Opening a business in Dubai is hard work. You have to do everything from setting up your storefront to ordering inventory to hiring your first employee. And that’s before you even get to the fun stuff: selling your awesome products! But before you can get started on that, you have to do something else: get a trade license.
It’s not as exciting as the other stuff you need for your business, but it’s important. You’ll need one to open your company and operate legally in Dubai.
And unfortunately, the process isn’t always easy to understand. There are different licenses depending on your business activity, and the requirements can be confusing.
But don’t worry! We’re here to help you through it all. Read on for everything you need to know about getting a trade license in Dubai.
What is a Dubai Trade License?
A business license, or trade license, in Dubai allows you to perform commercial activities in the UAE. It supports the following business activities:
- Company formation
- Importing and exporting
- Selling goods and services
Once you have a trade license, you’re legally allowed to do business in Dubai. You can also apply for other licenses that will allow you to conduct specific activities, like playing music or serving alcohol.
Trade License Dubai Cost
The cost of a trade license depends on your company’s needs, as well as its size. However, the DED (Department of Economic Development) has set standard fees for some services:
- Normal license registration: AED 600
- Trade name advertisements: AED 350
- Foreign trade name fees: AED 1000 – AED 3000
- General trading: AED 15,000
How to Get a Trade License in Dubai
Getting a trading license in Dubai is not as straightforward as it sounds, but it can be done. The first step is to fill out the application form online. This is the form you will submit to get preliminary approval from the DED.
If you’re not familiar with the process, the form can be confusing. It’s best to ask an immigration agent for help or ask them to complete the form for you.
This form is just the initial step in your business license application. You will still need to complete several other tasks before your license is official.
Get Third-Party Approvals
You may need to get permission from another party for certain business activities. For example, you might need the approval of a singer or band before playing their music in your establishment.
If you are required to get permission from other parties, do your research and get all the necessary permits. Otherwise, the Dubai authorities may not approve your licensing request.
Choose an Office Space
You can open an office either within a free zone or on the mainland. If you intend to trade inside the UAE, then choose to set up on the mainland.
If you want to trade internationally, setting up an office within a Free Zone is best. The government designated these zone areas for foreign investors to do business without certain restrictions that normally apply in Dubai.
Be sure to research the exact legal and tax ramifications of each free zone before choosing one.
Submit Required Documents
The Department of Economic Development requires the following paperwork to register a business:
- Passport copies of all shareholders
- Initial approval letter
- Tenancy contract
- Memorandum of Association
When you have all these documents ready, forward them to the DED.
How Long Does It Take To Get a Trade License?
In most cases, it will take one day to four weeks to get your trade license once you have applied. The exact time will vary depending on the license you have applied for and the type of business you are operating.
If you have all the required application materials, you can expect your application to be processed quickly.
Trade License Renewal Dubai
The Dubai trade license is only valid for a year, after which it will need to be renewed. Of course, you can speed up your renewal process with PRO services. However, if you’re doing it yourself, there are a few things you should know.
The first step in renewing a UAE business license is getting the right approvals. The type of approval needed depends on what kind of business you are offering. Transportation companies, for example, will need approval from Dubai’s Roads and Transport Authority.
To speed up the process, get approval before beginning the rest of the renewal.
Trade license renewal requires payment and the completion of an application form. Companies will also need to provide relevant documents, such as:
- Approval letters
- Proof of authorization
- Photos of every shareholder
- Tenancy agreement
You can submit these documents to the DED yourself or ask your agent to submit them on your behalf.
Make sure you check the contract for your premises, as it must be valid for at least three months from when you file your application. If the contract is due to expire before the three-month period is up, you must renew it first. If you don’t have a contract, you can use a NOC.
You should also keep in mind that your current license must match the activity listed on your tenancy contract or NOC.
Types of Trade Licenses in Dubai
There are many trade licenses in Dubai, each with its own requirements. There are some dominant classes, including commercial licenses and general trade. Still, it’s important to be familiar with as many licenses as possible so you know which is right for our business.
Professional Trade License
If your venture involves working with clients, a professional license is required for providing services. A license allows people to prove that they are qualified to provide specific services.
The DED issues professional trade licenses in Dubai to consultants, specialists, etc. These professions must show that they have the training and skills required to provide an excellent service to their clients.
