As per the World Bank’s business report of 2019, the UAE’s ranking for doing business is 16. The world bank report takes into account only mainland incorporation while evaluating the ease of doing business ranking for the UAE, it doesn’t consider free zones in the UAE. With a robust business plan and professional assistance from reputed business setup consultants in Dubai, starting a business becomes an easier task. However, investors have to follow the rules strictly and regulations of starting a business in Dubai. As per the regulations, obtaining a trade license is mandatory for every entrepreneur to set up a business in Dubai. The Department of Economic Development (DED) is the competent authority that issued trade licenses in Dubai mainland and the authority has stipulated certain procedures to obtain the license. Before venturing out with the procedure of business setup in Dubai, the investors must know the different types of trade licenses issued by the DED.
What are the types of Licenses required in Dubai to start a business?
Here are the lists of licenses required in Dubai to start a Business.
1 Commercial License
In order to buy and sell any commodities or goods or involve in trading activity, companies in Dubai, UAE have to possess a valid Commercial License. Therefore, if you are planning to set up a business activity connected with trading in Dubai, apply for a Commercial License. Commercial License in UAE is issued from three jurisdictions. The investor may select from any of the three. The investor should opt for the most feasible location before applying for the Commercial License.
The official formalities for a commercial license are appended below.
1. Confirm the Business Activity
2. Obtaining Initial Approval
3. Find a Reliable Local Sponsor
4. Formulation of Legal Structure
5. Application for Approval for Trade Name
6. Hire an Office Space
7. Rent or Lease a Commercial Space
8. Obtain Approvals from Ministries and Departments
2 Professional License
A DED professional license in Dubai is issued to businesses wanting to engage in service-oriented activities. It is also issued to skilled individuals holding a professional degree and having significant experience in a particular profession. Many times entrepreneurs get confused on whether they should apply for a commercial license or professional license that’s why it is always necessary to take advice from business experts.
What are the steps to obtain a trade license in Dubai?
If you intend to have your own business in the UAE, you will need a trade license and a valid visa. Also, it allows you to open both local and foreign corporate bank accounts. For those who are already working in UAE, canceling an existing employment visa and applying for a new business visa can be a time-consuming task.
Here is the list of documents commonly required to apply for a Professional License in Dubai.
- Application form
- Emirates ID copy of the expatriate business owner, if a resident of UAE
- Visit Visa Copies of the expatriate business owner, if a resident of UAE
- Passport and Emirates ID of the local Partner
- NOC from the expatriate business owner’s sponsor
- Additional approvals listed by the DED
- Approvals from the municipality and Roads and Transport Authority (RTA) if applicable
3 Industrial License
The industrial license authorizes an individual or a business or a company registered in Dubai or UAE to perform industrial activities such as manufacturing, processing, and other allied industrial activities. According to the UAE Industries (Development & Regulations) Act 1951, it is mandatory to acquire an industrial license before starting the business operations respective to the industry.
How to apply for a UAE trade license?
Before making the trade license application,
First, it is necessary to outline the business activity. Depending on the license it has to be chosen whether it is possible to list more than one on your application. The experts are familiar with permitted activities and will be able to suggest those that align best with the business.
The next step is to choose a company name. This is not an easy task wherever in the world you choose to do business. However, in UAE, there are a few extra considerations to keep in mind. The UAE has a set of strict, yet easy to follow, naming conventions. Once again, a company set up expert can help you make sure you adhere to them.
With the company name decided upon and the activities are chosen, it is advised to now apply for the trade license. This application can be made either directly to the Department of Economic Development or municipality of the emirate that you are setting up in, or the managing authority of your chosen free zone. In either case, a company formation expert can help with this step, even going so far as to manage the entire application process on your behalf.
Here is some basic documentation that is required:
- Completed application form.
- Passport copy of the proposed owner or owners.
- Two-color passport size photos.
UAE trade license fee
There are specific fees that are required to pay to obtain the UAE trade license that will depend on the nature and size of your business and where you choose to set up. UAE trade license costs are comparable regardless of whether it is in a free zone or in the UAE mainland. There are no additional UAE trade license costs to consider unless it is taken on mainland premises or applies for additional UAE trade license visas.
What are the requirements for obtaining a trade license in Dubai?
Department of Economic Development (DED) is responsible for the issuance of trade licenses in Dubai. Obtaining a trade license is a permit to conduct business in Dubai. It depends upon the activity of the business which will determine what kind of approvals is required from relevant authorities.
Below are the requirements for obtaining a trade license in Dubai.
- Banks and other financial institutions require approval from UAE Central Bank.
- Insurance and other related agencies require approval from the Ministry of Economy and Commerce
- Manufacturing firms require approval from the Ministry of Finance and Industry
- Medical and pharmaceutical companies need approval from the Ministry of Health
- Education-related businesses require approval of the Knowledge and Human Development Authority
- Food-related businesses require approval from the Food Department of Municipality
Moreover, companies involved in gas or oil production may need additional endorsements and approvals from government authorities. Lastly, the Dubai Chamber of Commerce and Industry will always be involved in licensing of any kind of business and its registration procedure.
How does Danburite Corporate Help to obtain a trade license in Dubai?
Danburite Corporate will help you to gain a UAE commercial license without any complications and will aid you in setting up of business. A business license is a mandatory requirement for company formation in Dubai. Therefore the investors need to give attention to business activities, legal structures, and the documentation required for approvals while initiating the process of business setup in Dubai. The DED is the licensing authority in Dubai mainland and all paperwork submitted to the DED needs to be proper for obtaining the trade license without delay. It is here that the expert assistance of business setup services like Danburite Corporate becomes a necessity for the investors. Danburite Corporate has years of experience in providing efficient business setup services in Dubai for thousands of clients. Danburite’s team of highly qualified business setup consultants possesses in-depth knowledge of the UAE laws and regulations and therefore a hassle-free process of business setup in Dubai is assured.
FAQs
1. What is a trade license in Dubai?
A trade license in Dubai is a legal permit issued by the relevant authority that allows individuals and businesses to conduct commercial, professional, or industrial activities within the emirate. It is mandatory for every business operating in Dubai, whether on the mainland or in a free zone.
2. Who issues trade licenses in Dubai?
On the Dubai mainland, trade licenses are issued by the Department of Economic Development (DED). Free zone companies receive their licenses from the respective free zone authority governing their chosen zone.
3. How long is a trade license valid in Dubai?
A trade license in Dubai is typically valid for one year and must be renewed annually before the expiry date. Operating with an expired trade license can result in fines and penalties from the relevant authority.
