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Obtaining a Dubai Commercial License

Obtaining a Dubai Commercial License

Foreign investors setting up companies in Dubai must follow several steps before starting any commercial activity. Also, there are a few requirements that must be fulfilled before submitting all relevant paperwork with the Companies Register for company incorporation in Dubai. Depending on the type of activities to be carried, the company must also apply for one of the three special licenses released by the relevant authorities in Dubai:

  • the commercial or trading license,
  • the professional license,
  • the industrial license.

Below our company registration consultants in Dubai explain how to apply for a commercial license. You can rely on us if you want to set up a company in Dubai and want to apply for a commercial license.

The commercial license under the Dubai Company Law

According to the law, all companies operating in Dubai must apply for one of the licenses available. The commercial license is one of the most popular types of business permits as it allows a company to engage in trading relations.

The most common type of company used for operating under a commercial license is the Dubai limited liability company which can be set up in mainland Dubai, as well as in any free trade zone in the Emirate. A particular aspect of opening a free zone company in Dubai is that each free zone authority issues its own licenses, however, the commercial license is common no matter the special economic zone the company is registered in. However, the commercial license issued for a free zone company can be used for trading activities in the respective Dubai free zone alone.

It is also possible to obtain commercial licenses for branches and subsidiaries of foreign companies interested in operating in Dubai.

If you are interested in company registration in Dubai, our local specialists can help you set one up in mainland Dubai or any of its free zones.

What are the requirements for obtaining a commercial license in Dubai?

In order to apply for a trade license in Dubai, investors must fulfill certain requirements and follow a few steps. The first step will be to designate the main type of activity the company will carry out and the adjacent activities that can be maximum of ten per one commercial license.

The investor must decide on the type of business to be registered in Dubai, as one can choose among several types of companies. In order to obtain the Dubai trade license, the company must be registered with the Companies Register. After this step, the documents to be submitted with the Department of Economic Development in Dubai and with the UAE Federal Ministry of Economy for the commercial license to be issued are:

  • an application form where the company name will be mentioned in English and Arabic,
  • the original lease contract for the company’s registered address,
  • the permit issued by the Dubai Municipality Building Department clearing the use of the office space as a business address for the company,
  • proof of paying the fee for the issuance of the trade license.

Based on these documents, the Department of Economic Development will release the commercial license for the Dubai company.

Steps for obtaining a Dubai commercial license

It is important to know that the commercial license cannot be obtained before the actual incorporation of a company in Dubai. For this, one will need to follow the steps below:

  1.           select the business form and the activities that match those of the commercial license;
  2.           draft the Memorandum and Articles of Association of the company which must specify the activities to be completed;
  3.          register the company with the Department of Economic Development in Dubai and obtain a VAT number;
  4.          pay the fee related to the company registration and to the issuance of the commercial license.

Once the company is registered, the commercial license will be issued automatically.

Our local advisors can help you select the appropriate business activities which will enable foreign business owners to apply for a commercial license in Dubai. We can also help with the registration of the company or we can handle the Dubai company formation procedure on behalf of foreign entrepreneurs.

You can also find out from the video below how to apply for a commercial license in Dubai:

Types of activities to be carried under the Dubai trading license

According to the Commercial Law, the following activities can be undertaken based on a commercial license:

  • import and export activities;
  • sale of electronic products;
  • supply of brokerage services;
  • real estate-related services;
  • sale of construction materials.

The commercial license is also required when opening auto vehicle rental businesses and even logistics companies.

The Dubai commercial license must also be obtained by tourism companies operating in the emirate and even by branches of foreign companies. Companies offering healthcare services also fall under the scope of the commercial license in Dubai.

It should be noted that a Dubai company can have a maximum of 10 activities on the trading license. It is also possible for a company with less than 10 activities to complete the list of services or goods after the license has been issued.

Our Dubai company formation advisors can assist with the application of the trading license as part of the registration process of the business. We also remind foreign investors that on mainland Dubai a local partner is required in order to set up a business. This requirement is not mandatory in Dubai free zones where full foreign ownership is permitted.

Renewal of the commercial license in Dubai

Dubai commercial license has one-year validity from the date it was issued, and it can be renewed. A renewed trade license in Dubai has a four-year validity. In order to apply for renewal of a Dubai trade license, the following documents must be submitted:

  • the original or a copy of the trade license,
  • a copy of the office space lease contract,
  • approval from the relevant authorities, if it is necessary,
  • details of employees’ accommodation for companies with a foreign shareholder.

Other activities for which a commercial license in Dubai is needed

International entrepreneurs wanting to start a business in Dubai need to observe the requirements for obtaining a commercial license. Import and export, automobile trading, a company offering plumbing and sanitary services, restaurants, warehousing, and rental services need a commercial license prior to the start of the operations. All the activities permitted by the legislation are approved by the Department of Economic Development in Dubai, or DED as it is known. Plus, one can benefit from the assistance of a company formation agent in Dubai.

