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Documents require to Start a Sole Proprietorship Company in Mainland

By Shivangi - 28 Dec 2021 Last Updated: 07 May 2022
Documents require to Start a Sole Proprietorship Company in Mainland

For long years, the UAE, one of the most desirable Emirate in the Middle Eastern area, has played a significant role in revenue generation across a variety of industry verticals. Strong government support for emerging entrepreneurs, combined with strong economic growth, has prompted foreign nationals to invest across the city in sole proprietorship businesses in a variety of sectors, including medical services, engineering consultancies, and management consultancies, to name a few. Furthermore, numerous local nationalists have been actively involved in the establishment of sole entities around the Emirate. The legal documentation, however, differs in the circumstances of both local and foreign nationalists. In this section, we'll go over the documentation required for setting up a Sole Proprietorship in Mainland.

What is Sole Proprietorship in the UAE?

A Sole Proprietorship is a structure of the business that has only one owner. Since the initial fees are often modest and you can start your business with just one person. For entrepreneurs wishing to work alone in the UAE, this could be a viable option. A qualified foreign investor who starts a firm or forms a sole proprietorship to provide a professional service can own 100% of the company. The Commercial Companies Law (CCL) does not apply to professional service establishments, although they must be licensed by the Department of Economic Development (DED). To engage in economic activity, only UAE nationals or GCC nationals can register a sole proprietorship (subject to certain conditions). Expatriates can only form Sole Proprietorships to offer professional and consulting services (such as medical services, engineering consultancies, management consultancies, legal consultancies, IT consultancies). However,  NSAs are not involved in the business in any way.

What is the Registration process of the Sole Proprietorship Company in the Mainland?

The business setup process is the same for all legal forms, except for document changes.

  • The following are the steps in forming a sole proprietorship:
  • Choosing a trading name for your company; must be unique and relevant to your industry.
  • Choosing the legal structure, which is a Sole Proprietorship in this case.
  • Getting the Department of Economic Development's initial approval;
  • The clearance is a prerequisite for registering your company.
  • Getting permission from other departments
  • Obtaining a business license by submitting an application form and supporting papers.
  • After you've registered your business, you can apply for a license.

What are the Documents required to Start a Sole Proprietorship Company in Mainland?

Given below is the list and type of documents required to start a Sole Proprietorship Company in the Mainland:

  • The application form
  • Business name of the sole trader
  • Proof of registered address
  • Licensing application form
  • A copy of the passport of the business owner
  • Information about local agents while dealing with foreign citizens
  • The residence permit
  • A no-objection letter obtained from the sponsor

However, it is also to be kept in mind that there can be a need for some additional documents depending on the activities carried out by a sole proprietorship.

Read More: Setting up a Holding Company in Dubai

What are the Criteria to Start a Sole Proprietorship Company in Mainland?

The criteria are mentioned as follows:

  • When a sole proprietor is engaged in consulting activities, he or she must have received an academic certificate for the same activity.
  • The number of managers who can be appointed under a professional license is limited.
  • Capital should not be an area of thought to the Sole Proprietor.
  • The business name must be relevant to the company's commercial activities.
  • A Sole Proprietorship might have multiple locations.
  • Each individual may engage in any or all of the activities listed in the main business license.
  • According to DED rules, the owner/s can also change the legal form of the property.
  • In order to engage in some economic activities, a single establishment may require the owner or manager to take exams at an American university in Dubai. These tests are necessary at the time of license creation and renewal.

What are the Advantages and Disadvantages of Sole Proprietorship Company?

The advantages are given as follows:

  • A sole proprietor will have complete control over the entire organization, allowing for swift choices and the freedom to conduct business as they see fit.
  • A proprietorship is not required by law to make its financial accounts or other papers available to the public. This gives the company a high level of confidentiality, which is vital in the commercial world.
  • The owner gets the most out of the company. He is not required to share any of his earnings. As a result, the work he puts into the company is fully repaid in incentives.
  • Being your own boss provides a fantastic sense of fulfillment and accomplishment.  You just have to answer to yourself, which is a huge boost to your self-esteem.

The Disadvantages of Sole Proprietorship are explained below:

  • One of the most significant drawbacks of a sole proprietorship is the owner's unrestricted liability. If the business fails, the owner's personal riches may be wiped out, as well as his future business chances.
  • Another issue is the restricted capital available to a sole proprietor. His own resources and the money he can borrow may not be sufficient to expand the company. Lending to sole proprietorships is likewise frowned upon by Banks and financial organizations.
  • A sole proprietorship's life cycle is unknown and dependent on its owner. If the owner becomes incapable in any way, it has a detrimental impact on the business and may even result in its closure.
  • A sole proprietorship can't function without its owner. In addition, a sole proprietor has minimal management skills. And, due to his limited means, he may not be able to engage skilled personnel to assist him. This could lead to mismanagement and bad decision-making in the company.


Connect with Dhanguard if you are looking forward to starting a Sole Proprietorship Company in Mainland. Our business setup team would gladly assist you throughout the process from the 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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