company translation

Which is better for your company: an LLC or a sole proprietorship?

  • Categories: Business
  • Written By: Torjoman
  • Date: January 7, 2023

Among the most important components of business establishment in Dubai is forming the correct business model for your firm. Nevertheless, before deciding which sort of business model is best for your firm and digging into the LLC versus sole proprietorship discussion, it’s vital to acknowledge the differences between an LLC and a sole proprietorship in Dubai.

Limited Liability Company (LLC)

A limited liability company, sometimes known as an LLC, is a business entity having many shareholders. This is quite popular among Dubai entrepreneurs since it just demands the investors to contribute a little amount of money. Furthermore, owners are welcome to apply for as many visas as they desire.

A commercial trade licensing from the Department of Economic Development is required to form an LLC (DED). The company can trade with other countries inside the UAE as well as exports and imports items abroad with this license.

Costs of founding an LLC

A whole new license package for establishing a firm on Dubai territory costs around AED 25,500. This encompasses trade license, name and initial approval fees, Tasheel fee, service charge, company logo, 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, free VAT registration and tax consultation.

Single business 

A sole proprietorship is a business form that allows a single proprietor to own their firm completely. For this, the DED provides professional licenses to service-oriented businesses enable them to establish themselves in Dubai. Furthermore, owners of this company license have the flexibility of obtaining a virtual office as well as a quota of staff visas.

Some of the commercial activities for which a DED professional license can be obtained are listed below:


Accountancy and bookkeeping

IT solutions 

online marketing

Organization of events

The expense of establishing a sole proprietorship

It is cheap to establish a service-oriented business. Your Dubai inland corporation may be up and operating for less than AED 14,500. Trade license, name approval, initial approval, LSA notary fee, company stamp, Tasheel charge, service fee, comprehensive registration, free business setup consultation, and dedicated consultant are all included in this package.

Business owners may also receive a UAE investment visa for life for an extra AED 4,000. Immigration card, change of status, Emirates ID, visa stamping, office solution, employment visa quota, bank account help, free VAT registration, and tax counselling are all included in this complete package.

Sole proprietorship vs. Limited Liability Company

Because both corporate arrangements enable 100 percent ownership, the fundamental distinction between an LLC and a sole proprietorship is the partnership model and obligations. The investors of an LLC can pool their assets and resources by forming an LLC. And in the meantime, a business’s single owner has entire control over its operations and revenue. However, because they have no shareholders and are totally responsible for any unexpected legal or financial problems, they may be forced to face significant costs.

You would be capable of picking the correct corporate structure after you comprehend the differences between LLC and sole establishment in Dubai.

Obligation, possession, and administration, cost of establishing and registering the firm, and taxation are the most important elements to consider while deciding between an LLC and a sole proprietorship.

Employ corporate advisers to acquire a comprehensive view of what elements impact your company’s structure.

Call Torjoman to help you translate all the documents you will need in carrying out the procedures for opening your company. With Torjoman, you will get the best legal translation services in Dubai.

Call for a free consultation.

Shuraa Business Setup’s team of business formation professionals includes corporate counsellors with in-depth understanding of the UAE’s operating structure. In addition, the firm employs well-connected public relations professionals, as well as experienced attorneys, accountants, and tax specialists. They assist you with all of the formalities needed in starting a business, assuring a stress-free and rapid process.

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