Total Setup Cost
AED 21,000
Annual Renewal
AED 12,000
| Emirate | License | Total Setup | Renewal |
|---|---|---|---|
| Dubai | AED 12,000 | AED 21,000 | AED 12,000 |
| Abu Dhabi | AED 10,000 | AED 19,000 | AED 10,000 |
| Sharjah | AED 8,000 | AED 16,500 | AED 8,000 |
| Ajman | AED 7,000 | AED 15,500 | AED 7,000 |
| Umm Al Quwain | AED 6,500 | AED 14,700 | AED 6,500 |
| Ras Al Khaimah | AED 7,500 | AED 16,000 | AED 7,500 |
| Fujairah | AED 7,000 | AED 15,200 | AED 7,000 |
What is a sole establishment?
A sole establishment (also known as a sole proprietorship) is a mainland business entity owned by one person. It allows you to operate anywhere in the UAE, take on government contracts, and hire employees. Unlike free zone companies, there are no restrictions on trading within the UAE market.
Which emirate is cheapest?
Umm Al Quwain and Fujairah typically offer the lowest license fees (AED 6,500-7,000), while Dubai (AED 12,000) and Abu Dhabi (AED 10,000) are more expensive. However, being registered in Dubai or Abu Dhabi can provide greater business credibility and access to clients.
Do I need a local sponsor?
Since the 2021 Commercial Companies Law amendment, foreign nationals can own 100% of mainland businesses in most activities without requiring a local sponsor or service agent. Some activities classified as strategic may still require Emirati partnership. Check the DED website for the latest list of permitted activities.
Note: Costs are approximate and may vary based on activity type. Additional costs may include office space, Ejari, and trade name reservation fees.
How a sole establishment (mu'assasat fardiyya) works on the UAE mainland
What is a sole establishment in the UAE?
A sole establishment (mu'assasat fardiyya in Arabic) is a business owned by one person that operates on the UAE mainland. Unlike a free zone company, it allows you to trade anywhere in the UAE and take on government contracts. The owner has full control and keeps all the profits, but also bears unlimited personal liability.
Do I need a local sponsor for a sole establishment?
Since the 2021 commercial law reforms, most business activities no longer require a local Emirati partner or sponsor. Foreign nationals can now own 100% of a mainland sole establishment in most sectors. However, some activities like oil and gas, defence, and banking may still require local ownership. Check the DED (Department of Economic Development) in your emirate.
How much does it cost to set up?
The typical cost ranges from AED 15,000 to AED 50,000 depending on the emirate and activity type. This covers the trade licence (AED 5,000 to AED 15,000), office lease (Ejari registration is mandatory, starting from AED 10,000 per year), and government fees. You also need to budget for a visa (AED 3,000 to AED 5,000) and health insurance.
What are the advantages over a free zone company?
A sole establishment can trade directly with any UAE customer without needing a distributor. You can take on government contracts and tenders. You can open a business anywhere in the emirate without being restricted to a free zone area. The licence also covers a wider range of activities compared to most free zone permits.
Does a sole establishment pay corporate tax?
Yes. Since June 2023, sole establishments with taxable profits above AED 375,000 per year are subject to 9% corporate tax. The first AED 375,000 is taxed at 0%. You must register with the FTA (Federal Tax Authority), keep proper accounts, and file annual tax returns. Small businesses can elect for simplified small business relief.
Do I need to register for VAT?
If your taxable supplies exceed AED 375,000 in a 12-month period, you must register for VAT and charge 5% on your sales. Voluntary registration is possible if supplies or expenses exceed AED 187,500. Once registered, you file quarterly returns with the FTA and can reclaim VAT paid on business expenses.
What records must I keep?
You must keep all financial records, invoices, receipts, bank statements, and contracts for at least 5 years. The FTA can audit your records at any time. Many sole establishment owners use accounting software like Zoho Books or QuickBooks to stay organised. Hiring a bookkeeper (AED 500 to AED 2,000 per month) is common for businesses with regular transactions.
FTA-Aligned: Based on 2025 FTA rates and regulations. For personal advice, speak to a qualified tax consultant.
Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms