Setting Up a Sole Trader in Dubai

Updated on Sunday 04th March 2018

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The prolific business climate of Dubai allows investors set up their activities through varied legal forms. According to their budgets and needs, foreign investors can enter the UAE market by establishing the operations as sole proprietorships. In other words, this entity can be a proper option for small businesses in Dubai and it is subject to different terms and conditions as stipulated by the Commercial Code and the Companies Act in Dubai. In legal terms, our lawyers in Dubai can offer comprehensive information and support when forming a business as a sole trader in Dubai.

The sole trader in Dubai is suited for small businesses

Dubai nationals or those from countries which are members of the Gulf Cooperation Council (GCC) can open sole proprietorships in Dubai by obtaining a license from the Department of Economic Development. Sole proprietorships engaged in industrial or commercial activities can be owned only by UAE nationals or GCC nationals. Likewise, sole traders in Dubai can be individuals of any nationality but need to make proof of their professional skills. Foreign investors in Dubai can appoint a commercial agent to act on their behalf in business activities performed by a sole trader. This Local Service Agent can help you if you want to act as a medical professional or engineer in Dubai. For more information about the types of companies which can be foreign-owned, we suggest you address to our attorneys in Dubai.

Moreover, the video below can explain the terms and conditions for establishing as a sole trader in Dubai:

How to open a Dubai sole trader

Foreign investors must sign a local service agent agreement in order to be able to run their sole proprietorship in Dubai. The agreement must be authenticated by a public notary or a court in Dubai. The only exception to the rule is a sole proprietorship that offers legal services or legal consultancy - it doesn't require an agreement with a local service agent. The sole proprietorship allows the owner to engage in a wide range of business activities, from services like tailoring to contractors or builders or home tutors and even restaurant owners. The accessibility and easy set-up process make this business form a widely preferred option for investors in Dubai.

Necessary documents for opening a sole proprietorship in Dubai

Investors from abroad who want to establish their activities as sole traders in Dubai must prepare several types of documents among which, the following are mandatory:

• the residence visa for UAE;

• the proof of experience and qualifications;

• the bank reference letter;

• a no-objection letter of the sponsor;

• details about the address of the General Manager;

• a passport copy of the General Manager.

The above-mentioned documents must be notarized and confirmed in the home country and also in the UAE.

The benefits of sole traders in Dubai

Sole proprietorships in Dubai address to investors willing to have 100% ownership and full responsibilities for losses and profits. It is good to know that the activities of sole traders can also be established in Dubai’s free trade zones. Entrepreneurs can operate in the medical or IT fields or can offer financial management and consultancy services in Dubai.

Our team of advisors can help you with company incorporation services. Please contact our Dubai law firm for in-depth information about how to set up a sole trader in the UAE.