Business setup in Dubai is a good idea due to its strategic location and growing business environment. Moreover, Dubai International Free Zone Authority (IFZA) says that the registrations of business licenses in the first quarter of 2023 are 177% higher than in 2022.
But before starting your business in the UAE, you need a trade license, which is mandatory for specific business activity.
So, in this guide, we’ll cover the trade license types in Dubai, how to apply for them, and which one is best for your business activities in the UAE.
What Is A Trade or Business License in Dubai?
A Dubai trade license defines what kind of business a company can do, whether commercial, industrial or professional services.
Moreover, it is issued by the Department of Economic Development or other relevant authorities in the UAE, such as the Dubai Free Zone or Sharjah Free Zone.
4 Different Types of Trade License in Dubai, UAE
In Dubai, UAE, opening a business entity requires obtaining a trade license that suits the company type, business and activity. Foreign companies might constitute business in Free Zones. These are the 4 main types of trade license in Dubai:
1) Commercial License
The business or general trading license is also known as commercial trade license. Dubai’s Free Zones have the most widely applied for and issued license for commercial activities. The license type is applicable for business trading or commercial business activities in Dubai and UAE. Importing products, exporting goods, and trading commodities are different types of trade activities.
Commercial License in Dubai is a regulation and protection for the companies working in free zones. A company qualifies for such business support structures as banks and business industry-specific trade incentives as an effect of this.
Benefits of Commercial License
A Commercial License in Dubai allows the following:
- One Commercial License will allow a license holder to perform up to ten commercial and trade activities.
- A business owner can choose from various business company formations in Dubai and registration types.
- Commercial license holders can apply for employee and company management residence visas.
- With a Commercial License, it is easier to open corporate bank accounts.
2) Professional License
It is designed for skilled professionals as a business permit, enabling the permission of doing work in particular fields of specialisation. This type of license is required for service-oriented companies like:
- Business consultancy
- Operating management services
- Teaching and training services
- IT services
- Engineering skills
- Lawyers
- Mechanics
- Doctors
- Other medical and healthcare services
- Accounting and auditing service providers
Benefits
The advantages of a professional trade license in Dubai are:
- Fixed per annum fees for conducting business.
- Specific services and industries that offer transparency details for clients.
- Visas can be applied for employees by the Professional License holders.
If you’re confused about choosing a commercial or professional license in Dubai for your business activities, contact Xpert Advisory. Our expert assistance will help you choose the best trade license for your specific business and needs.
3) Industrial License
The industrial license is for businesses involved in producing and manufacturing new products from natural or raw materials. Product manufacturing, food industries, textile, engine and equipment manufacturing, and more are included. To establish a business premises, such as a physical office, warehouse, or production facility within a Dubai Free Zone, are a prerequisite to qualify for this trade license type.
When the DED grants your Industrial License, you’ll also receive operational, tax, and customs privileges based on certain criteria:
- Your products will be used within the country.
- As a new company, your products may be exported outside UAE to compete with foreign goods.
- Specific industrial development zones are the business location.
- Manufacturing is done with local raw materials.
- You can set up a business and contribute your products or services in the Dubai market.
4) Tourism License
Dubai Tourism License license is required for businesses to carry on any of the tourism sectors in Dubai. This license allows them to do jobs in established tourism companies in Dubai as outbound tour operators, inbound tour operators and travel agents. The Department of Tourism and Commerce Marketing and Dubai’s DED issued this trade license.
Requirements for a Mainland Trade License in Dubai
- In-country sponsor: Dubai mainland business needs an Emirati national or a local sponsor with 51% ownership of the company and the rest, 49%, to foreigners or their affiliates.
- Government clearances: To be involved in economics, research, or other activities, a business on the mainland must attain routine government clearances from the Department of Economic Development (DED), the Labor Ministry, and the Ministry of Immigration.
- Specific approvals: According to their business, you may need to provide approvals from authorities such as an educational license from the Knowledge and Human Development Authority (KHDA) or a medical license from the Dubai Health Authority (DHA).
- Registration and licensing: Main businesses found in Dubai are licensed by the Dubai Department of economic Development.
