Thousands of new businesses launch in Dubai every year. Entrepreneurs from all over the world flock to the emirate because of its welcoming environment, strategic location, and straightforward company formation processes.
If you’re arriving here looking to start a business, several options are available. As well as the choice to set up in the mainland or a free zone, you also need to decide on a legal entity. There are many available, from public companies to partnerships. Alternatively, you can choose to start a business on your own – a process known in Dubai as sole proprietorship.
Ready to make your entrepreneurial mark in this region? This article provides the key insights you need to get started.
Sole Proprietorship in Dubai: What is it?
In simple terms, a sole proprietorship in Dubai is a type of business structure wholly owned and operated by one individual. It is popular among consultants and freelancers who wish to trade as a business despite working solo. Solo proprietorships can be established under a company name or an individual name.
Unlike many other company structures, sole proprietors do not have limited liability from risks associated with the company. In other words, the business owner remains liable for all company debts and obligations.
Despite this, sole proprietorship remains popular in Dubai largely due to its fast and straightforward incorporation process.
Who can form a sole proprietorship in Dubai?
Sole proprietorship in Dubai is available to numerous individuals and business types. Foreign citizens, as well as UAE and GCC nationals, are free to set up and trade with a sole proprietor model. However, foreign citizens may require the services of a local sponsor or agent to assist with the licensing process.
Sole proprietorships are permitted for many types of professional services and commercial activities. This includes consultants and freelancers in the medical, legal, engineering and technological fields.
How to form a sole proprietorship in Dubai: step-by-step
When forming a sole proprietorship in Dubai with the team at Creative Zone, you can be up and running in just five steps.
Step 1: Choosing your company name
Choosing a company name is one of the most important early steps when starting any business in Dubai. When making this decision, you will need to comply with a few naming conventions.
In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e., Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.
Step 2: Gather documentation
Next, the expert team at Creative Zone will help you gather all the documents required for your license application. This usually includes your business plan, a completed application form and copies of your passport.
Step 3: Making your trade license application
You are now ready to apply for your license to trade in Dubai. The process here will differ slightly depending on whether you opt to set up in a free zone or in the mainland.
When setting up in the mainland, applications are made directly to Dubai’s Department of Economic Development (DED) or equivalent. When setting up in a free zone, applications are managed by the governing authority. In either case, we’ll manage your application on your behalf, liaising with all relevant stakeholders along the way.
Step 4: Making your visa application
You must also apply for a visa if you intend to live and work in the UAE. This is a multi-step process involving a blood test, x-ray and biometric scanning. First, you will need to apply for an entry permit, which must be activated. After this stage, you can submit your passport to immigration in several ways to receive your visa stamp.
As the holder of a UAE trade license, you can sponsor others for their visas, too. This could be a spouse, parent or child, or a domestic worker such as a housekeeper.
Step 5: Open a corporate bank account
You will need a corporate bank account to send and receive payments in the UAE. Opening such an account is not always a straightforward process for non-GCC citizens. To ease the process, the team at Creative Zone will take the time to understand your precise requirements before advising on the best financial institution to meet your needs.
Advantages of setting up a sole proprietorship in Dubai
Whatever your industry, there are numerous advantages to setting up a sole proprietorship in Dubai.
Control
As a sole proprietor, you have full control over your business and all decision-making. This allows you to steer your enterprise as you wish with no outside influence.
Easy management
With the right support, setting up a sole proprietorship in Dubai is quick and easy. This type of business also requires minimal ongoing management and administration compared with many other legal structures.
Tax benefits
As the owner of a sole proprietorship in Dubai, you are free to benefit from the UAE’s favourable tax environment. This means 0% tax on personal income and a low, flat corporate tax rate of just 9% on taxable income exceeding AED 375,000.
Minimal investment
Aside from administrative and licensing fees, there are very few costs involved when starting a sole proprietorship in Dubai. There is no need for paid-up share capital when starting this type of business.
Strategic location
Dubai benefits from a strategic global location in the heart of the Middle East. This makes it easy to trade with large and growing markets across Asia, Africa and Europe.
About Creative Zone
Every business wishing to trade in the UAE must be correctly licensed. And while the company formation process is designed with simplicity in mind, it can be daunting if you are new to working in the country.
That’s why selecting the right partner is critical when setting up a sole proprietorship in Dubai. As the Middle East’s most trusted business setup advisor, Creative Zone has been empowering entrepreneurs and SMEs with comprehensive support since 2010. With a strong reputation for assisting businesses locally and globally, we offer a complete range of solutions for all your business setup needs.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in the UAE, Creative Zone is your ideal starting point.
Contact us today to kickstart your business in Dubai.
