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What is the Cost of Sole Proprietorship Company Formation in Mainland

By Shivangi - 27 Dec 2021 Last Updated: 07 May 2022
What is the Cost of Sole Proprietorship Company Formation in Mainland

The United Arab Emirates is an entrepreneur-friendly country that provides entrepreneurs with a variety of alternatives for starting a business in Dubai or any of the country's emirates. You have several options when it comes to the type of business you want to start, the type of company (also known as a legal form), the number of shareholders you can have, and the jurisdiction in which you want to do business. In our study, we will further discuss the cost of sole proprietorship company formation in the mainland, benefits of the sole proprietorship, features, and others.

What is the meaning of a Sole Proprietorship Company?

The terms 'sole’ means one and ‘proprietorship' means ownership. As a result, the business organization has only one owner. This indicates that a sole proprietorship is a type of business structure in which a single person owns and operates the business, reaps the benefits, and suffers the losses. It is simple to set up and the least expensive of all ownership options. The owner has unlimited liability, which means that if the firm is unable to pay its creditors, the creditors may pursue the owner's personal assets. Small businesses commonly use the sole proprietorship structure. These businesses are frequently owned by a single person, usually, the person who is in charge of the day-to-day operations. Also, sole proprietorships offer benefits and opportunities that wage earners do not get. This, together with many legislative measures aimed at supporting small and medium companies in recent years, has resulted in a large increase in the number of has further instigated new investors as well.  According to the World Bank's 2020 Doing Business Report, the UAE ranks first in the Middle East region in terms of ease of doing business and 16th at the global level, as well as first in the GCC area in offering a regulatory framework that is beneficial to launching a business.

Characteristics of a Sole Proprietorship Business

Given below are the characteristics of a sole proprietorship business:

Single Ownership

A sole proprietorship is a type of company structure in which a single person begins the business by bringing together all of the necessary resources.

No distinction between Ownership and Management:

The firm is run by the owner, who handles it with his own competence and insight. As opposed to the corporate type of business organization, there is no separation of ownership and management.

Less Legal Formalities

There are no legal formalities involved in the formation and operation of a sole proprietorship business entity. As a result, it's easy to set it up.

No Separate Entity

There is no separate entity for the business unit from the owner. The owner and the business are considered as a single entity, and the proprietor is in charge of everything that occurs in his company unit.

No Sharing of Profit and Loss

The profits are enjoyed alone by the individual proprietor. At the same time, he is responsible for the full loss. There is no one else to share the company's profits and losses. He is the only one who takes the risks and takes the rewards.

Unlimited Liability

A sole proprietor's liability is unlimited. In the event of a loss, if his business assets are insufficient to cover his business liabilities, his personal property can be used to cover the debts.

One-man Control

The sole proprietorship business's controlling power is always retained by the owner. He runs the company according to his own desires.

Read More: Foreign Branch Incorporation in the UAE

Meaning of Mainland Company

A Mainland Company is one that has been registered with the Department of Economic Development in the United Arab Emirates (DED). It means that if you wish to do business on the UAE's Mainland, you must first register a business entity with the DED, which will then issue you a business license. Mainland businesses can operate in any sort of manufacturing, commercial, trading, professional, or tourism activity. DED's business policies restrict some professional activities, while others require approval from regulatory agencies.

Foreign investors have the option of forming a partnership in which UAE citizens own 51% of the company or forming a sole proprietorship in which they own 100% of the shares. However, some economic activities are restricted to UAE residents alone.

Documentation regarding Sole Proprietorship Company Formation in Mainland

The list of documentation that is required to form a sole proprietorship company in the mainland are given as follows:

Application Form

An application form is a simple form that the applicant must fill out with essential information.

Application for Licensing

The license application form is a report that contains information about the entity's operation strategy. In layman's words, it's a form that's typically necessary when applying for a business license.

Name of the Company

It is the name under which the entity will function that the sole proprietor must offer.

Copy of the Proprietor's Passport

For legal verifications, the proprietor must produce a copy of his or her passport.

Contact information of the Local Agent

If a foreign nationalist establishes a sole proprietorship, he or she must send the details of the local agent.

Identification of the Registered Address

The proprietor must give proof of the entity's registered office address.

Read More: How Can You Get a Company Easily Registered at Low Cost in UAE?

Cost Structure of Sole Proprietorship Company Formation in the Mainland

The Department of Economy (Department of Economic Development), the government entity entrusted with the setting and driving the economic agenda of the emirate of Dubai, UAE, and can issue a sole proprietorship license to Dubai home-based firms. The license is issued in the entity's trade name.

It can also be applied for through the "Invest in Dubai" platform for a charge of AED 1070 (licensing fees and knowledge and innovation fees) plus AED 300 (application fee) (Dubai Chamber membership fees).


With the growing businesses across the various industrial sectors, a Sole Proprietorship Company Formation may sound fruitful for investors with limited budgets. If you are looking forward to forming a Sole Proprietorship business in the Mainland, connect with Dhanguard. Our business setup team would gladly assist you in the process from that start to its end..

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides the company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free offshore company formation services and company formation services in Mainland and Freezone in UAE.

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