SOLE ESTABLISHMENT

A sole proprietary is a great option for the business oriented. A Sole Establishment Company in the UAE is formed under the name of an Individual known as Sole Proprietor. The sole proprietor exercises complete control over the company’s operations, profits, and liabilities.

The Sole Establishment may carry out professional or commercial activities in the UAE provided one has all the licenses in place from the Department of Economic Development.

As per UAE government law, a Sole Establishment can be formed only by a UAE national or a national of Gulf Cooperation Council (GCC). An expat is allowed to form a Sole Establishment provided there is a local sponsor; who is a UAE national or a company. (The commercial activities carried by a SOLE ESTABLISHMENT are those which are described in the Article 5 – 6 of the UAE Federal Law No. 18 of 1993 on Commercial Transactions. Some of these activities are trading, import-export, real estate development, manufacturing, etc.)

Expatriates (foreign investor) may well form Sole Proprietorship but only for conducting professional activities such as consultancy business, accounting and bookkeeping, brokerage services, medical services, engineering consultancies, management consultancies, legal consultancies, IT consultancies and similar services, cleaning services, etc.

The Sole Proprietorship, owned by a foreigner, should appoint a Local Service Agent (a UAE National or a Company) in accordance with UAE laws. This agent acts a as link between the company and the government entities for handling permits, visas, etc. There is an agency agreement to maintain the disciplines of the business between the principal companies and the agents.

The good news is that forming a SOLE ESTABLISMENT usually involves low start-up cost and allows business establishment with just one shareholder. The foreign investor is the 100 % owner of the company, can easily open a bank account, enjoys zero limitation on number of visas, and most of all the investor can change the local service agent anytime.

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