The United Arab Emirates is one of the most attractive countries in the world for entrepreneurs. Apart from the high standard of living, central location bridging East and West, tax-free financial climate for personal and corporate incomes, and a system of business-friendly laws and visa regulations, setting up a new company in Dubai will be rewarded with lucrative profits and access to global markets.
There are four main types of trade licenses available in Dubai and it is a legal requirement to hold one in order to do business in the United Arab Emirates (UAE). Initial approval is issued by the government’s Department of Economic Development (DED) in Dubai – and each Emirate has its own processes and procedures. Along with these Dubai trade licenses, the government offers business incentives and benefits to companies.
It is important to understand the different types of licenses for different business activities and how to apply for the appropriate license.
Four Types of Trade Licenses in Dubai, UAE:
Starting a business entity in Dubai, UAE requires a trade license applicable to the company type, industry, and business activity. This applies to foreign companies setting up business in Free Zones. These are the four most common Dubai trade license types available for Free Zone companies:
- Commercial License for general trading businesses
- Professional License for service-related businesses
- Industrial License for manufacturing goods
- Tourism License for travel and tours
1) Commercial License:
The Commercial License is also known as the general trading license or business license. It is the most widely applied for and issued trade license type in Dubai’s Free Zones. This license type applies to businesses involved in commercial activities and trade activities in Dubai and the UAE. These activities usually include importing products, export, and goods and commodities trading. The Commercial License serves as both regulation and protection for companies operating in Dubai’s Free Zones. This qualifies a company for various business support structures specific to industries such as startup incubators, banking support, as well as business-specific trade incentives.
The benefits of getting a Commercial License for business activities in Dubai means that:
- a license holder can perform up to ten commercial and trade activities under one Commercial License
- a business owner can select one of a variety of business company formation and registration types
- License holders can apply for residence visas for employees and company management on the Commercial License
- opening corporate bank accounts is easier with a Commercial License
- more cost-effective trade license renewals in the UAE
2) Professional License:
The Professional License has been devised for skilled professionals to conduct business in specific fields of expertise. This trade license type is aimed at service-oriented companies such as a business consultancy, operating management services, teaching and training, IT services, engineering skills, lawyers, mechanics, doctors and other medical and healthcare services, accounting and auditing service providers, and more.
The advantages of a Professional License are:
- fixed annual fees for business activities
- transparency details for clients for specific services and industries
- Professional License holders can apply for visas for employees
There are instances when service-oriented companies’ business activity may be considered suitable for both Commercial and Professional Licenses. Contact Trade License Zone‘s business setup experts to help guide you to select the best trade license type for your business and needs.
3) Industrial License:
The Industrial License is for businesses involved in the production and manufacturing of new products from natural or raw materials. This includes product manufacturing, food industries, textile manufacturing, engine and equipment manufacturing, and more. A prerequisite to qualify for this trade license type is that a company must operate from an office address such as a physical office space, physical warehouse or industrial complex within a Dubai Free Zone.
When the DED (Department of Economic Development) grants your Industrial License, you’ll also receive operational, tax, and customs privileges based on certain criteria:
- Your company produces goods destined for national consumption
- Your products may be exported outside the UAE to compete with foreign goods as new business
- The company is set up in specific industrial development zones
- The company uses local raw materials for manufacturing
- Your company positively impacts the UAE market
4) Tourism License:
The Tourism License enables businesses to operate in any of the tourism sectors in Dubai. The most popular types of tourism companies established in Dubai are outbound tour operators, inbound tour operators, and travel agents.
This trade license type is issued by the Department of Tourism and Commerce Marketing (DTCM) and Dubai’s DED.
Which Trade License is Best for your Business?
Trade licenses define the specific areas of operation of businesses. The Dubai economy is diverse and these regulations play a large part in growing the industries and businesses. These trade licenses control the industry, guide business processes, enable better business relationships in the market, and determine companies’ jurisdiction for transparency and better service for customers. To determine which of the four common types of trade licenses is most suitable for your business in Dubai, UAE, it is best to discuss your needs with a business formation specialist at Trade License Zone.
Steps to getting a Trade License in Dubai, UAE:
These are the necessary steps to apply for trade licenses in Dubai.
Step 1: Partner with Trade License Zone
Partnering with a local company setup agency such as Trade License Zone is the first step to opening any type of business in Dubai, UAE. To benefit from the legal structures of operating with a trade license, you will need to follow a strict business structure and formation regulations. Our specialists at Trade License Zone will manage all aspects of your company formation process and guide you on the various governmental and municipal trade regulations for operating in the UAE.
Step 2: Choose a Business Structure
Free Zones are a Dubai innovation that creates special economic zones for dedicated industries. The different Free Zones offer various benefits, such as tax incentives and business support services designed for each industry. Free Zones not only offer trade licenses to businesses but also access to first-class infrastructure, business clients, skilled workers, and a high volume of customers.
Step 3: Choosing and Registering a Business Name
Trade License Zone will help you select the right name for your business. According to the Registry Office, the business name may not include any offensive or blasphemous language, nor any references to Islam or Allah. You can include your name in your company name, but you must use it in full rather than just your surname or initials. We’ll then check if the name is available to be registered.
Step 4: Notarize your Company’s Documents
During the application process for your company and visa, you’ll also need to apply for the notarization of your company’s documents. Once the Registry Office has approved your company’s name, you can have the business’ Memorandum of Association (MOA) and Articles of Association (AOA) notarized with the Dubai Department of Economic Development (DED).
Step 5: Submit your Business License Application
Once your documents are notarized and your application forms are completed, we will submit them along with your business plan to the Department of Economic Development (DED) in Dubai (and the Department of Tourism and Commerce Marketing for Tourism Licenses). The list of documents required for a successful approval are:
- Proof of ID and address for directors and shareholders
- Passport copies for shareholders and directors
- Copy of trade name confirmation from the Registry Office
- Copy of license application forms
- Proof of initial activity approval from Dubai’s management agencies
- Notarized Memorandum of Association (MOA)
- Notarized Articles of Association (AOA)
- Copy of the lease or property agreement of the company’s physical address
- Payment for specific trade license
Step 6: Getting your Trade License
Once approved, the DED will issue your company with a relevant trade license. This process usually takes 2 weeks, but because of the limitations of COVID-19 restrictions, this may take up to 4 weeks.
Trade License Renewal Process in Dubai, UAE:
All trade licenses must be renewed annually by the DED in Dubai, UAE. This requires the trade license holder to obtain the necessary approvals and authorizations from relevant governmental and municipal agencies. The documents needed are a renewal form, tenancy contract, authorizations and approvals, and ID and photocopies of shareholders and directors.
Starting a business of your own is the quickest way to get a visa in Dubai, UAE. Using one of the four types of trade licenses highlighted in this article will ensure that you start your business with the right structure in the UAE. Partnering with a company formation specialist such as Trade License Zone will enable you to get started without delays.
That’s why it’s always advisable to sign up for the services of a UAE business setup company to guide you on your company’s license and setup based on your needs and budget.
When you work with Trade License Zone’s professional consultants, we’ll guide and manage the entire incorporation process for you, and guide you through the latest government regulations regarding your trade license application and business needs. Get in touch today for a personalised quote and competitive advantage.
We’ll give you peace of mind that your trade license and visa applications are free from errors and omissions – both of which can lead to delays and rejection.
All you need to provide is some basic documentation and some information about your company. Then, sit back and let the experts take care of the rest – managing your license and visa applications, communicating with all relevant government departments and authorities, and reporting back when you’re ready to trade. It is that simple.