Updated August 2026. The UAE sole proprietorship, registered as an Individual Establishment for UAE nationals engaging in commercial activities, or as a Professional Licence for expatriates and nationals practising a profession, is the simplest and lowest-cost business structure available on the UAE mainland. A civil company is a closely related structure used by two or more professional licence holders such as doctors, lawyers, engineers, and accountants practising together. Both forms are regulated under the UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021) and emirate-level DED licensing rules. Professional licences in Dubai start at approximately AED 7,500-12,000 per year, making the sole establishment the most economical entry point for freelancers, consultants, and sole traders who do not require the liability protection or multi-shareholder structure of an LLC.
- UAE nationals may hold an Individual Establishment (sole establishment with commercial activities) in their own name; expatriates are generally restricted to a Professional Licence covering their specific licensed profession.
- Unlike an LLC, a sole establishment provides no liability shield; the owner is personally liable for all business debts and obligations, including with personal assets.
- A civil company is formed by two or more professionals under a civil partnership agreement and is registered with the DED as a professional entity; each partner retains unlimited personal liability.
- Dubai DET professional licence fees: AED 7,500-12,000 per year for most professional categories; commercial individual establishment fees: AED 10,000-15,000 per year.
- Expat professionals do not need a UAE national partner or Local Service Agent for a professional licence; however, they must hold a valid UAE residence visa and work permit in order to be the licensed professional.
UAE Sole Establishment: Legal Framework and Nationality Restrictions
A sole establishment in the UAE is a business owned and operated by a single individual who is personally and unlimitedly liable for all the establishment’s debts. There is no separation between the owner’s personal assets and the business assets; a creditor of the sole establishment can pursue the owner’s personal bank accounts, property, and other assets to satisfy a judgment.
Under UAE Commercial Companies Law and DED administrative policy, the Commercial Individual Establishment for trading, contracting, or industrial activities is reserved for UAE nationals and GCC nationals in certain contexts. A UAE national can register a commercial individual establishment under their own name, conducting general trading, contracting, or import/export activities with a commercial DET trade licence.
Expatriates (non-UAE nationals) are not permitted to hold a commercial individual establishment for trading activities. Instead, expatriates who wish to work independently can apply for a Professional Licence in their specific field of expertise including consulting, engineering, medicine, law, accounting, technology, design, and similar professional services. The Professional Licence is issued in the individual’s name and is tied to their professional qualifications and UAE residence visa status.
Professional Licence for Expatriates: Permitted Professions and Requirements
The UAE DED maintains an approved list of professional activities permitted under a Professional Licence. Broadly, these fall into the following categories:
- Management and business consulting (strategy, HR, marketing, financial advisory)
- Engineering and technical services (civil, structural, MEP, IT consulting)
- Healthcare professionals (doctors, dentists, pharmacists subject to Dubai Health Authority licensing)
- Legal services (practising lawyers must be UAE-qualified; foreign lawyers can advise on non-UAE law)
- Accounting and auditing (must be approved by the Accountants and Auditors Association)
- Creative services (graphic design, photography, video production, interior design)
- Educational and training services (subject to KHDA approval for training centres)
To obtain a Professional Licence in Dubai, an expatriate must: (1) hold a valid UAE residence visa; (2) provide educational qualification certificates attested by the UAE Ministry of Foreign Affairs; (3) secure DET initial approval listing the specific professional activity code; (4) provide a registered address (flexi-desk or physical office). A UAE national partner or Local Service Agent is not required for a Professional Licence.
Civil Company: Structure for Professional Partnerships
A civil company is formed when two or more professionals wish to practise together under a single entity. It is common among medical specialists sharing a clinic, law firm partners, accounting partnerships, and engineering consultancies. The civil company is not a commercial company under the CCL; it is governed by the UAE Civil Transactions Law (Federal Law No. 5 of 1985) and is registered with the DED as a professional entity rather than as an LLC.
Key characteristics of a UAE civil company: all partners are individually and jointly liable for the entity’s obligations (unlimited liability with joint and several recourse against partners personally); the entity must carry out only the professional activities of its partners; the partnership agreement governs profit-sharing, management authority, partner withdrawal, and dissolution terms; the agreement should be notarised at the UAE Notary Public for evidentiary strength.
A civil company can be formed between UAE nationals and expatriate professionals. All partners must individually hold valid Professional Licences or equivalent qualifications in the relevant profession. The company’s name must reference the names of the partners or the profession, not a fictitious trade name, though a trading-as name may be added for marketing purposes.
DET Registration Process for Professional Licence
Step 1 – Activity Selection: Identify the DET activity code for your profession. DET’s smart services portal lists all permitted professional activities with their codes. Some activities require prior approvals: doctors (Dubai Health Authority), pharmacists (DHA), engineers (Dubai Municipality Engineering Consultancy Section), lawyers (UAE Ministry of Justice).
Step 2 – Trade Name Reservation: For a professional licence, the name is typically the practitioner’s own full name or their name with a professional descriptor. Fee: AED 620.
Step 3 – Initial Approval: Submit qualifications, passport copy, visa copy, and activity description to DET. Fee: approximately AED 150. DET issues an initial approval letter within 3-5 business days.
