Sole Proprietorship Company Formation

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Company Formation in

Sole proprietorship company formation is an exciting opportunity as it’s a company owned and run by an individual and the business license too is issued in their name. It’s a common company set up for individuals involved in professional services. A distinctive feature of the sole proprietorship setup is that it is prohibited from involving any shareholder or partner, as well as a company or corporate body.

Although there is no shareholder involved in this case, depending on your business activity, you may be required to hire a local service agent to assist you in going back and forth to obtain government approvals, licenses, visas, and more. As is the case with LSAs generally, they do not hold any power over decisions, nor do they have any shares within your business. You retain 100% ownership, while they are given an annual fee in exchange for the services they provide.

While a sole proprietorship company formation allows for a more affordable setup cost, the unlimited liability aspect of it can tend to be problematic in the long run. A sole establishment awards complete financial responsibility to the individual in charge, this includes the profits as well as the losses and debts. In this situation, if the company were to go through a tough financial situation, the individual may have to use all they’ve invested into the business as well as their personal assets to pay off those involved.

At Business Link, we understand the technicalities that go into setting up a sole establishment, as well as the risks associated with this. Our aim is to simplify these processes for you, guide you through alternatives, and provide the best strategies that are unique to your business needs. Let’s work together towards greatness!

Benefits of a setting up a sole proprietorship

Setting up a sole proprietorship comes with significant advantages for the individual involved, these are:

100% Ownership

Owners of sole proprietorships enjoy having complete ownership of their businesses, regardless of whether these are local owners or foreign owners.

Ease in trading

A massive benefit for sole proprietorships and other companies set up under the mainland license is that they can easily conduct business activities anywhere in the country, including free zones.


To make sole establishments more accessible to qualified people, the UAE Government has permanently waived off paid-up capital requirements that were once set in place for these company types.

Operate as an LLC

Those looking to set up businesses in the service-providing industry have the golden chance to set up their establishments as LLCs. Through an LLC structure, personal assets of the investor remain safe, and they are liable only to the extent of the funds invested in the business.

Documents required to set up a sole establishment

Much like with other licenses and company types, for a sole proprietorship company formation as well, you need to submit all documents as per the requirements set by the DED. This ensures the smooth processing of your application. Here are the documents required for the same;

How can you establish a Sole Proprietorship?

To deal in the Mainland in any Emirate, the main governing body for businesses is the Department of Economic Development (DED), and this is the entity you’re required to seek approvals from to legalize your business activities.

Setting up a business can easily become a tedious task when you don’t have access to professional guidance. We want to be the helping hand that launches your business towards success. To know more about how we can assist you in setting up a sole proprietorship, get in touch with our expert team, and let’s get the ball rolling.