A Sole Proprietorship Firm in Dubai is a business having a legal entity that is owned as well as operated by an individual. However, the individual should have a trade license in UAE issued in his or her name. The individual owner of such a firm is also known as the sole proprietor and is in absolute control of the firm’s operations and profits with unlimited liability. This means that the Sole Proprietor is entirely responsible for the firm’s debts or/and other financial obligations.
Who can be the Sole Proprietor in Dubai?
In Dubai, a Sole Proprietorship Firm can only be created by a UAE National or for that matter a national belonging to the Gulf Cooperation Council (GCC). However, a non-UAE national who intends to establish a Sole Proprietor Firm or Company will have to possess a residence permit along with a Dubai national or a Dubai Company as the local sponsor. It is mandatory for foreign nationals owning establishments, to appoint a National Service Agent (NSA) that will help to obtain visas, licenses etc. However, such NSAs will have no direct participation in the business.
As said earlier, the Sole Proprietor needs to have the appropriate license for carrying out a professional or commercial activity in Dubai. Here it is also important to know that such establishments that are into providing professional services only; without any commercial business; are not under the ambit of the Commercial Companies Law (CCL). But these Professional establishments/Individuals are required to have a license from the Department of Economic Development (DED).
A foreign investor willing to set up a Sole Proprietorship for practicing professional service is allowed 100% ownership in the company. Whereas, for the UAE Limited Liability Company (LLC) it is required that a minimum of 51% of shares should be owned by a UAE/GCC national as a sponsor.
Steps for Sole Proprietorship Registration
- Contact a local consultant who will recommend the appropriate legal structure for your company based on the business operations that you plan for in the UAE.
- Choose a National Service Agent (NSA), either a UAE national or for that matter a Company entirely owned by a UAE national/s. Many LLCs are 100% UAE owned and can be appointed as NSA. Proper due diligence should be done while appointing an NSA.
- The following documentation will be required (list not exhaustive) for registration:
- Copy of passport of the shareholder-certified
- Proof of professional qualification. education or experience
- UAE residence visa Copy, where applicable
- Current UAE residence visa sponsor’s No Objection Certificate (NOC), in case applicable;
- Passport Copy of the General Manager-Certified
- Certified address proofs of the General Manager, in duplicate
- CV of the General Manager;
- Reference letter for the General Manager from the bank.
- Arabic translation of all documents by an official translator to be submitted to the authorities.
- All documents must be notarized and attested in the applicant’s home country and also at the concerned UAE Consulate. This process is time taking and thus should be initiated as soon as possible.
- A business bank account needs to be opened with any UAE bank.
Expatriates are permitted to form Sole Establishments for practicing professional services only, such services may be in the domain of medical, IT consultancies, management consultancies, engineering or similar services.
Establishing a Sole Proprietorship in Dubai is surely a profitable proposition due to the Sovereign’s commitment to support and incentivize businesses there. For the last couple of years, there has been immense infrastructure development in the UAE, which has created an atmosphere conducive for economic growth. Apart from offering abundant business opportunities to aspiring entrepreneurs, UAE has a robust process for registering a Sole Proprietorship firm.