Dubai has ambitious plans to become a global business hub. The new Dubai Economic Agenda D33 aims to accelerate trade and foreign investment in the next decade with its $8.7 trillion economic plan. This signals a huge opportunity for traders, investors, and entrepreneurs to set up a business in the UAE. However, to do this legally and take advantage of the many opportunities that Dubai offers, you need to obtain a general trading licence.
In this article, we’ll explain everything you need to know about the general trading licence in Dubai. We’ll look at who needs it, what it covers, how to apply for one, and more.
A general trading licence is a document issued by the Department of Economic Development (DED) that grants permission to engage in import, export, distribution, and storage activities for a wide variety of products. It also enables companies to open local offices in the UAE and appoint authorised representatives.
With a general trading licence, businesses can take advantage of the country’s strategic geographical location as well as its favourable tax environment. They also have access to Dubai’s established network of international business partners, making it easier for companies from all over the world to set up shop here.
A general trading licence gives its holder the right to trade in a range of goods, depending on the scope of their activities. This may include importing and exporting goods, as well as selling within the UAE. It does not need any specific approval from any government body for each item traded and can be used for multiple items.
More specific than a trading licence, a general trading licence is typically issued by an individual ministry or department; it allows traders to engage in only one activity, such as real estate, banking, or insurance services.
To obtain this type of licence, you must have permission from the relevant government body to trade in that specific activity. Naturally, this type of licence is more restrictive than a general trading licence.
A general trading licence in Dubai allows a company to engage in a wide range of trading activities. These activities may include:
- Import and export of goods: A general trading licence permits a company to import and export various goods, including raw materials, finished products, machinery, and equipment.
- Wholesale and retail trading: A company with a general trading licence can engage in wholesale and retail trading activities, selling products to businesses and consumers.
- Trading of construction materials: Companies with a general trading licence can also trade in construction materials, such as cement, steel, and wood.
- Trading of electronics and electrical equipment: Businesses can also trade in electronic and electrical equipment, including computers, laptops, smartphones, and home appliances.
- Trading of textiles and garments: With the licence, you can trade in textiles and garments. These cover clothing, fabrics, and accessories.
- Trading of food and beverages: Companies with a general trading licence can trade in food and beverages, including packaged foods, beverages, and fresh produce.
- Trading of medical and healthcare products: Lastly, businesses can trade in medical and healthcare products, such as pharmaceuticals, medical equipment, and supplies.
There are several reasons why entrepreneurs and investors flock to Dubai to set up a business. The UAE, in general, offers a business-friendly environment, with Dubai being the crown jewel. Let’s take a look at some of the benefits you can get if you set up a general trade company in Dubai:
Dubai has invested heavily in developing its infrastructure over the years, making it an attractive destination for businesses looking to set up shop. The city boasts a well-developed transportation network with multiple airports, seaports, and highways that make it easy to move goods around the region quickly and efficiently.
In addition, telecoms networks are reliable, and high-speed internet access is widely available throughout the emirate. Dubai also offers modernised banking services and financial regulation, which make it easier for trading companies to conduct their business transactions.
Dubai also offers a wide range of business support services, from legal advice to accounting, that make it easier for trading companies to do their business in the emirate.
Dubai is home to a large and diverse population of skilled labour. This means that businesses in the city have access to an abundant supply of workers who are highly qualified and experienced in different industries, from engineering and finance to customer service and retail.
This makes it easier for companies to find the right people for their specific needs, allowing them to increase efficiency, reduce costs and improve productivity.
Furthermore, this abundance of skilled labour gives businesses greater flexibility when it comes to staffing requirements – they can easily switch up personnel depending on the task at hand or hire temporary staff if needed.
Dubai is poised to become a global hub for trade, finance, and logistics, as it connects businesses from around the world with customers from countries across the Middle East and North Africa (MENA) region.
The city’s strategic location at the crossroads of Europe, Asia, and Africa also makes it an ideal point of entry into these lucrative markets.
Businesses can use Dubai as a ‘springboard’ to access other MENA countries due to its preferential trade agreements with them. These agreements provide lower tariffs and other incentives for companies operating in Dubai.
The city is home to a wide range of support services that can help businesses navigate international markets more easily. This includes world-class ports, free zones, legal and financial experts, and shipping hubs with essential infrastructure such as warehouses and distribution centres.
