Knowing the business license you need isn’t something you can do quickly.
Dubai’s business scene is booming, no doubt. But setting up shop means working your way through a labyrinth of compliance matters.
We’ll share our experience with licensing in this post.
Even if you’re new or already have some idea of how it works, you’ll definitely find some new information in this guide.
Let’s get started.
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How Do You Know If You Need A Business License In Dubai?
Well, there’s no reason you won’t need one – every business activity in Dubai requires you to have the appropriate license.
Even very small businesses like running a mobile business cart will need you to get the correct business license. That shouldn’t be much of a problem, though. You can even simplify the whole thing – there are general trading licenses in Dubai.
You might even need external approvals, if your business has regulated activities. We’ll talk more about that in detail later on.
What Business License Should You Get?
To make things a little easier, we already offer some of the best business consultancy services in Dubai, along with some of the best accounting and bookkeeping services in Dubai.
However, you might want to get started on your own, and we can still help with that!
There are a lot of resources you need to look into. Here, we’ll provide an overview of the basics about licensing so you can make sure the start you get is a strong start.
Business Activity License
What you actually plan to do – as in your business’ core activities, is key for your license type.
Authorities list out all permitted commercial activities. From general trading to niche sectors like manufacturing, services, media.
When applying, you must clearly specify your intended operations. This dictates the right license category for your business.
You’ll be given one of the following licenses: industrial license, commercial license, crafts license, tourism license, agricultural license, and professional license.
Your activities also determine if any extra approvals are needed from regulators.
Not disclosing activities accurately? That can mean penalties or even shutdowns. A major risk to avoid.
To get a basic idea of how this kind of licensing looks like, you can search for your business activity in this official DED e-Services page. Over 2,000 activities are a part of this list.
Getting licensing aligned right is the first step. It ensures a smooth, legal entry into Dubai’s dynamic market landscape.
Business Location Matters Just As Much: Mainland or Free Zone
Based on where your business is located, you’ll have to deal with licenses differently. The main two factors are whether your company turns out to be a Mainland company or a Free Zone one.
Here’s a quick overview of what these two mean and what they imply in regards to licensing:
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Mainland Companies
If you’re operating within the UAE itself, your company is considered a ‘mainland’ one.
You’ll be getting your trade license from the economic department of whichever emirate you’re based in. For Dubai, that’s the Department of Economic Development (DED).
This trade license, the Dubai Mainland License, essentially gives you the green light to run your business within that emirate.
But there’s a catch – you usually need a UAE national partner holding at least 51% ownership stakes.
That’s a little different for selected business activities, though.
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Free Zone Businesses
Many companies prefer setting up in one of Dubai’s specialized free zones like DMCC, Internet City or Design District (D3).
These economic clusters have their own regulations and licensing authorities separate from the mainland.
To operate within a free zone, you’ll get your trade license directly from the governing free zone authority instead of a municipal department.
The biggest benefit of Dubai Freezone company formation is that most free zones allow 100% foreign ownership.
Key Distinctions With Location Based Licenses
While both mainland and free zone companies need trade licenses, there are some distinctions:
- Ownership rules are more relaxed in free zones.
- Permitted business activities may be broader for mainland companies.
- Free zones often have tax incentives that mainland companies don’t.
The right setup really depends on your business model, ownership preferences and long-term vision.
Give Company Setup Consultants A Go
That should help you get a head start on acquiring the right license for your business.
If you bump into any hiccups along the way – we’re here to help.
We’ll set you up with the necessary licenses and compliance for a smooth start. Scaling won’t be an issue, as we can also guide expansions into new activities as you grow.
That’s not all, either. We can even help you map out your exact operations and business scope.