- Compliance with commercial regulations: Commercial regulation applied by the DED is enforced on the mainland companies and consumer protection law.
Requirements for a Free Zone Trade Dubai Trade License
- Select a free zone: Based on your business requirements and preferences, choose the free zone in Dubai.
- Application process: Setting up a free zone company is normally simple. However, depending on the nature of the free zone, it may be necessary to follow several specific steps and requirements. These requirements may vary from free zone to free zone, as well as the type of nature of the business activity and the kind of free zone laws and regulations.
- Documentation: If investing in a free zone, you need to provide proof of passport, proof of business registration. Additionally, any other required documents may be demanded by the selected free zone authority according to the nature of your business.
- Benefits from free zone: Advantages of a business license in Dubai free zone include:
- Complete ownership rights
- Access to world-class infrastructure
- Protection of assets
- Tax benefits
- Opportunity to conduct business locally and away from UAE.
How to Obtain a Trade License In Dubai, UAE?
Follow these steps to get different types of business licenses in Dubai, UAE:
Step 1: Collaborate With Xpert Advisory
The first step in opening any particular type of business in Dubai is to partner with a leading consulting company, such as Xpert Advisory. Our specialists will oversee corporate formation and instruct you on all UAE governmental and municipal trade regulations.
Step 2: Choose a Structure for Business Setup
Innovation, like Free Zones in Dubai, offers special economic zones for specific industries. The benefits of each Free Zone are different as each Industry is different, with tax incentives or business support services. Free Zones provide businesses with trade licenses for different business activities and access to first-class infrastructure, business clients, workers, and many customers.
Step 3: Registration of a Name of the Business
Select a perfect name for your business to get a trade license. The Registry Office says the business name can have nothing offensive or blasphemous attached to it, nor can it contain any references to Islam or Allah. You can have your name in your company name, but you must use it in full – not just a surname or initials.
Step 4: Your Company’s Documents Notarized
While applying for your company and visa, you will apply for the notarization of the company’s documents. After the Company’s name gets approved by the Registry Office, you can have the business’ Memorandum of Association (MOA) and Articles of Association (AOA) notarised with the DED.
Step 5: Complete Your Business License Application
Upon completing your trade license application forms and notarizing your documents, Xpert Advisory will help you submit your business plan and test, along with all the necessary paperwork, to the Department of Economic Development (DED) in Dubai. The following documents are required for successful approval of licenses available in Dubai:
- Proof of directors and shareholders’ ID and address
- The shareholder and directors’ passport copies
- Trade name confirmation from the Registry Office, copy.
- License application forms copied
- Dubai’s management agencies have given proof of approval for initial activity.
- Memorandum of Association (MOA), notarized.
- Articles of association, with notarized attestations.
- Lease or property agreement copy of the physical address of the company
- Specific trade license payment
Step 6: Getting Your Trade License
Your company will be given the relevant trade license once approved. The process usually takes 2 – 4 weeks.
Final Words
When you want to start your new business in Dubai, you have to follow local laws to obtain a trade license. Dubai offers you 4 trade license types in Dubai. Choose which fits you best depending on your business and experience the best trading in the most thriving country.
Need help in trade license renewals process from UAE ministry? Xpert Advisory offers hassle-free and cost-efficient solutions to get an appropriate license to set up your business in Dubai.
FAQs
What Are the Trade License Fees In Dubai?
Trade license fees in Dubai vary around 10,000 and 50,000 AED*. However, this price may differ based on your location and business type within the UAE.
How Long Does A Trade License Validity In Dubai Last?
In Dubai, a trade license is valid for one year after issuance. It must be renewed annually after this period and is valid.
Where Can I Apply For My E-Trader License In Dubai?
First, register on the DED Trader portal and create an account to complete the required details. Next, provide the necessary docs like passport copies and proof of residence. Then, pay the fee for the E-Trader license. After processing the application, you can get an E-Trader license.
How Much Investment Is Required to Start Business Activities In Dubai?
You need around AED 30,000* to 50,000* to start a mainland business. However, you need a much lesser investment of around AED 10,000* in free zones.
