than one branches. But there is a limitation to number of managers in the Professional license.
Documents that are required for the Trade License application form:
- Completed DED application form.
- Passport copy of the sole proprietor (UAE Residence Visa or Visit Visa copy).
- The trade name for business.
- You have to clearly state the business activity in the application.
- Proof of the registered address of the company i.e., Ejari (Tenancy Contract).
- The details of local service agent in case of foreign citizen.
The Process to Start a Sole Proprietorship:
- Firstly, you have to decide the Trade Name.
- Next fill the Dubai Economy application form and get the Initial Approval and submit it to the registrar along with the documents.
- You will have to get an external approval (if required)
- Rent an office space to start operations of your company.
- Lastly, Submit all the documents in Dubai Economy to get the final payment voucher to issue the license.
Sole proprietorship company in Dubai is a recommended mode of ownership of your business, especially if you want to take full control of you company financially and start your business setup in Dubai. And this is also a preferred type of business for foreign nationals.