With a professional license, you can establish many business structures in Dubai, such as LLCs, Civil Companies, or sole establishments.
Industrial Trade License
Manufacturing companies require an industrial trade license to operate. The license gives the company legal permission to manufacture products within Dubai.
And, as you can imagine, there are many safety implications that come with manufacturing. Therefore, companies must adhere to strict standards and guidelines set by the licensing authority.
The DED issues this license, but it may be necessary to get additional approvals from other government authorities, such as the finance authority, depending on your business.
Commercial Trade License
Businesses that sell products or services to customers require a commercial trade license to operate in Dubai and the UAE. For example, retail businesses (such as stores), public transport services, and healthcare providers must possess a commercial trade license before opening for business in Dubai.
Tourism Trade License
The Department of Tourism and Commerce Marketing (DTCM) issues the tourism license in Dubai. There are three kinds of licenses a tourism-related business can receive.
The inbound tour operator license allows you to serve travelers within the city, while an outbound tourist license will permit you to sell travel packages outside Dubai. The third category is the travel agent’s license; this enables one to perform ticketing and booking services along with other operations.
For this license, you must provide proof of no criminal record, get a no-objection certificate from the Civil Aviation Authority, and supply a bank guarantee.
Free zones offer freelance permits for individuals to work on a consultancy basis, separate from their regular jobs. Freelancer licenses are mostly given to creative and media professionals, such as:
- Content creator
People in a variety of professions can apply for the freelancer license, so if you’re not sure whether that description applies to your job, do some research. Every Free Zone in Dubai has online resources explaining its requirements.
The agricultural license applies to those who grow crops and harvest, as well as other plant-based activities. This license allows business owners to trade in plants, crops, pesticides, fertilizers, and pest control.
The craftsmanship license applies to those who provide manual labor, including plumbers, carpenters, and blacksmiths. Companies that employ these professions must also apply for this license to operate under the law.
Instant Trade License Dubai
An instant trade license is easy to get. You can have it in your hand in a single step and within five minutes. These licenses cover activities that do not require external approvals from government agencies.
Recipients of an instant trade license have the option of choosing their preferred site for commercial operations for one year.
Should You Get a Trade License in a Free Zone?
Dubai’s free zone licenses allow companies of all sizes to enjoy many tax breaks. They are also useful for companies looking to expand their operations internationally.
A free zone can also help you start a new business without having to invest too much money upfront. The government will provide you with office space, utilities, and telecommunications services at low prices, so you won’t have high costs at the beginning of your company’s operations.
Getting a Free Zone trade license has similar steps to getting a trade license on the mainland. You must first choose the type of company you want to form. Then, the business will be eligible to seek any type of license that might fit your needs.
Advantages of Obtaining a Free Zone Trade License in Dubai
Getting a trade license is not something that anyone who wishes to establish themselves as an entrepreneur in the UAE should overlook. While there are other ways of starting up your own enterprise, they can be risky and may not offer all the benefits of having a trade license in a Free Zone, such as:
Establishing your company in a Free Zone will relieve you of tax burdens. You won’t have to pay income tax, import/export fees, or capital gains.
Foreigners can own the full 100% of their company in a Free Zone. On the mainland, businesses require either a UAE citizen or a local service agent as a partner for operation.
Open Your Corporate Bank Account
The Free Zone staff can set up a corporate bank account for you and explain the application procedure. They can also help you arrange meetings with potential financial partners.
No Hiring Restrictions
A business in a Free Zone has no restrictions on the number of employees it can hire or their nationalities. This allows you to gain talented employees who will give your business an edge in the rapidly expanding global market.
Repatriation of Profits
If you’re a mainland-based company that just saw its profits soar, you might want to bring those profits home. Unfortunately, you’ll have to consider restrictions on foreign investment.
Free Zones do not have this issue. You can transfer all profits to your home country without worrying about limitations.
Validate Your Business in 4 Steps
Now that you know how a trade license can play an important role in your business, it’s time that you got started with your Dubai company setup process. If you’re new to investing in Dubai, it helps to get an agent to walk you through the process. This is especially true if you can’t read Arabic.
Our professional agents will help you break through the language barrier and get your new venture off to a strong start. Contact the DUQE team today and begin your journey in Dubai’s most innovative Free Zone.