Sole Proprietorship in Dubai

A Sole Proprietorship is an entity owned by an individual who assumes all the financial responsibilities of the entity including all its financial liabilities. Dubai currently has the best climate for business setup in the entire UAE. The country has the most modern legislation covering company formation as it allows both large and small investors to set up a business according to their budget. If large enterprises have options to set up public or private companies, small enterprises have an option of sole proprietorship. A sole proprietorship in Dubai is subject to different terms and conditions as stipulated by the Commercial Code and the Companies Act in Dubai.

Benefits of a Sole Proprietorship in Dubai

Here are a few advantages a sole trader can have after starting this type of business entity.

Foreign professionals can easily retain complete foreign ownership of the business
There are no restrictions on choice of locations where a company can buy or rent office premises
A company can carry out legal practices of professional services in any part of the UAE including the free zones
The government of the UAE has permanently waived all the requirements of paid up capital in relation with the sole proprietorship

Features of a Sole Proprietorship in Dubai

A sole proprietor can appoint one manager as per the Department of Economic Development (DED) business regulations
The trade name must be related to the commercial activity of the firm
A sole trader can have more than one branch. Each may undertake one or all of the activities included in the main business license
A sole proprietorship cannot have a branch outside the Emirates
If the trader is a National of a country other than the UAE or GCC, they require a Local Service Agent (LSA)
A corporate body cannot own a sole proprietorship

Procedure to Start a Sole Proprietorship in Dubai

To register a sole proprietorship in Dubai, one needs to get the approval from the DED Dubai like any other business entity. It is the main authority where every business in the UAE is registered. Since there are hardly any Articles of Association or Memorandum needed to be prepared for this form of company, the procedure is much less expensive compared to other types of company formation. Here are the steps one must follow to register their business in Dubai.

Select a trade name for your business. It must be unique and in connection with your business.
Select the legal structure, which in this case is a Sole Proprietorship
Get the initial approval from the Department of Economic Development in Dubai. The approval is a primary permission to register your business in Dubai
Obtain approvals from other departments
Register your business by submitting an application form along with the documents
Once you get the business registered, you can apply for a license

Documents Required to Register a Business in Dubai

Here is a list of all the documents needed to be filed with Dubai Trade Register for setting up a sole establishment UAE company.

The application form
Business name of sole trader
Licensing application form
Information about local agent while dealing with foreign citizens
A copy of the passport of the business owner
Proof of registered address
The residence permit
A no-objection letter obtained from the sponsor

There can also be additional documents needed based on activities carried out by a sole proprietorship. Note that, all the documents must be notarized and attested with the relevant UAE consulate. The notarization process should be commenced as early as possible because it can take a significant time. All documents must also be translated into Arabic by an official translator before they can be presented to the authorities in the UAE.

A Dubai sole trader can carry out commercial or professional activities across the Emirates; therefore the license to obtain must reflect these activities. Even if there is no minimum amount to open a sole trader in Dubai, an individual must calculate the amount needed to carry out his or her activities. Another requirement to establish this type of business form is to have registered address in Dubai.

Business Setup Worldwide is a platform to help you start any kind of business in the UAE. Our advisors are well versed with the legalities of the business and can help you in setting up a business in Dubai smoothly and efficiently. Contact us today to know more.