The UAE, and particularly its capital Abu Dhabi, is a great place to start a company and establish your business. The reason behind it is the government’s efforts in promoting bilateral ties and trade with almost every nation in the world.
Understanding What is Abu Dhabi Trade License
A trade license is the documentation that is required by a company or individual to be allowed to carry out commercial activities in the UAE. The process is regulated and conducted through the supervision of the Department of Economic Development (DED). Once you have acquired the license, you will be given permission to do the following activities.
Following activities you can do after getting Trade License
- Import and export your goods with other nations
- Take part in a number of commercial related activities
- Let the masses know of your services and products through advertisements
If you are new to the Emirates, we recommend getting help from an expert business setup consultancy in UAE to help you acquire the trade license. This will streamline the process and help you avoid any cultural barriers or legal complications.
Getting a Trade License in Abu Dhabi
These are the steps that you need to take to acquire a trade license in Abu Dhabi. The steps are relatively straightforward, but you may run into trouble if you are unaware of how to tackle each step. A business setup consultant will help you through all of these steps:
Steps to get Trade License:
- Select the license type.
- Narrow down the business activities (Keep in mind that the maximum number of activities are 10 per license)
- Pick an appropriate structure and legal status (LLC, sole proprietorship etc.)
- Choose a trade name for your company that falls under the rules of permitted names by the UAE government.
- Submit your application for initial approval by the DED
- After receiving initial approval, register your trade name
- Find a local sponsor and sign a Memorandum of Association (MOA)
- Find a location to establish your business and obtain a tenancy contract
- Gather all relevant documentation including the MOA and application form
- Submit it to the DED for final approval and that’s all!
Required Documents for Trade License
The following are the required documents that you need to submit to the DED to greenlight the process.
- Certificate of trade name
- Shareholders signed licensing form
- Copies of the passports of all shareholders
- Copy of naturalization certificate
- A letter from the Ministry of Economy and Planning that authorizes the company formation
- Copy of your residence permit
- A letter approving proposed business activities signed by the authorities
- Clearance and no objections from your local sponsor in the form of a letter
- A copy of your Memorandum of Association with said local sponsor
- A copy of the letter from your bank that authenticates the claimed finances of the company
- A copy of your tenancy contract
Once you have submitted the above-mentioned documents to the relevant authorities, they will give you a trade license fees voucher that you need to pay.
Permitted Activities under Different Licenses
1. Commercial license Activities
With a commercial license, these are some of the businesses/activities that you can partake in:
- General Trading
- Real Estate
2. Professional License Activities
Getting a professional license will allow you to:
- Teach privately or with an institution
- Practice Law as an individual or firm
- Audit firms as an individual or with an organization
It is basically the license that individuals who are skilled in academic fields need to obtain.
3. Industrial License Activities
It is the license needed to:
- Run a factory
- Manufacture goods
- Sell goods for profit
This is the license that most investors nudge towards in Abu Dhabi.
4. Craftsmanship License Activities
This is the license that workers whose main skill is what they do with their hands need to acquire. The following are some of the professionals that need this license:
5. Tourism License Activities
Considering the UAE’s status as a global tourist destination, organizations that wish to partake in the industry must get this license. Doing so will allow them to;
Keeping in mind that the opportunities are vast in the tourism sector, the above-mentioned are only a portion of the activities that can be carried out under this license. For full information about all the activities under each trade license, it is best to get a consultation from our expert business setup agents.
Cost of Trade License in Abu Dhabi
The trade license fee in Abu Dhabi may vary according to the nature and business that you wish to establish. Find the below information, is an estimate of what to expect for a general trading license.
- Local Sponsor MOA fee: AED 12,000
- Commercial License fee: Between AED 8000-15000
- Administrative fee: Between AED 3000-45000
- Tenancy Cost: Minimum AED 5000 for an office space
- E-channel: AED 2200
The total Abu Dhabi trade license fees comes up to AED 38,700. However, it is important to mention that this is the cost for the first time. The cost goes down significantly in the second year and there are factors that you do not have to pay for. For instance, you can cut down the cost of the tenancy by getting a virtual office in Abu Dhabi. This is only one example of how an agent can help you minimize costs and maximize profits.
