Setting up an LLC or sole establishment in the UAE: which is right for you?

September 15, 2023

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Have you ever wondered why Dubai has grown into such a big business hub in the Middle East in such a short span of time? It is not only the investment and facilities provided but also the laws made by the UAE government to regulate all matters in such a way that allowed freedom to people while still preserving the cultural values of the city.

With growth of business in Dubai, many new topics of discussion rose to popularity as well. It is common for this to happen because people are now interested in something new and in a city like Dubai, who doesn’t want to talk about what is best for business?

The government of the UAE created many business zones to attract businesses and it has been successful in doing so. For those business owners and entrepreneurs who were not aware of the laws of Dubai, business setup Dubai consultancies started providing their services. The core services of these consultancies include mainland company formation, free zone company formation and offshore company formation.

So naturally, one of the topics for people to talk about is the comparison between a Limited Liability Company and a sole establishment. We will contribute to this discussion and make things clear.

What are the advantages of setting up an LLC?

Let’s look at some of the advantages of setting up an LLC:

  1. This corporate structure allows you to access both local and international markets with ease.
  2. If the LLC is based in the UAE, it can have its branches anywhere in the rest of the UAE.
  3. This corporate structure allows the company to get loans on cheaper interest rates.
  4. There is no minimum limit of investment for those who look to setup a LLC in Dubai.
  5. Corporate bank account opening is easy.
  6. Investor visa can be obtained without depositing a security if you have formed a LLC in Dubai.
  7. Premium business services are available for LLC owners to use.

What are the advantages of setting up a sole establishment?

  1. The cost of setting up a sole establishment is lower than other types of business setups.
  2. You can register your sole establishment in a matter of hours if you have the complete set of required documents and you fulfill the criteria.
  3. Corporate bank account opening is easy and quick for a sole establishment as well.
  4. If you are the owner of a sole establishment in the UAE, you have the permission to sponsor your dependents when it comes to their visa applications.

What should be your choice?

None of the two setups discussed above are better than the other one. When working on a business setup Dubai, there are plenty of things to keep in mind in order to get the best results. The decision depends on the type of business you want to run, the scale of operations and the your current conditions.

However, it must be kept in mind that the legalities regarding liability for both setups are different. You are exposed to the risk of more law suits if you are the owner of a sole establishment as this makes you completely responsible for all liabilities and debts owed.

KWS Middle East can help you make the smart choice using its experience in guiding businesses towards success. The consultancy offers valuable advice and business solutions like mainland company formation, company registration and visa services. Other services include trademark registration and trade license services.

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