The UAE continues to attract entrepreneurs and investors from all across the world. Its business-friendly landscape, coupled with a superb geographical location and attractive tax incentives, is a magnet for global talent. While there are many benefits to starting a multi-shareholder business such as an LLC, an increasing number of entrepreneurs choose to fly solo. An one person company (OPC) provides a streamlined way to legally operate a business in the UAE while retaining full ownership and operation control. Allow us to walk you through the ins and outs of an OPC and provide you with the necessary steps on how to set up your own one-person company in the UAE.
What is a one-person company in the UAE?
A one-person company (OPC) is an innovative business structure that makes it possible for one person to both start and manage a business completely on their own. As the owner of an OPC you can enjoy a combination of some of the biggest advantages of other business structures, like the protection of a Limited Liability Company (LLC) and the flexibility of a sole proprietorship. You will also have 100% control over your business and be faced with fewer risks and reduced personal liability.
Despite some similarities, there are also many ways in which it differs from a traditional LLC. While an LLC generally requires multiple shareholders, a single person can own and run an OPC. This makes it a great choice for prospective business owners that want to enjoy some of the many attractive benefits of an LLC without having to deal with additional partners or investors. When compared to a sole proprietorship, on the other hand, an OPC boasts a more defined corporate structure, offers more legal protection, and typically enjoys improved credibility among clients, regulators, and banks.
How to set up a one-person company in the UAE
There are certain steps that need to be followed when setting up an OPC in the UAE. Here are the most important ones:
Step 1: Pick a jurisdiction
When you start a business in the UAE, the first thing you need to do is choose the most suitable jurisdiction. Weigh up the benefits and drawbacks of establishing your business in both mainland and free zones. Consider things like the market you want to serve and your available setup capital before making a decision.
Step 2: Define your business activity and reserve a trade name
The next step is very important and involves you defining your business activity. Take your time to weigh up your options before deciding what type of business you want to start. Once you are confident in your choice, look for your business activity on the DED list. Your chosen business activity will have a direct impact on your licensing requirements. You also need to pick a suitable name for your business. Make sure it aligns with your purpose and that it complies with all rules and regulations, including being free of offensive and religious terminology.
Step 3: Apply for initial approval
You need to submit your application for initial approval regardless of where you establish your business. You will submit it to the DED for a mainland business and to the relevant authority if you have chosen to establish a free zone business.
Step 4: Examine the competitor landscape
Always keep an eye on your competitors when setting up your OPC. Have a look at which of your competitors rank on page 1 of search engines such as Google and Yahoo and examine their product/service offers, pricing, and approach to client service. This will make it easier for you to identify gaps in the market and craft a solid pricing and marketing strategy for yourself.
Step 5: Sign a lease agreement and apply for your license
If your business requires a physical space to operate from, you will need a lease agreement in place before submitting your documents for final approval. If you require a physical mainland office you will need to submit your Ejari lease agreement. Free zone lease agreements are issued by the relevant authority. Once you have this in place, you will submit it together with your initial approval and other required documents for final approval. After your license is issued you can start to operate your business legally in the UAE.
Step 6: Complete any post-licensing formalities
Establishing your OPC does not end when you receive your license. There are still a number of post-licensing formalities you need to take care of. This includes opening a corporate bank account, registering for taxes and VAT as required and obtaining any visas that may be needed. Also ensure that you remain compliant with any ongoing regulations. Failure to do so may result in severe penalties.
Legal requirements and eligibility to start an OPC
UAE nationals, GCC nationals, and foreign residents can all establish an OPC in the UAE. Specific eligibility does, however, apply to each group.
UAE nationals: No restrictions to establishing and running an OPC in the UAE.
Foreign nationals: Non-GCC foreign nationals may not be able to form a mainland OPC on their own but can set up in a free zone. Each free zone has its own regulations with regards to foreign ownership.
GCC nationals: Can generally enjoy the same benefits as UAE nationals, including 100% ownership and minimal restrictions.
The legal authorities that oversee OPCs depend on the jurisdiction.
Mainland: The DED regulates OPC formation, approves trade names, and issues licenses.
Free zones: For OPCs in free zones, the relevant authority governs registration, licensing, and permitted business activities.
Mainland vs free zone: Best option for one-person companies
When you start an OPC in the UAE, it is important to choose the right jurisdiction. Your choice will impact everything from licensing and taxes to market access and growth potential.
Let’s have a closer look at the two main jurisdictions in the UAE:
Mainland: If you establish a mainland business you will be allowed to conduct your business across the entire UAE without any restrictions. As a mainland business owner you will also be able to bid for lucrative government contracts. If you plan to grow your business very fast, consider setting it up on the mainland.
Free zone: Generally cheaper for business setups than mainland, advantages include affordable setups, tax incentives, and swift visa application processes. Good for international and online businesses.
If you plan to mainly serve an international market and want a cost-effective, simple setup, a free zone may be your best option. Mainland may be a better choice if you want full access to the local market and have the option to conduct business with government entities.
Documents required to register your OPC in the UAE
You need to compile and submit a range of documents when registering your OPC in the UAE.
Here is a list of the most common documents you will require:
• Business application form
- Copy of your identification document/passport
• Details of local sponsor (where applicable)
• Lease agreement (where applicable)
• Digital signature certificate (DSC) for signing incorporation documents electronically.
• Company formation documents (Memorandum of Association and Articles of Association)
• Director’s declaration and consent
How much does it cost to set up a one-person company in the UAE?
It is not possible to say exactly how much it will cost to set up your OPC as the total cost can be influenced by many key factors such as the following:
Jurisdiction – The cost between setting up an OPC on the mainland differs from setting up a business in a free zone. Free zone businesses are usually cheaper to establish.
License type – the business activity you selected will directly determine what licensing is required to legally operate your OPC.
Office space – shared workspaces and virtual offices are cheaper than physical offices.
Visas – this is determined by how many visas you may need for yourself and any possible staff
Additional services – this includes company registration fees and administrative charges.
Generally, setup can cost anywhere from AED 10,000 to AED 30,000.
Frequently asked questions
What is LLC OPC in the UAE?
An LLC OPC (One Person Company) is a legal structure that allows a single owner to establish a company with limited liability. It provides full control while protecting personal assets from business debts.
Can you own 100% of a company in the UAE?
Yes, you can fully own a company in a UAE free zone, and certain mainland businesses now allow 100% foreign ownership depending on the sector. Full ownership gives you complete control over operations and profits.
Can a single person make a company?
Yes. The structure of an OPC makes it possible for a single person to establish and run a business in the UAE. They will be the sole owner and have full control over all aspects of the business.
About Set Hub
For more than a decade, business owners from across the world have made Set Hub their business consultancy of choice. We are a passionate, multi-lingual team that has helped more than 25,000 clients turn their business dreams into a reality. We know that starting a new business can be overwhelming and we are eager and equipped to help you every step of the way. Reach out to us today to help you with your one-person company set up in the UAE, including licensing and long-term business support.