Dubai is strategically located between East and West, which is why it is an ideal hub for international traders looking to expand their operations and gain access to new markets. The city also has some of the best port facilities in the world, with strong air links that facilitate the swift movement of goods throughout the Middle East region.
The government also provides incentives for businesses, such as generous tax breaks and low import duties, which allow companies to benefit from lower costs associated with doing business in this region.
The UAE has a zero-tax regime, meaning that profits and capital gains are not subject to any taxes.
The country’s corporate tax of 9% for businesses with larger annual revenue is also one of the lowest in the world. What’s even more impressive is that small businesses with annual revenue below AED 375,000 don’t even have to pay corporate tax.
There are several other incentives available to companies located in the UAE, like reduced import/export duties, free trade zones with preferential tariffs, and exemptions from certain customs duties on certain products or services.
Here are the common steps to follow to obtain a general trading licence. The actual steps may vary depending on the type of business you’re setting up.
Step 1: Choose a legal structure for your business. You can set up your business as a sole proprietorship, a partnership, a limited liability company (LLC), or a branch of a foreign company.
Step 2: Choose a trade name. Your business name should not be offensive or violate any trademarks or intellectual property rights.
Step 3: Obtain initial approval. You will need to submit an application and the required documents to the Department of Economic Development (DED) to obtain initial approval for your business.
Step 4: Reserve a trade name. Once you have obtained initial approval, you can reserve your trade name with the DED.
Step 5: Prepare and sign the Memorandum of Association (MOA). If you are setting up an LLC, you will need to prepare and sign the MOA.
Step 6: Obtain necessary approvals and licences. Depending on your business activities, you may need to obtain additional approvals and licences from various government authorities.
Step 7: Rent an office space. You will need to rent an office space in Dubai to register your business.
Step 8: Obtain the general trading licence. Once you have completed all the above steps, you can apply for the general trading licence from the DED.
There’s no need to be intimidated by the process of applying for a general trading licence. While you may need to produce a large number of documents, the process is relatively straightforward. Here are the papers to keep in mind before you apply:
- Application form: A completed application form from the Department of Economic Development (DED).
- Passport copies: Passport copies of all shareholders, managers, and directors of the company.
- UAE residence visa copies: Copies of UAE residence visas of all shareholders, managers, and directors of the company.
- Emirates ID copies: Copies of Emirates IDs of all shareholders, managers, and directors of the company.
- No-Objection Certificate (NOC): A No-Objection Certificate from the sponsor or current employer of the UAE resident shareholders, managers, and directors.
- Memorandum of Association (MOA): The MOA is a legal document that outlines the company’s objectives and the responsibilities of its shareholders. It must be signed by all shareholders and notarized by a public notary in Dubai.
- Trade name reservation certificate: A certificate proving that the trade name of the company has been approved and reserved by the DED.
- Lease agreement: A copy of the lease agreement for the office space where the company will operate from.
- Bank reference letter: A reference letter from the bank stating the shareholders’ financial standing.
- Business plan: A detailed business plan outlining the nature of the company’s activities and how it plans to generate revenue.
A general trading licence is essential if you want to do business in the UAE. It grants permission to engage in import, export, distribution, and storage activities for a wide variety of products as well as enabling companies to open local offices in the UAE and appoint authorised representatives.
To apply for a general trading licence, you need to register your company with the DED or an authorised free zone authority. You also need to submit all necessary documents, such as trade name registration forms, trade licence application forms and other required information.
Finally, you must pay the applicable fees and be approved by the DED or free zone authority before receiving your licence.
With a general trading licence, businesses can take advantage of Dubai’s strategic geographical location and favourable tax environment as well as its established network of international business partners. This makes it easier for companies from all over the world to set up shop here, helping them unlock their true potential.
A trading licence is a specific type of business activity licence, while a general trading licence covers more than one commercial activity. The latter is ideal for businesses that wish to engage in multiple types of trade and commerce activities.
The best trade licence for your business depends on the type of activities you wish to carry out. If you’re looking for a comprehensive licence that covers multiple types of commercial activities, then a general trading licence is likely to be your best option.
The main benefit of a general trading licence is that it enables businesses to carry out multiple activities in one go. Companies can engage in import, export, distribution, and storage activities without the need for separate licences. This makes it easier to expand operations and take advantage of the many opportunities available in Dubai.
Yes, it is possible to sell products online with a general trading licence. However, you will need to obtain an e-commerce licence from the DED if you wish to do so.