Dubai is a renowned business hub with many opportunities for new businesses to thrive in an ever-evolving dynamic business environment and exceptional trading opportunities.
Irrespective of whether you wish to open up a retail store, start a consultancy firm, or run an online business, the first and most important thing you need to do is to acquire a trade licence, to conduct business legally in the Emirate.
In this blog, we’ll get you up to speed on everything that you need to know about getting a trade licence in Dubai, from the various trade licence types according to your business model to the application process and the documentation needed.
What is a Trade License?
A trade licence is one of the official documents which is issued by the Department of Economic Development (DED) in Dubai (or Free Zone Authority), which authorises a particular individual or a company to engage in a certain business activity in the UAE. It guarantees your enterprise is within the legal structure set by the UAE government.
Irrespective of the business type, its size of operations and so on, every business needs to secure a trade license to legally operate in the UAE.
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Different Types of Trade Licenses
Dubai has a versatile licencing mechanism which allows for a wide range of commercial and professional undertakings. The following are the types of trade licences that you would have to apply depending on the nature of your business activity:
1. Commercial License
It is ideal for businesses which are dealing in buying, selling, or trading goods and commodities. Businesses involved in activities such as general trading, import-export, retail stores, wholesale shops, logistics and transportation need commercial trading licenses in Dubai.
Trading firms, e-commerce companies, automotive companies, and supermarkets are some of the popular businesses that prefer commercial licenses.
Benefits of Commercial License:
- Can combine several associated business activities under a single licence.
- Eligibility for warehouse facilities
- Suitable for both local and international trade.
2. Industrial License
An industrial license is mandatory for companies engaged in industrial or manufacturing business that involves the physical conversion of raw materials or components to finished goods.
Companies carrying out activities such as manufacturing garments, electronics, food products, packaging and assembly need to obtain an industrial licence in order to conduct their operations legally within the UAE.
3. Professional License
Service businesses and professionals who provide expertise and consultancy must obtain a professional license to carry out their business activities legally in Dubai.
A professional licence is perfect for freelancers, consultants, startups, and SMEs willing to gain access to Dubai’s service market while having complete control over their business. Another benefit of a professional licence is that it authorises 100% foreign ownership (with a Local Service Agent instead of a partner).
4. Tourism License
It is compulsory for firms conducting business in Dubai’s active travel and tourism industry. The pro-tourism policies as well as the Dubai Expo and Dubai Shopping Festival do their part in increasing businesses leading to more and more professionals venturing into the tourism industry. The Department of Tourism and Commerce Marketing (DTCM) regulates Tourism Licence.
Dubai Tourism Licence allows businesses to exploit one of the most visited tourist destinations in the world. Entrepreneurs aiming to capitalise on the growing hospitality and leisure business in UAE are keen on securing a Dubai Tourism Licence.
Types of Trade Licenses Based on Business Location
The regulatory structure of Dubai allows the formation of businesses in different jurisdictions, each with its own specific requirements, features, advantages and certain limitations. Here is a detailed breakdown;
1. Mainland License
The Dubai Department of Economic Development (DED) issues a Mainland business licence through which the business can operate in any part of the UAE as well as in the local markets.
A mainland licence also opens up avenues for businesses to government tenders as well as a very large local clientele. As well, with this licence, there is no restriction concerning the office location anywhere within Dubai.
2. Free Zone License
There are many different Free Zone Authorities such as DMCC, JAFZA, DAFZA, and Dubai Silicon Oasis. All these authorities are responsible for issuing licenses in their respective zones.
Businesses with a free zone license are typically limited to business within the Free Zone and international markets. And if these businesses want to trade in the UAE, they will need to use a local distributor.
Nevertheless, there are numerous advantages like full foreign ownership (without a need for a local UAE partner or agent). In addition, exemptions from taxes (corporate and personal), full repatriation of profits and capital, as well as simple procedures for customs are a few other bonuses.
3. Offshore License
An offshore licence is issued by offshore registries such as JAFZA Offshore, RAK ICC, and Ajman Offshore. This type of licence is specifically reserved for international business and they cannot operate in the local UAE markets.
An offshore licence is suited for investors looking to control foreign operations, hold intellectual property, or organise tax-efficient entities. A complete foreign ownership is permissible for business under offshore licensing without having to be physically present or require a visa sponsorship.
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How to Apply for a Trade License in Dubai?
The application process for a trade license in Dubai is long and complex involving many different steps. Here is a simplified breakdown of the process;
- Choose Your Business Activity – The first step is to select the specific business activity (or activities) your company will engage in. The DED provides a detailed list of more than 2000 permissible activities.
- Choose a Legal Structure – Next, you need to decide the company’s legal structure. Based on the business model, it could be a Sole Proprietorship, LLC, Civil Company, or Branch of a Foreign Company.
- Select a Trade Name – Select a distinctive name for your business in compliance with the UAE naming conventions. It cannot contain religious terms or words that might be considered offensive.
- Apply for Initial Approval – Obtain the initial approval of either the Dubai Department of Economic Development (DED) or Free Zone Authority, indicating that the UAE government has no objection regarding your business plan.
- Prepare MoA and Other Legal Documents – Prepare and notarize the Memorandum of Association (MoA), as well as other legal documents that may be needed depending on your business model. These documents describe the business’s structure and shareholder roles.
- Choose the Business Location – Rent a working space and secure a tenancy contract. Mainland businesses need to provide an Ejari (tenancy contract with the Real Estate Regulatory Authority).
- Submit Final Documents and Pay Fees – File all the relevant documents with the DED or the concerned Free Zone authorities and pay the applicable license issuance fees.
- Receive Your Trade License – Once your application is approved you will get your official trade license after that you can submit visa applications, open a bank account and start operating your business smoothly.
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Documents Needed to Obtain a Trade License in Dubai
The exact documentation needed will differ a little bit depending on the business type and its location. However, the following documents are generally required to be submitted;
- Passport copies of all shareholders/partners
- Visa copies or UAE entry stamp
- Emirates ID copy (if applicable)
- Trade name reservation certificate
- Initial approval certificate
- Memorandum of Association (MoA)
- Tenancy contract/Ejari
- Local service agent agreement (for professional licenses)
- External approvals (if required by specific authorities)
Note: These are general requirements. The exact documents needed will vary depending on the business type.
Conclusion
The process of acquiring a trade license in Dubai is a systematic process involving several important steps. Regardless of whether you are a startup founder, an international investor, or just a freelancer, there is a type of licensing available suited to your business model and activity.
You can smoothly set up and operate your business in one of the most economically vibrant countries and make use of the favourable business conditions around. All you need is to know the steps, comply with documentation requirements, and choose the right jurisdiction amongst other requirements.
Frequently Asked Questions
- How long does it take to get a trade license in Dubai?
The time taken depends on the type of license. Usually, it takes between 3-7 working days for mainland licenses and it may take anywhere between 2-4 weeks for Free Zone licenses.
- Can a foreigner own 100% of a business in Dubai?
Total foreign ownership is allowed, particularly in Free Zones and other mainland operations under the UAE’s updated Commercial Companies Law.
- Is a trade license renewable annually?
Yes. Renewal of trade licenses is to be done annually and it mainly involves tenancy contract renewal and payment of the license fee.
- Do I need a trade license to sell goods online in the UAE?
Yes, for online businesses, you will need to secure an e-commerce license. It will allow you to import, store and sell goods across various marketplaces in the UAE.