Foreign investors starting any type of business in Dubai – UAE must pay attention to the requirements of the Company Law which provides for all the steps one must complete in order to have a company up and running. One must also pay attention to the business license they need to operate in UAE, as this reflects the operations the business will carry out. A Dubai company may apply for one of the following licenses:
- the trade license, also known as the commercial license;
- the industrial license;
- the professional license.
Our company formation representatives in Dubai can offer complete information about each type of business license required in UAE. We can also assist with the registration of a company in Dubai which implies obtaining a trade license, where such permit is necessary.
What is a Dubai trade license?
Obtaining a business license is perhaps the most important part after setting up the company in Dubai. The most employed type of business permit is the trade license, also referred to as the commercial license and which designates most of the activities that can be carried out across the UAE. The trade license is issued by the Department of Economic Development (DED) in Dubai.
Also known as a general trading license, this business permit can be used for the following activities:
- for the import and export of goods, and it is usually requested by trading companies registered in Dubai;
- for carrying out various types of commercial activities, such as the sale of goods and services in Dubai;
- the general trade license can also be obtained by companies registered in Dubai free zones;
- the trade license can also be obtained by professionals offering services in a specific industry.
Our company registration consultants in Dubai can offer more information on the uses of a trade license in UAE and how to apply for one based on the industry you plan on operating in. Here is a video presentation that might help you:
How to obtain a trade license in Dubai?
In order to obtain a trade license, the incorporation documents of the company must provide for the activity of the company which must be related to the trading field. It is also important to notice, that most activities in Dubai and generally in UAE can be completed under a general trade license.
In order to obtain the trade license for one’s company in Dubai, one must first select a trade name, have the Memorandum and Articles of Association prepared and then filed with the DED for initial approval. One must also have a rental agreement as proof of the registered address of the Dubai company. Then the application for the trade license can be filed.
The professional trade license in Dubai
The professional trade license is a special business permit and is usually issued in one of the following industries:
- accounting and finances;
The professional trade license comes with many advantages, among which the fact that it can be obtained by sole proprietors in Dubai. It also grants the right to full foreign ownership when obtained by a sole trader. It must be noted though that the foreign citizen applying for a trade license must first become a resident of Dubai in order to have full foreign ownership over the sole proprietorship.
Our Dubai company formation advisors can offer more information on how to apply for a professional trade license in this city-state or in one of its free zones or in another emirate from UAE.
The trade license in a Dubai free zone
The requirements applicable to those opening companies in mainland in Dubai also apply to those setting up companies in free zones in the city-state and seeking to obtain a general or professional trade license.
The trade license, when applied for in a Dubai free zone, will be issued by the authority of the respective free zone. The particularity of the trading license issued to a free zone company is that it can only be used for completing trading or commercial activities in the respective free zone. Nevertheless, free zones companies come with many advantages and our company formation experts in Dubai can also help foreign investors who want to register free zone companies with full foreign ownership.
Advantages of obtaining a trade license in Dubai
Foreign investors opening companies in Dubai have several licensing options when starting a business in this Emirate. The trade license comes with many advantages compared to other licenses, among which the fact that it is quite easy and fast to obtain, the paperwork requirements being relatively reduced. The general trade license is usually issued within 5 working days.
Another advantage of the Dubai trade license is that it is one of the cheapest, the usual fee for such a license ranging between 30,000 and 40,000 AED, depending on several aspects which need to be considered. Also, the trade license allows local companies to enter into national and international trading activities.
A less known advantage of the trade license is that it permits the establishment of holding companies in Dubai. In other words, foreign investors interested in setting up holding companies in Dubai can obtain a trade license for this purpose.
Our Dubai company formation representatives can help foreign investors who want to set up holding companies here or in another emirate in UAE.
Documents related to obtaining a Dubai trade license
The following documents must be presented to the Trade License and Commercial Registration Department within the DED when applying for a trade license in Dubai:
- a standard application form which must be filled out and signed by the company’s legal representative;
- the company’s statutory documents, both in original and copy;
- the DED’s letter with the approval of the company name;
- the DED’s letter attesting the approval for setting up the company;
- the tenancy agreement;
- all shareholders’ details (copies after their passports).
One must also pay attention if any other special licenses are required.
