It is formed from a federation of seven emirates, consisting of Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain. The UAE has developed from a juxtaposition of Bedouin tribes to one of the world's most wealthy states in only about 50 years.
You could choose to set up in one of the many free zones – and take advantage of 0% corporate and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption.
Or you could opt for setting up in the mainland with its myriad benefits – which include being able to trade directly with the local market in the UAE. It’s true, establishing a mainland business may seem a little more complex at first glance than starting up in a free zone but it doesn’t have to be that way. With the right guidance, setting up on the mainland is very straightforward.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
What is a Sole Establishment in UAE
Sole establishment, also known as sole proprietorship, can be a good option for entrepreneurs wishing to go it alone in the UAE, as startup costs are generally low and you can establish your business with just one shareholder. A qualified foreign investor that sets up an establishment or sole proprietorship to practice a professional service is permitted 100% ownership in the company.
Establishments that practice professional services and do not extend to any commercial business are exempt from the Commercial Companies Law (CCL) but are required to be licensed by the Department of Economic Development (DED).
Sole Proprietorship for carrying out commercial activities can be formed only by UAE nationals or GCC nationals (subject to certain conditions). Expatriates can form Sole Proprietorships only for providing professional and consultancy services (such as medical services, engineering consultancies, management consultancies, legal consultancies, IT consultancies).
Establishments that are owned by foreign nationals are required to appoint a National Service Agent (NSA) to assist in obtaining licences, visas etc. A National Service Agent is a UAE national who assists a foreigner in the licensing requirements and other government-related matters in exchange for an annual fee. NSAs have no direct involvement in the business.
The business setup process for all the legal forms is similar to change in the documents only. The sole proprietorship registration steps include:
- Selecting a trade name for your business; It must be unique and in connection with your business
- Selecting the legal structure, which in this case is a Sole Proprietorship
- Getting the initial approval from the Department of Economic Development; The approval is a primary permission to register your business
- Obtaining approvals from other departments
- Registering your business by submitting an application form along with the documents
- Once you get the business registered, you can apply for a license
Here is a list of all the documents needed to be filed with the 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.