Getting the right license is among the most important and first things to do when you start a business in Dubai. You need a commercial license to engage in the UAE market. Moreover, a commercial license is important, whether you are selling goods locally, importing or exporting or conducting general trade activities in Dubai. So, in this guide, we’ll discuss what is commercial license in Dubai, including the license types, their benefits, how to apply, their costs and tips for renewing them.
What Does Commercial License Mean in Dubai?
A commercial License allows the investor to run any commercial business within the UAE. Trading goods and services is involved in commercial activities. Among the things covered are foodstuffs, construction supplies, chemicals, toys, fabrics, furniture and other goods.
So, if you are a Dubai resident and investor, you must get a commercial trade license for business setup in Dubai mainland or free zone. Basically, companies in the UAE can operate from two business jurisdictions and take part in almost any commercial activity. Dubai’s commercial license is only available on the mainland and in the free zone.
With a commercial trade license in Dubai, you can engage in many activities. However, investors should verify the activities under a commercial license through the chosen jurisdiction.
Why is Obtaining a Commercial License Important for Dubai’s Traders?
Now you know what is commercial license in Dubai, let’s explore why having a Dubai commercial license is essential for business support:
1. Legal Approval to Work: A commercial license helps your business operate by letting you trade goods and services across the UAE and other countries.
2. Wide Variety of Activities: It applies to common business activities such as general trading, retail, logistics, construction material trading and so on, allowing you to try new operations.
3. Access to Local and International:A Dubai commercial license lets you trade anywhere in the UAE and establish links with companies from different nations.
4. Set the Right Business Incorporation:You can start your business in Dubai free zone, mainland, or offshore, based on what you wish to accomplish and where you want to serve.
5. Tax Advantages: Dubai offers trading business services with the benefit of 0% personal and corporate income tax.
6. Trust in Your Brand:Having a business registered and licensed in Dubai improves your reputation and builds trust among customers, suppliers and partners.
Activities Covered By a Commercial License
A commercial license in Dubai typically allows companies to work in different areas, as the Dubai Department of Economic Development (DED) issues them for mainland firms and free zone authorities issue them for companies in free zones. The following are a wide range of business activities that are allowed under a commercial license:
- The sale and purchase of electronics, textiles or machinery across countries in trade.
- Trading happens between businesses across the country and the globe.
- Distributing products in the UAE as well as other countries.
- Real estate and financial brokerages.
- Offerings in logistics and warehousing.
- Managing real estate includes leasing and selling property.
- Dealing with electronics, technology, and software trading.
- The exchange of construction materials and equipment.
- The business of buying and selling food and drinks.
Different Types of Commercial Licenses Offered in Dubai and the UAE
In Dubai, your business type determines the primary categories for licenses issued. The type of licenses issued for trading are as follows:
- Professional License: For any people or groups that provide consulting, legal services, education or artisanship.
- Industrial License:Companies manufacturing products, carrying out industrial processes, or building machinery should rely on such insurance.
- Tourism License: Travel agencies, hotels, tour operators and other services in the tourism industry can use it.
- Agricultural License: This is for businesses involved in agricultural work, such as farming, fishing, and breeding livestock.
- Crafts License:If you are skilled in carpentry, plumbing or electrical work, this finance program will be helpful.
Documents Required for a Commercial License in Dubai
To apply for a commercial license in Dubai, you have to provide these documents:
- Copies of the passports for all shareholders and partners
- Visa copies for all entry types or a UAE entry stamp for those travelling from outside the UAE
- An Emirates ID copy, provided you have one (if needed).
- Reservation certificate for a trade name
- A certificate from DED that approves your idea is the first stage.
- A letter called a Memorandum of Association or something with a Local Service Agent agreement, signed by the company and a notary
- An agreement called Ejari must be made for the business location.
- Sponsor’s consent or No Objection Certificate (NOC) if they are involved
- Rightly and fully completed form for obtaining a commercial license
- External approvals (only required if the business activity calls for specific authorisation).
- Once verification is complete, the DED will send you the mainland commercial license.
How Can You Apply for a Commercial License in Dubai, UAE?
A business must obtain a license to trade anything in Dubai lawfully. Here’s the easiest way to get your commercial business license in Dubai:
- Choose Business Activities:Pick up to 10 allowed activities for your commercial license, confirming they are permitted under the regulations of DED or free zones.
- Select the Legal Structure: Depending on how you want to run your business and the nature of the business, you can choose an LLC, sole proprietorship or a free zone company.
- Select and Register a Trade Name:Choose a business name following UAE rules and ensure it does not include forbidden words, via the DED or free zone authorities.
- File an Application for Initial Approval: Send your application to the DED or free zone authority and wait for preliminary approval, ensuring your company meets all the UAE rules.
- Sign the Memorandum of Association (MoA): When creating an LLC, make and notarise the MoA to explain the roles and holdings of all shareholders.
- Secure Required Approvals: You must obtain extra authorisation from the right officials for some business operations.
- Book an Office:Lease an office and include your rental agreement and all necessary documents to complete the application for your desired license.
Cost of a Commercial Trade License
It relies on the activities covered by a commercial license, the company structure, and where it operates. In most cases, the fees pay for:
The license application fees are based on your business and whether you register on the mainland or in a free zone.
- Expenses for office rent, visas and other required administration are considered additional costs.
The average estimate for building an application begins at AED 6,000*. However, if you want an e-trader license, expect to pay around 1,100 AED*.
Renewal Process for a Commercial License
Follow these main steps to make the renewal process for a commercial license in UAE easier:
- Apply to Renew Your License
You may register for a license online using the DED portal or get the service from an approved service centre.
- Provide Required Paperwork
The requirements include the current trade license, Ejari office lease, and relevant authority approvals for certain company activities.
- Pay for Renewal
Renewal prices are set according to the business’s activities and office location. Renewing an employment visa usually costs between AED 8,000* and AED 15,000*.
- Get Your License Renewed
After your renewal and fee payment, a renewed license will be issued by DED, so you can keep your business running legally in Dubai and the UAE for another year.
Final Words
Understanding what is commercial license in Dubai can help you open new doors for business in the UAE. It allows businesses to function legally while giving them access to local and international markets, tax perks and a confident reputation. Moreover, understanding the licenses, the necessary documents, and the procedures for getting and renewing them will help you easily run a prosperous trade business in Dubai.
However, sometimes managing the process of getting a commercial license is tricky. Therefore, hire Xpert Advisory when applying for license approval. We also help you pick the legal structure, create essential documents, secure necessary permits and open a bank account. So, connect with us today and begin the journey of getting your commercial license in Dubai.
FAQs
Is it Possible to Get a Commercial License in Dubai Without an Office?
No. A commercial license in Dubai mainland is only granted if you have office space and an Ejari contract. Yet, several Free Zones permit Flexi-desks and virtual offices, meaning you can have the space you need for less.
Can I Handle More than One Business Activity With a Single Commercial License?
Yes, as long as they are related, a commercial license may permit several business operations. However, each activity you perform should be from the same license group and approved by the right authority.
What Happens If You Start a Business Setup Without a Dubai Commercial License?
If you open a business without submitting your commercial license application in Dubai, you may be heavily fined, from AED 5,000* to AED 50,000*. In case of continued offences or unpaid fines, the licensing authority could temporarily withhold or permanently cancel your license.
