Sole Establishment in UAE On-shore
Sole Establishment or Proprietorship is a legal entity formed in the mainland under the name of a sole proprietor. The liability of the Sole Establishment is not limited meaning that the owner is personally liable, without limit and to the full extent of his assets, for the liabilities of the establishment. Sole Establishments can carry out either commercial or professional activities.
One should note that as per UAE companies laws, a sole establishment to carry out commercial business activities can only be formed only by UAE nationals and nationals of Gulf Cooperation Council (subject to certain conditions). Commercial business activities are defined in the Article 5 – 6 of the UAE Federal Law No. 18 of 1993 on Commercial Transactions and include the activities such as trading, import-export, real estate development, brokerage, facilities management, construction, manufacturing and others.
Expatriates can register Sole Establishments for providing professional or consultancy services such as medical clinics, management consultancy, legal consultancy, IT consultancy, HR consultancy, training and similar services. The Sole Establishment owned by a foreigner should appoint a local service agent in accordance with UAE laws. The local service agent is a UAE national (either individual or a company), whose primary job is to act as liaison between the entity and the government departments. For example, the local service agent applies for various approvals, work permits, visas etc. The relationship between the principal entity and the local service agent is regulated by an agency agreement that has to be notarized and registered with the Department of Economics Development. Local service agency agreement can be unilaterally terminated by the principal entity.
At Mimo Legal Consulting we have the expertise you need to setup your business in the UAE. We will help you to choose the right legal structure and license based on your requirements and business objectives. We can also assist you in opening your bank account and acquiring residency visas in the UAE. If you are interested in setting up your business in the UAE, please contact us for further information.