Outlook on the Process of Sole Proprietorship Setup in Dubai

10Dec, 21

Outlook on the Process of Sole Proprietorship Setup in Dubai

Dubai is considered to be one of the most attractive Emirates in the UAE that offers lucrative opportunities for people to invest in a plethora of businesses ranging from tourism, import and export, cosmetics, and others. Since UAE is one of the most entrepreneur-friendly nations across the Middle Eastern region which is backed up by the fact that the government plays a significant role in pushing Investments in both the private and public sectors. Varied options regarding business activity, type of company among others are available for the proprietors for setting up the company.

Furthermore, the booming tourism sector of the Emirate further adds up to the significant opportunities for investments in food and beverage, hospitality and entertainment among others. Thus, projected to propel investments in business as well. Also, according to a survey by the World Bank Group, Dubai has been evaluated as the easiest place to do business.

What is a Sole Proprietorship?

Sole Proprietorship is an entity that is wholly owned by one individual who is personally liable for the entity's liabilities to the full extent of his assets. This type of business can operate in either a commercial or professional capacity in the Emirate where it is registered. Since only one owner has control over the organization it makes the business process simpler and leads to 100% profit as well. However, stringent norms, regulations, and compliances are there which are necessary for setting up the entity in the city.

Features of a Sole Proprietorship

Sole Proprietorship possesses a number of features which have been elaborated below.

Formation and Closure of Business

  • This is a type of business entity that is created by the owner.
  • This is a type of business entity that is created by the owner.
  • The sole proprietorship form of business is not bound by any legal conventions.
  • In some instances, legal formalities are required or the owner should have a particular license or a certificate to run the business.
  • The owner has the authority to close the firm at any time.


  • The sole proprietor has unlimited liability in this type of business.
  • In this instance, the owner is personally liable for all debts.
  • If he takes out a Loan for his company, he will be responsible for all dues.
  • As a result, he is personally accountable for any debt that his personal estate can recover if funds are insufficient.

Profits, Losses, and Risks    

  • Since there is a single owner, all the business risks are to be borne by the proprietor itself.
  • On the other hand, the sole owner is entitled to all of the profits or losses generated by the business.

Control over the entity

  • Because the sole proprietor has complete authority over all rights and duties, he manages all aspects of the business.
  • No one can interfere with a sole proprietor's business operations.
  • As a result, only the sole proprietor has the authority to change his ideas.

No separate Entity

  • The owner and the business are treated as two independent entities in the Accounting system.
  • However, the law does not distinguish between a proprietor and his or her firm.
  • As a result, the sole trader is the only individual who performs all of the business activities, and so the business has no identity without him.

 Business Continuity

  • Death, imprisonment, physical illness, insanity, or bankruptcy of a sole proprietor will have a direct impact on the firm or may result in its closure.
  • He can administer the business on behalf of the proprietor if he is the beneficiary, successor, or legal heir of a sole proprietor.

Anyone can set up a Sole Proprietorship in Dubai

Since there are no restrictions regarding the nationality of the proprietor. The setting up of an entity becomes easy throughout the Emirate. GCC Nationals, UAE Nationals, as well as foreign nationals, can set up a sole proprietorship business in Dubai. However, the regulations and requirements may differ depending on the nationality of the person.

In the case of a foreign national, In this case, a person can only apply for the professional License of the proprietorship. However, an LSA (Local Service Agent) is mandatory in this case for the registration of the establishment.

In the case of UAE or GCC nationals,   In this case, any type of sole proprietorship is allowed irrespective of the industrial segment.

Read More: All you Need to Know about 100% Company Ownership in the UAE 

How the Government supports the setting up of Sole Proprietorship in Dubai?

Nominal regulations by the regulatory bodies has played an important role in easing the setting up of entities in the Emirate itself. Additionally, this has further played a positive role in attracting FDIs as a foreign company is given the ability to hold 100% ownership. Moreover, the growth of SMEs has further amplified the investments since strong government support towards the growth of SMEs in the country has further attracted a plethora of investors. For instance, Dubai SME, an integrated division created by the Department of Economic Development (DED) offers guidance and training to aspiring entrepreneurs. Also, it exempts the start-ups from fees related to licensing for almost five years. Additionally, It also helps in issuing the Intelaq license for Dubai residents who wish to run a business from home. However, some terms and conditions are there which are required to meet the criteria.


Since is a fairly lucrative Emirate for the growth of businesses high growth is anticipated across the businesses which are further beneficial for the sole owners of the businesses as they enjoy 100% of the profits.

We at Dhanguard offer several options to the business owners whether locally present or international for smoothening the establishment of their businesses through paperwork management, registration processes, and other business-related works. Our strong base enables us to establish a strong foundation for your company leading to considerably higher growth. If you require business setup services in Dubai, please contact us and we will gladly assist you.