The United Arab Emirates now allows LLCs to be formed by just one person. The single-owner or one-person company license is an ideal business structure for entrepreneurs and investors who want to limit their liability and enjoy Dubai’s tax advantages to the full.
An LLC (Limited Liability Company ) is a legal entity that separates the company from the owner, meaning that personal assets are protected from any liability incurred by the company’s operations.
Let’s get started on how to set up a one-person LLC. In this article, we’ll cover the following:
- One person LLC Dubai or UAE – What does it mean?
- Ownership of a one-person company in Dubai
- Trade name rules for a one-person LLC Dubai
- Documents required for setting up a one-person LLC in Dubai, UAE
- Costs of setting up a one-person company in Dubai
- Business setup in Dubai with Trade License Zone
One-person LLC Dubai or UAE – What does it mean?
A one-person company LLC in Dubai, UAE, is a Limited Liability Company (LLC) in which a single individual serves as the business’ legal owner. While this may be similar to a sole proprietorship business entity, in an LLC the main company owner is not personally liable for the company’s debts while holding complete authority over the company’s actions.
Following Dubai’s recent changes to LLCs, all commercial, industrial, tourism operations and most professional business activities – except consulting firms – fall under the one-person company setup.
The one-person LLC offers unique benefits to the owner:
- The owner can add new employees as and when needed
- The personal assets of the business ownerare separate from the company
- The ownercan file the company’s taxes as a sole proprietorship or a corporation
- The owner is also eligible to transfer ownership of the company to others (such as family members)
It is important to note that one-person LLC companies fall under the same statute of regulations and registration processes as that other LLC companies. These cover public and private shareholding company structure types under LLC regulations.
Ownership of a one-person company in Dubai
There are a few key points to note regarding the ownership of a one-person company in Dubai:
- A foreign national living and working in Dubai is ineligible to set up a one-person company.
- A one-person company may only be formed and owned by a UAE or GCC (Gulf Cooperation Council) citizen.
- A corporate body can form and own a one-person company in Dubai, as long as the corporate body is wholly owned by a UAE national.
- Only UAE and GCC citizens and corporate bodies can apply for a one-person LLC license.
These are the essentials regarding the structure of a one-person company:
- The one-person company owner (who must hold a one-person company license) is also the company’s shareholder.
- While there is a provision for the appointment of a nominee director, this person has no authority unless the licenseholder/owner (who is also a director) cannot engage in commercial transactions.
- A one-person company cannot get equity funding or give employees stock options in the company.
In terms of business operations, the one-person company must abide by the following regulations:
- The one-person LLC license holder (the company owner) must appoint a manager.
- The main company licenseholder can nominate themselves as a manager or appoint someone else.
- There are no restrictions on the manager’s nationality, but a one-person company cannot have more than 11 managers appointed at any one time.
- When a one-person company changes its managers, the company must inform the relevant government authorities within 30 days of the manager’s service ending.
- Furthermore, a one-person company must appoint a new manager within these 30 days.
Trade name rules for a one-person LLC Dubai
The Dubai Department of Economic Development (DED) has created a guideline for trade names for one-person LLC (Limited Liability Company) companies. Investors must obey the DED business regulations for trade names to get a one-person LLC license.
There are three trade name registration guidelines:
- Trade names for a one-person company must consist of the shareholder’s name, its business activity and legal structure and must be followed by the inclusion of the term LLC. For example, “Ali General Trading One-Person Co LLC”.
- The shareholder can include two names in the trade name – for example, “Ali Behrouz General Trading One-Person Co LLC”.
- The trade name does not need to begin with the name of the shareholder, but in such cases, the trade name must start with the term ‘owned by.’ For example, “Owned by Ali Behrouz General Trading One-Person Co LLC”.
Documents required for setting up a one-person LLC in Dubai, UAE
To get a one-person LLC (Limited Liability Company) license from the DED, the investor must apply for all relevant government clearances to create a one-person LLC in Dubai.
For this process, the licenseholder (ownerof the company) must collect, complete and submit the following required application and registration documentation to the DED:
- The company ownermust submit an attested copy of their passport
- Residential proof
- Copy of the appointed manager’s passport
- Personal details of the one-person company owner
- A notarized and publicly authenticated Memorandum of Association
- Trade name of the one-person company (as outlined in the guideline above)
- Original documents from the one-person company’s owner
Costs of setting up a one-person company in Dubai
The cost of setting up a one-person company in Dubai is between AED 10,000 to AED 30,000. The price varies due to factors such as the type of business, registration fees, office space rentals, government fees, and more.
To get an accurate quote on the registration costs of setting up a one-person company in Dubai, contact Trade License Zone’s professional team. We are highly experienced in setting up one-person LLC companies in Dubai and the rest of the UAE.
Business setup in Dubai with Trade License Zone
When you partner with an expert such as Trade License Zone, a business setup in the UAE for a one-person LLC company is streamlined. Trade License Zone will save you from the frustration of unnecessary delays or rejections and simplify the entire application and company setup process for your single-owner company in Dubai, UAE.
The specialists at Trade License Zone can get started as soon as you provide us with some basic documentation. After that, just sit back and let our team take care of the rest. We’ll manage your one-person LLC license application, communicate with all relevant government departments and authorities, and report back to you when you’re ready to launch your new entity. It really is that simple.