LLC vs Sole Establishment – Which is the right choice for your business?

Share this blog

LLC vs Sole Establishment – Which is the best option? For a business owner, selecting the appropriate business structure is one of the most important choices. The protection of personal assets, taxation, and the seamless transition of ownership can all be impacted by a business’s structure. Many companies in Dubai begin as LLCs (Limited Liability Companies) or sole proprietorships. The greatest option for your business may depend on how you choose between an LLC and Sole Establishment.

What is a Limited Liability Company (LLC) in UAE?

Business owners in the United Arab Emirates have expressed a strong preference for limited liability companies, or LLCs. Multiple owners are allowed for its formation. Whereas a free zone business is limited to where it can operate in the United Arab Emirates, a mainland company’s trade license in Dubai is provided by the economic department. The minimal investment required by an LLC is another perk; stockholders are not required to provide a minimum amount of cash. The number of visas that can be obtained by hiring staff is also unlimited. As a result of their immunity from personal liability, LLC stockholders are not responsible for the debts or financial claims of the business.

Setup Your Business in Dubai!

LLC Company Setup Cost

Around AED 25,500 is the cost of an all-inclusive commercial license package for setting up a firm in the Dubai mainland. This covers a variety of fees, such as those for the trade license, name and initial approval, Tasheel, service, stamp of the company, memorandum of association/notary, immigration card, investor visa, Emirates ID, medical test, status change, visa stamping, office sustainability contract, office solution, employment visa quota, bank account assistance, free VAT registration, and tax planning.

What is Sole Proprietorship or Sole Establishment?

A company that permits one business owner to own 100% of the shares is a sole proprietorship. Both individuals and businesses can use this business structure.
When it comes to starting a sole proprietorship in Dubai, the UAE has a lot to offer professionals. You can save money on recruiting staff and space renting by setting up a virtual address and allocating quotas of visas. Professional service is the primary industry that is the focus of activities conducted under sole proprietorship. Establishing a firm with 100% ownership and the help of a local service agent is the greatest option for international entrepreneurs.

Sole Proprietorship Setup cost?

Starting a business that provides services is quite affordable. You can launch your Dubai onshore business for as little as AED 14,500. Trade license, name approval, initial approval, company stamp, LSA notary fee, Tasheel charge, service fee, full documentation, free business setup consultation, and dedicated consultant are all included in this package.

Moreover, entrepreneurs can obtain a lifetime UAE investment visa for an extra AED 4,000. The immigration card, status change, Emirates ID, office solution, employment visa quota, bank account support, free VAT registration, tax advice, and visa stamping are all included in this all-inclusive package.

Difference Between LLC and Sole Proprietorship in Dubai?

The main benefit of an LLC over a sole proprietorship is that the owner’s responsibility is restricted to the amount they have invested in the business; as a result, they are not held personally responsible for any debts the business may incur. One important financial consideration is that, depending on the rules governing it, a sole proprietor may be held accountable for the company’s debts. Still, it is a good choice for a lot of professionals and new businesses. A sole proprietorship is not protected from liabilities. Specifically, a sole proprietor’s assets may be pursued by creditors to satisfy their debts, whereas your assets are protected by an LLC firm.

LLC vs Sole Establishment – Which is best for your business?

It depends on a variety of factors, including the type of your business the extent of your trade license, the number of employees, and more. The most crucial point to remember is that, with an LLC, your obligations are restricted to your business investments, but in a sole proprietorship, your liabilities are unrestricted and may include your assets. LLC might be a preferable choice if this financial exposure concerns you. However, it is always advised to receive a free consultation from our Dubai-based company setup specialists, who are knowledgeable in assisting you with all your business needs.

How Decision Management Consultants Can Help?

If you’re interested in starting a business in the United Arab Emirates but don’t know where to start, you’ve come to the perfect spot. DMC has used a variety of business structures to create innumerable businesses around the UAE. In case, you are confused about whether business structure—sole proprietorship or LLC—will suit you better, you can get in touch with Decision Management Consultants. Please get in contact with us now to begin a discussion.

If you require any additional information or guidance from one of our experienced business advisors, please call us on +971-4-262 40 23

Setup Your Business in Dubai!

Stay Connnected

Trending Blogs

Get Help from Experts