Commercial license for LLCs
A commercial license for a limited liability company in Dubai is issued if the UAE national owns 51% of the business while the foreign investor owns 49%. We remind you that the Department of Economic Development issues the commercial licenses in Dubai. Assistance and guidance throughout the entire process can be offered by one of our company incorporation agents in Dubai. If you would like to establish a branch or a subsidiary in Dubai, you can discuss with one of our agents and ask for support. Also, if you want accounting services for your company in Dubai, feel free to address your inquiries to our experts right away.
The general trading license in Dubai
The general trading license in Dubai can be issued for companies dealing with import and export affairs. Goods like electronics, foodstuff, textiles, furniture, or equipment can be traded by a company in Dubai. This means that one should establish an import and export company for which a general trading license is issued by DED. It is important to note that such a license cannot be issued for companies with import and export activities dealing with cars, medicine, chemicals, or alcohol. There are specific conditions to meet in this direction and approvals to obtain from particular governmental and municipal authorities. The tenancy contract attested by Ejari plus the Memorandum of Association is among the necessary documents for a trading license in Dubai. DED will verify the license applications and issue the documents you need for your firm in Dubai. We have a dedicated team of specialists in company formation who will help entrepreneurs obtain the proper business license in Dubai.
FAQ on the trade license in Dubai
Here are some of the most frequently asked questions on the Dubai trade license:
1. Can I obtain a trade license in Dubai even if I am a foreigner?
Yes, foreign investors can also obtain trade licenses in Dubai provided that they register companies here.
2. Do I need a trade license for each category of goods if my company sells various products in Dubai?
No, the general trading license will cover all the activities of your company if you want to sell goods in Dubai.
3. Do I need to apply for a trade license if I open a branch office in Dubai?
Yes, foreign companies opening branches in Dubai also need to apply for trade licenses, if their activities are related to the industries which require such a license.
4. Can I change the trade license into another type of permit?
Yes, if the case requires, the company can change its business license.
5. Do I need other licenses for other activities if I have obtained a trade license in Dubai?
Yes, you will need another license (s) if the trade license will not cover all the activities of the trade license.
6. Is it hard to obtain a trade license in Dubai?
No, there are no complexities regarding the trade license in Dubai. If all the documents are approved, DED will issue the necessary trade license for your business in Dubai.
7. Who needs a general trading license?
Companies with import and export activities involving textiles, furniture, foodstuff, and electronics, to give a few examples, require having a general trading license. The same Department of Economic Development issues this kind of license, as soon as the needed documents are accepted. You should talk to our team of specialists and find out how we can help.
8. Are the Memorandum of Association required documents for obtaining a license?
Yes, the Memorandum of Association is among the necessary documents for a business license application. It is important to prepare the documents with the help of a specialist, to avoid any possible rejection.
9. How fast can I obtain a trade license in Dubai?
Normally, if the documents are accepted, a trade license can be issued quite rapidly. The formalities are straightforward and allow entrepreneurs to start the business in a fast manner.
10. Do I need support from a specialized agent?
Yes, it is quite recommended to have the support of a specialist who can properly handle the formalities for obtaining a trade license. If you are interested in this matter, we suggest you talk to one of our company formation agents in Dubai and ask for help and guidance.
Making investments in Dubai
Dubai is quite a developed business destination in the Middle East and a great choice for international investors concerned with generating profits with their activities. Interested in making investments in the real estate sector in Dubai? You can simply open a company in this field or make investments in this direction without restrictions. The real estate sector is quite thriving and an attraction to businessmen of all kinds. The energy sector, oil and gas, transportation, retail industry, tourism, financial services, and automotive are among the preferred sectors for business, by international entrepreneurs. The business license can be easily obtained and the company incorporation formalities are extremely simple. We have gathered some interesting facts and figures about the economic and business direction of UAE that you might find helpful:
- The numbers say that UAE registered around USD 154 billion in terms of total FDI in 2019.
- UAE ranks 16th out of 190 economies in the world, as analyzed by the 2020 Doing Business report issued by the World Bank.
- 100% ownership is accepted in more than 120 economic activities in UAE since 2019.
- The tax regime in UAE is extremely appealing and investors enjoy the numerous exemptions available.
- Around USD 13 billion was the total value of greenfield investments in UAE in 2019.
For assistance with the company registration and trade licensing procedures, please contact our Dubai company incorporation agents.