Step 4 – Registered Address: Provide a commercial lease (Ejari) or approved flexi-desk address. Fee for Ejari: AED 155-220. Professional licence flexi-desk arrangements: AED 10,000-20,000 per year.
Step 5 – Licence Issuance: Submit all documents for DET professional licence. Annual fee: AED 7,500-12,000 depending on the activity category. The licence is valid for one year and must be renewed annually.
Sole Proprietorship vs LLC: Key Differences
| Feature | Professional Licence / Sole Establishment | Mainland LLC |
|---|---|---|
| Liability | Unlimited personal liability | Limited to share capital |
| Number of owners | One individual | 2-50 shareholders |
| MoA Notarisation | Not required | Required |
| Annual Licence Fee (Dubai) | AED 7,500-12,000 | AED 8,000-15,000 |
| Expat eligible | Yes (professional activities) | Yes (100% for most activities) |
| Hire employees | Yes (limited visa allocation) | Yes (based on office size) |
| Bid for government tenders | Limited (smaller tenders) | Yes |
| Corporate tax | 9% on business income above AED 375,000 | 9% on income above AED 375,000 |
Tax and Compliance for UAE Sole Proprietorships
Under Federal Decree-Law No. 47 of 2022 (UAE Corporate Tax Law), a natural person conducting business activity in the UAE through a sole establishment or Professional Licence is subject to corporate tax if their annual business turnover from that activity exceeds AED 1 million. The taxable income threshold of AED 375,000 (below which the 0% rate applies) and the 9% rate above it apply equally to natural persons with business income as to corporate entities.
A natural person’s employment income, investment income, and real estate income from personal property are excluded from the corporate tax calculation. Only income from the business activity conducted through the licensed establishment is in scope. Small Business Relief (Cabinet Decision No. 116 of 2022) is available to natural person businesses with revenue below AED 3 million, effectively reducing the tax liability to zero for qualifying periods.
VAT registration follows the same thresholds as for corporations: mandatory registration if taxable supplies exceed AED 375,000 per year; voluntary from AED 187,500. A sole establishment must maintain business accounting records separate from personal finances.
AED Cost Breakdown for UAE Professional Licence (Dubai, 2026)
- Trade name reservation: AED 620
- Initial approval: AED 150
- Professional licence fee (annual): AED 7,500-12,000
- Ejari / flexi-desk address (annual): AED 10,000-20,000
- Establishment card: AED 1,200
- Attestation of professional qualifications (if required): AED 500-1,500
- PRO and typing fees: AED 500-1,000
- Estimated first-year total: AED 20,000-36,000
A commercial Individual Establishment for a UAE national engaged in trading adds the cost of the trade licence (AED 10,000-15,000 vs the professional licence AED 7,500-12,000) and the notarised civil establishment deed where applicable. Annual renewal is primarily the licence fee and the flexi-desk or office lease.
Frequently Asked Questions
Can an expatriate hold a commercial sole establishment in the UAE?
No. Commercial Individual Establishments covering trading, import/export, and contracting activities are reserved for UAE nationals under DED policy. An expatriate wishing to trade commercially must either incorporate an LLC (where 100% foreign ownership is now permitted for most commercial activities) or operate through a free zone licence. For professional service activities such as consulting, engineering, medicine, and design, expatriates can hold a Professional Licence directly in their own name without requiring a UAE national partner.
Does a UAE sole proprietor need a Local Service Agent?
An expatriate holding a Professional Licence on the UAE mainland does not require a Local Service Agent. The LSA requirement applies specifically to branch offices of foreign companies. This is one reason the Professional Licence was simplified under post-2021 reforms, removing the LSA requirement and allowing direct registration by the professional, reducing both cost and complexity compared to earlier regulatory arrangements.
How is a civil company different from a general partnership?
A civil company is formed by professionals under the UAE Civil Transactions Law for the purpose of practising a profession together. A general partnership is a commercial entity under the CCL involving two or more partners jointly carrying out commercial activities, with all partners having unlimited joint and several liability. Civil companies are restricted to professional activities, are governed by civil law, and are registered as professional entities with DET; general partnerships are commercial entities registered under the CCL and can carry out trading and industrial activities.
Can a Professional Licence holder sponsor employees?
Yes. A Professional Licence holder in Dubai can sponsor employees under the establishment’s visa quota. The number of visas available depends on the registered office size; the standard DET allocation is one visa per 9 m2 of dedicated office space. For a flexi-desk address, the typically allocated visa quota is 1-3 visas, depending on the business centre’s arrangement with DET. An employee visa costs approximately AED 4,000-6,000 per person in government fees, medical testing, and Emirates ID issuance.
What happens to a Professional Licence if the practitioner leaves the UAE?
A Professional Licence is tied to the individual practitioner’s UAE residency visa. If the practitioner’s residence visa is cancelled or expires without renewal, the licence cannot be renewed and will lapse. Before leaving the UAE permanently, the licence holder must formally cancel the DET licence, settle all outstanding government fees and employee obligations, cancel any sponsored visas, and close any associated bank accounts. Failure to properly cancel a licence can result in outstanding government fee obligations accruing against the individual’s UAE civil record.