Which is right for you? - LLC or sole establishment in the UAE

author Post By: endeavour 06 Aug, 2021
Which is right for you? - LLC or sole establishment in the UAE

Entrepreneurs have many options while setting up business in Dubai. Hence, choosing the business structure that would be apt for their business needs and financial benefits is one of the most important decisions to be made. The UAE government has successfully setup many business zones to attract businesses. However it is not easy for new business owners and entrepreneurs with inadequate knowledge about laws of Dubai to take right decision on business setup. They can approach a Business Consultancy for low cost business setup in Dubai. These consultancies mainly focus on Mainland business setup Dubai, free zone business setup and offshore business setup. Dubai mainland business setup doesn’t provide any restrictions to whom and where you can trade in Dubai.

Choosing the right business is the first thing to decide and there are two options available - Form a limited liability company (LLC) or set up a sole establishment.

Advantages of setting up an LLC:

  • With this corporate structure, you can easily access both local and international markets.

  • LLC based in UAE has the authority to have its branches anywhere in UAE.

  • One can avail for loans on cheaper interest rates under this corporate structure.

  • No minimum investment limit is setup for the LLC businesses.

  • Business under LLC can easily open corporate bank account.

  • If you have formed LLC, investor visa can be acquired without depositing a security.

  • LLC business owners can avail premium business services.

Advantages of setting a sole establishment:

  • The cost involved in sole establishment business setup is comparatively lower.

  • A sole establishment can be registered within few hours if you have all necessary documents and fulfill the criteria. 

  • Account opening under corporate bank is quite easy sole establishment businesses too.

  • Sole establishment business owners can sponsor their dependents when it comes to their applications.

Infact, both these business setups cannot be compared to pick the best one. Choosing the one that’s right for your business depends on various factors like the type of business you intend to run, license type, scale of operations, company size, and your personal circumstances. However, the one thing that differentiates them is that the legalities regarding liability for both setups are different. The liabilities are limited to your company investments when it comes to LLC whereas your liability is unlimited and includes all of your personal earnings under sole establishment. Considering this fact, setting up your business under LLC would be wise unless you have a specific reason for choosing sole proprietorship.

Got any queries or concerns in choosing business structure that is apt for your business? Get a free consultation with our company formation specialist today itself.