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Establish a Sole Proprietorship in Dubai

Establish a Sole Proprietorship in Dubai

The UAE has one of the most modern legislation covering company formation and it allows for both large and small investors to set up business according to their budgets. If large enterprises can set up private and public companies, individuals are allowed to register sole proprietorships in Dubai. These are usually called sole establishments in Dubai can be set up by both local and foreign citizens in the Emirate. This type of business form is also available for professionals and in this case, it can be registered only if the individual has a professional license. Also, a local agent must be appointed when establishing a sole proprietorship in Dubai.

Our company incorporation agents in Dubai can assist with the registration process of sole traders.

Legal requirements to set up a sole proprietorship in Dubai

Foreign entrepreneurs who want to open sole establishments in Dubai will need a local sponsor and must also have a residence permit. The sponsor can be a Dubai company or national. A Dubai sole trader can carry out a commercial or professional activity, therefore the license to obtained 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 a registered address in Dubai.

Documents required to open a sole establishment in Dubai

The sole trader must register with the Dubai Economic Department, just like any other type of company. However, the procedure is less expensive given that no memorandum or articles of association need to be prepared. The following documents must be filed with the Trade Register when creating a sole proprietorship in Dubai:

  • the application form;
  • the licensing application form;
  • the business name of the sole trader;
  • a copy after the business owner’s passport;
  • information about the local agent, in the case of foreign citizens;
  • the residence permit;
  • proof of the registered address;
  • a no-objection letter of the sponsor.

Additional documents could be requested based on the activity to be undertaken by the sole proprietorship.

The sole trader in Dubai is suited for small businesses

Dubai nationals or those from countries which are members of the Gulf Cooperation Council (GCC) can open sole proprietorships in Dubai by obtaining a license from the Department of Economic Development. Sole proprietorships engaged in industrial or commercial activities can be owned only by UAE nationals or GCC nationals.Likewise, sole traders in Dubai can be individuals of any nationality but need to make proof of their professional skills. Foreign investors in Dubai can appoint a commercial agent to act on their behalf in business activities performed by a sole trader. This Local Service Agent can help you if you want to act as a medical professional or engineer in Dubai. For more information about the types of companies which can be foreign-owned, we suggest you address to our attorneys in Dubai.

The benefits of sole traders in Dubai

Sole proprietorships in Dubai address to investors willing to have 100% ownership and full responsibilities for losses and profits. It is good to know that the activities of sole traders can also be established in Dubai’s free trade zones. Entrepreneurs can operate in the medical or IT fields or can offer financial management and consultancy services in Dubai.

For assistance in setting up a sole establishment in the Emirate or in one of its free zones, please contact our company registration consultants in Dubai.