Having an LLC licence means that local authorities treat the company as a separate entity and protect your personal assets from any liability incurred by the business.
However, the UAE is a place of innovation and business opportunities; you can now form an LLC with just one person. The single-owner or One Person Company licence is a fabulous option for single owners who want to limit their liability and enjoy tax advantages.
Here’s everything you need to know about the single owner company licence. In this article, we will cover:
- • One Person Company Dubai, UAE: What is it?
- • Ownership of a One Person Company in Dubai, UAE
- • Trade name guidelines for a One Person Company in Dubai, UAE
- • Documents needed for setting up a One Person Company in Dubai, UAE
- • Costs of setting up a One Person Company in Dubai, UAE
- • Working with Creative Zone
One Person Company Dubai, UAE: What is it?
A One Person Company in Dubai, UAE (single owner company) is a limited liability company with only one member who is also the business’s owner. It is an alternative to the sole proprietorship company. All commercial, industrial, and tourism operations and most professional activities, except consulting enterprises, fall under the One Person Company.
The One Person Company offers certain distinct benefits over the sole proprietorship. It gives one person, the business owner, complete authority over its actions while limiting their responsibility towards contributions to the company. Additionally, it is subject to the same rules as other limited liability companies.
Other benefits include:
• Can add new employees as and when needed
• The members’ assets are safe from lawsuits
• The owner can choose whether to file taxes as a sole proprietorship or a corporation
• The owner may also transfer ownership of the firm to others, such as family members.
Ownership of One Person Company in Dubai, UAE
It may be formed and owned only by a UAE or GCC citizen as foreign nationals are ineligible for this type of licence. Also, a corporate body can set up and own a One Person Company as long as the body is wholly owned by a UAE national.
The investor who holds the One Person LLC licence is also a shareholder. There is a provision for the appointment of a nominee director, who will have no authority unless the owner, who is also the director, cannot engage in commercial transactions. In a One Person Company, there is no option to get equity funding or give employees stock options in the company.
To ensure business operations, the licence owner needs to appoint a manager. They can either nominate themselves or someone else. There is no restriction on the manager’s nationality; however, 11 is the maximum number of managers they can appoint.
If there is a change of managers, the company needs to inform the concerned authorities within 30 days from the date of the manager’s service coming to an end. Additionally, the company needs to appoint a new manager during this period.
Trade name guidelines for a One Person Company in Dubai, UAE
Due to the unique nature of this licence, the Department of Economic Development (DED) insists the investors follow specific guidelines when naming the entity.
1. The trade name should consist of the shareholder’s name, the business activity (including the legal structure), followed by the term ‘LLC’. For example, ‘Ibrahim General Trading One Person Co LLC’.
2. The shareholder can include two names in the trade name. Using the previous example, it would now be ‘Ibrahim Ahmed General Trading One Person Co LLC’.
3. If the trade name does not begin with the name of the shareholder, then the phrase ‘owned by’ needs to be mentioned. For example, ‘Owned by Ibrahim General Trading One Person Co LLC’.
Documents required for setting up a One Person Company in Dubai, UAE
You must get all relevant government clearances as the DED requires them to establish your single-owner company. To do this, you must submit the following documentation:
- • An attested copy of the owner’s passport
- • Residential proof
- • Personal details of the owner
- • The issued and notary public authenticated Memorandum of Association
- • Name of the company you are going to form
Costs of setting up a One Person Company in Dubai, UAE
The cost of starting a One Person Company in Dubai, UAE, is not as expensive as you think it is. The cost to register your company ranges from AED 10,000 to AED 30,000. However, variables such as the type or nature of the business and rental charges for the office space may increase the final cost.
Contact one of our business setup managers to get an exact quote. They will be able to give you an up-to-date price that matches the activities you want to carry out.
Working with Creative Zone
Hopefully, you now have a better understanding of the costs and requirements for a single owner company. Creative Zone can help with your free zone or mainland company formation in Dubai.
We are the UAE’s oldest and most trusted business setup expert. Since 2010, we have helped over 44,000 entrepreneurs successfully establish their businesses.
We specialize in delivering solutions that best fit your needs when starting a business by providing quick, dependable, hassle-free, and experienced assistance.
Assisting with your business setup in Dubai is only the start. We also provide a range of services, including tax preparation, legal advice, and HR management.
When you become our client, you get access to our community of fellow entrepreneurs. You can interact and network with the region’s larger business community through CZ Connect, our networking tool.
Take advantage of our free consultations today and get solutions that best fit your need!