LLC vs Sole Proprietorship: Which is the best for your business? | Business Setup in Dubai

Forming the right corporate structure for your company is one of the most crucial aspects of business setup in Dubai. However, before figuring out which type of company structure is suitable for your business and getting into the LLC vs Sole proprietorship debate, you need to understand the difference between LLC and Sole establishment in Dubai. 

Limited Liability Company (LLC) 

A Limited Liability Company, more commonly known as LLC, has a shareholding structure with more than one partner. This is quite popular among entrepreneurs in Dubai as it requires the shareholders to make minimum investment. Moreover, this allows owners to apply for as many visas as they want. 

An LLC can be incorporated by availing a commercial trade license from the Department of Economic Development (DED). This business license allows the company to trade freely within the UAE as well as import and export products internationally. 

LLC set up cost 

An all-inclusive commercial license package for Dubai mainland business setup costs approximately AED 25,500. This includes trade license, name and initial approval fees, Tasheel fee, service charge, stamp of the company, memorandum of association / notary fee, immigration card, investor visa, Emirates ID, medical test, change of status, visa stamping, office sustainability contract, office solution, employment visa quota, bank account assistance, and free VAT registration and tax consultation. 

Sole establishment 

A sole establishment is a corporate structure which allows single owner to have 100% ownership of their company. For this, the DED issues professional license allowing service-oriented companies to start their business in Dubai. Moreover, holders of this business license also have the option to get a virtual office as well as employee visa quota. 

Below are some of the business activities which can avail DED professional license: 

Consultancy 

Bookkeeping & accounting 

Digital marketing 

IT solutions 

Event management

Sole proprietorship set up cost 

Setting up a service-oriented company is quite affordable. For just AED 14,500, you can get your Dubai onshore company up and running. This package includes trade license, name approval, initial approval, LSA notary fee, stamp of the company, Tasheel fee, service fee, complete documentation, free business setup consultation, and dedicated consultant. 

Furthermore, for an additional AED 4,000, business owners can get a UAE investor visa. This comprehensive package also includes, immigration card, change of status, Emirates ID, visa stamping, office solution, employment visa quota, bank account assistance, free VAT registration and tax consultation. 

LLC vs Sole proprietorship 

The primary difference between LLC and sole establishment is the partnership model and liabilities, as 100% ownership is allowed in both corporate structures. Incorporating an LLC allows the owners to pool in their assets and share resources. Meanwhile, the sole owner of a company enjoys complete freedom and control over their operational aspects and finances. However, in case of any unseen legal or financial trouble, they may have to bear huge expenses as they have no shareholders and the liability is solely theirs.

Once you understand the difference between LLC and sole establishment in Dubai, you will be able to choose the right company structure. 

The primary factors to be considered for LLC vs Sole proprietorship include personal liability, ownership, and management, cost of forming and registering the business, and taxation. 

To get a clear picture on what factors affect the structure of your company, you need business expert advisors. 

Get a free consultation today

The team of company formation experts at Bizgate comprises business expert advisors with extensive knowledge of the operational framework in the UAE. Furthermore, the company includes well-connected public relation officers, seasoned lawyers, accountants, and tax consultants. They help you with every formality involved in business setup, ensuring a hassle-free and quick business setup journey. 

To book a free consultation, call or WhatsApp us at +971 56 220 1709. You can also drop us an email: startups@bizgatebss.com.