A sole proprietorship is an exciting way to start a business because it is owned and run by one person, and the business license is also in their name. It’s a common way for people who offer professional services to set up a business. One thing that makes a sole proprietorship different is that it can’t have any shareholders or partners, nor can it have a company or corporate body.

Even though there is no shareholder in this case, you may need to hire a local service agent depending on the type of business you run to help you go back and forth to get government approvals, licenses, visas, and more. As is the case with Local Service Agents in general, they don’t have any say in how your business is run and don’t have any shares in it. You still own it 100%, but they get paid an annual fee for the services they provide.

The cost of setting up a sole proprietorship business is lower, but the fact that the owner is responsible for everything can be a problem in the long run. The person in charge of a single-location business is responsible for all of the money, both the profits and the losses and debts. In this case, if the business ran into financial trouble, the person might have to use all the money they’ve put into the business as well as their own assets to pay off those who are owed money.

At Black Swan, we know both the technical details of setting up a sole establishment and the risks that come with it. Our goal is to make these processes easier for you, help you understand your options, and give you the best strategies for your business. Let’s try to do great things together!

Benefits of a setting up a sole proprietorship

Setting up a sole proprietorship has many benefits for the person doing it. Here are some of them:

100% Ownership

Owners of sole proprietorships enjoy having full control over their businesses, whether they are from the area or from another country.

Ease in trading

The fact that sole proprietorships and other businesses with a mainland license can easily do business anywhere in the country, even in free zones, is a huge benefit.

Affordable

The UAE Government got rid of the paid-up capital requirements that used to be in place for sole establishments so that qualified people could use them more easily.

Operate as an LLC

People who want to start businesses in the service industry have a golden opportunity to set up their businesses as LLCs. With an LLC, the investor’s personal assets stay safe, and they are only responsible for the amount of money they put into the business.

Documents required to set up a sole establishment

For a sole proprietorship company formation, you need to send in all the required documents, just like with other licenses and types of businesses. This makes sure that your application goes through smoothly. Here are the things that need to be done;

• Filled application form
• Passport copy of the owner
• Owner’s residence visa or visit visa copy
• Business activity and trade name options
• Proof of registered office address
• Local service agent’s Emirates ID copy (if any)
• Proof of knowledge in the professional field (educational qualifications or professional experience/ required by some activities only)

How can you establish a Sole Proprietorship?

The Department of Economic Development (DED) is the main governing body for businesses on the Mainland. If you want to do business in any Emirate, you must get permission from the DED to do so.

• The first thing you need to do to set up a sole establishment is to send the DED your business activities and business name to get initial approval. This is a sign from the DED that you can move forward with the rest of the process.
• Depending on how you run your business, now would be a good time to hire a Local Service Agent. Along with this LSA, you must write and sign an agreement that spells out each of your duties (as well as the annual fee that the Local Service Agent will be awarded, if required).
• After those things are taken care of, it’s time to think about office space. For mainland licences, you must have a physical office. You must send your tenancy contract and Ejari to the DED along with other documents after you’ve rented an office space and made sure everything is set.
• Now would be a good time to apply for any special permissions that your business might need from other groups.
• When you have all of the above, you can send all of the paperwork back to the DED, make your payment, and get your business licence.

Setting up a business can quickly become a boring job if you don’t have help from a professional. We want to give your business the boost it needs to be successful. Get in touch with our expert team and let’s get the ball rolling on how we can help you set up a sole proprietorship.

Tags : Business Setup Dubai, Company Formation Dubai, Company Registration Dubai, Dubai Freezone Company Formation, Dubai Mainland Company Formation, Business Incorporation Dubai, Professional License in dubai