Are there specific requirements related to licenses for companies in Dubai mainland?

No matter where you want to develop your activities, whether in mainland Dubai or in the special economic zones, the regulations for getting a commercial license remain the same. Moreover, companies with activities in mainland Dubai can access governmental business contracts.

Advantages of the commercial license in Dubai

Most foreign investors do not know that the commercial license can bring a lot of benefits to those setting up companies in Dubai. Among these, we mention the following:

  •           exemptions from taxes and the free repatriation of profits to the foreign investor’s home country if used in a free trade zone;
  •           the possibility of engaging the Dubai company in international trading activities;
  •           companies operating under a commercial license can have their head offices anywhere in Dubai;
  •           companies can sell more than one product under a Dubai commercial license (the products can be from different classes);
  •          it provides for easier procedures for obtaining employment visas for foreign workers;
  •           companies operating under commercial licenses are not required to undergo audits in order to renew their licenses.

The commercial license allows investors setting up companies in mainland Dubai to complete their activities and to sell goods and services in other UAE Emirates, as well as internationally. One of the less known facts about the commercial license is that it provides for easier visa admittance procedures for foreign employees: companies can hire a larger number of foreign employees under a commercial license in Dubai.

The commercial license is the easiest to obtain in Dubai compared to the other types of business permits. It is good to know that where specific activities are completed, the commercial license will not suffice, and special permits and authorizations must be obtained.

Our company formation consultants in Dubai can offer more information on the advantages one can acquire under a company running with a commercial license.

Why set up a trading company in Dubai?

Dubai is one of the most prolific emirates of the UAE and trading activities here thrive no matter if operated under companies registered by local or foreign investors. According to the Dubai Statistics Center:

  •    in the first quarter of 2019 (Q1) the total value of imports in Dubai was 114,387 million AED;
  •    in the same quarter, the total value of exports from direct foreign trade was 32,044 million AED
  •   the total value of free zones imports was valued at 73,962 million AED in Q1 in Dubai;
  •    exports in all Dubai free zones accounted for 9,866 million AED during the same period of time.

FAQ about commercial license in Dubai

1. Who needs to apply for a commercial license in Dubai?
A commercial license is required for companies selling products and services within the UAE territory and abroad. There are many operations for which a commercial license in Dubai is needed, and complete information can be offered by our agents.

2. Who issues the commercial license in Dubai?
The Department of Economic Development in Dubai and the Federal Ministry of Economy in UAE are the institutions that issue commercial licenses for companies operating here. A series of documents must be prepared in the first place.

3. What documents are required for a commercial license in Dubai?
Besides the application forms offered by the above-mentioned authorities, a copy of the rental contract where the business is located plus the company documents of incorporation are solicited for a commercial license application in Dubai. One must pay specific fees at the time of application.

4. Is the VAT number solicited for a commercial license in Dubai?
Yes, the VAT number is required when applying for a commercial license for economic operations in Dubai. We remind that the VAT was introduced in 2018 in UAE.

5. What types of economic activities require a commercial license in Dubai.
Entrepreneurs interested in opening a real estate company, developing trading activities, or providing brokerage services need to apply for a commercial license in Dubai. The same thing applies to travel agencies and logistics & transportation companies in Dubai.

6. How many activities can be provided with a commercial license in Dubai?
According to the business regulations in UAE, companies established in Dubai cannot have more than 10 activities linked to a commercial license. You can talk more about the regulations imposed in this field with our company formation agents in Dubai.

7. Can I apply for a commercial license in Dubai at the time of company incorporation?
Yes, it is quite recommended to pay attention to the needed licenses and permits for your future business in Dubai. The application for a commercial license in Dubai can start at the same time as the company formation.

8. What is the validity of a commercial license in Dubai?
A commercial license in Dubai is valid for one year and it can be extended prior to the expiry date. The application requires the same documents, however, some approvals might be necessary.

9. Can I hire foreign workers under a commercial license in Dubai?
Yes, the visa and immigration procedures are simple under a commercial license and allow international companies to hire staff from abroad. This is another topic that can be discussed with our specialists in company formation and more.

10. Do I need a commercial license for a healthcare company in Dubai?
Yes, activities in the healthcare system require a commercial license in Dubai. One must apply for such a license before starting the activities in UAE.

Working with our company formation agents in Dubai

Opening a business in Dubai is not a complicated process, on the contrary. But there are a number of aspects, including those related to commercial licensing in Dubai that require specialized assistance and support.
We collaborate excellently with foreign investors who benefit from full support and services dedicated to the type of business they want to develop in Dubai. We rely on trust, experience, transparency, and confidentiality when developing relationships with our clients, so any investment you may have in mind, we can take care of all aspects.

For complete details about company registration and licensing, please contact our company formation agents in Dubai.