About a UAE Sole Establishment or Sole Proprietorship
A UAE business that is owned and operated by one individual with the trade licence that is issued in his or her own name is known as a ‘Sole Establishment’ – also often known as a ‘Sole Proprietorship’ – in the UAE.
You should consider operating as a Sole Establishment if your business is small and the capital investment is minimal. Unlike a limited liability company, the owner of a Sole Establishment is solely responsible for all the business liabilities and financial obligations of the entity.
Establishments that practice professional services and do not extend to any commercial business are exempt from the provisions of the UAE Commercial Companies Law (CCL), but are required to be licensed by the relevant Emirate’s Department of Economic Development (DED).
Unlike a Limited Liability Company (LLC), which in many cases still requires that at least 51% of shares must be in the ownership of a UAE/GCC national sponsor, a qualified foreign investor that sets up a Sole Establishment to practice a professional service is permitted 100% ownership in the company.
Establishments that are owned by foreign nationals are required to appoint a Local Service Agent, which must be a UAE national individual or a 100% UAE national-owned corporate entity. Sovereign is authorised to act as a Local Service Agent in Dubai.
Key steps to setting up a Sole Establishment
- Certified passport copy for the shareholder;
- Copy of the UAE residence visa, if applicable;
- No Objection Certificate (NOC) from current UAE residence visa sponsor, if applicable;
- Proof of education, professional qualification or experience, if required;
- Certified passport copy for the General Manager;
- 2 x Certified proofs of address for the General Manager;
- 1 x CV for the General Manager;
- 1 x Professional / bank reference letter for the General Manager.