How to Renew a Trade License Requirements, Process and Cost
In the scenario that you already have an existing trade license, you will have to renew it yearly. This is what you need to know about the renewal process and fees:
Required Documents to Renew Trade License
- Valid tenancy contract
- Attestation letter from Ejari (Land Department) confirming tenancy contract validity
- Typed BR/1 form
- Photocopy of current trade license
- Photocopies of the passports of all stakeholders
Process of Trade License Renewal
After gathering all the required documents, you must do the following.
- Submit all documents to DED
- Wait for approval
- Get fee voucher
- Pay fee voucher
- Receive renewed license in print form from DED
Trade License Renewal Fees
Now that the process has been covered, we can move onto the trade license renewal fees in Abu Dhabi. Once again, the price may vary according to the type of license and activities. The estimated cost here would be between AED 10,000 and 12,000 and are broken down as following.
- Tejari fees
- Government fees
- Foreign company name
- Trade name fees
Trade License in Abu Dhabi
Fine for Expired License
In the event that your trade license expires in Abu Dhabi. You will be given a 30-day grace period in which you can either renew or cancel your license. But, if you continue with your operations beyond that, you will be liable to the below-mentioned fines.
- Operating without a license: AED 5000
- Failure to renew before due date: AED 250
- Running another office under one license: AED 2000
Above are the monetary fines that you or your company may be subjected to. However, the UAE government may impose other punishments if you are a repeat offender. These punishments can include:
Punishment by UAE Govt if you are repeated offender
- Blacklisting of your company
- Freezing of all assets
- Nullifying all visas under the license
- Possible deportation
- Barring of re-entry
Getting your company black-listed is not what you want to do, as it potentially and realistically will be the end of any business endeavors that you plan to carry out in the UAE. This is why you should get the help of a business set up consultant who can take the responsibility of trade license renewal off of your shoulders and ensure that you have nothing to worry about besides your business activities.
Cancellation of Trade License in Abu Dhabi
If you choose to cancel your trade license in Abu Dhabi, following steps you need to follow.
- Send all your employees a notice of termination
- Acquire a letter from your Board of Directors affirming the license cancellation
- Enlist the services of a liquidator
- Receive a letter from the liquidator
- Get it attested by the Notary Public
- Receive a company closing certificate from the DED
- Advertise the closure of your company in two local newspapers
- Wait for 45 days and see if there are any objections
- Once the 45 days have passed with no objections, you may show the ad to the DED along with the final audit report
- Obtain final approval from shareholders and liquidators
- Acquire a photocopy of the BOD resolution letter and liquidation certificate
- Submit it to the DED
- Pay the license cancellation fee voucher
Free Trade Zones in Abu Dhabi
One other option that Abu Dhabi offers to investors and organizations is business set up in an Abu Dhabi Free Zone. It is the most popular option for foreigners that look to relocate here for a number or reasons such as:
- 100% ownership of your company
- Exemption from corporate taxes
- Exemption from import and export taxes
These are some of the benefits of establishing your company in a Free Trade Zone in Abu Dhabi. In addition, each free zone in Abu Dhabi offers its own unique features and benefits for businesses.
Here are a few of the most popular Abu Dhabi free zones:
- Abu Dhabi Airport Free Zone (ADAFZ)
- Abu Dhabi Global Market (ADGM)
- Masdar City Free Zone
- Khalifa Industrial Zone – Abu Dhabi (KIZAD)
- Twofour54 Media & Entertainment Hub
- Higher Corporation for Specialized Economic Zones (ZonesCorp)
- Abu Dhabi Ports Company Free Zone (ADPC)
- Industrial City of Abu Dhabi
For more information regarding the features of each free zone, and for choosing the best Abu Dhabi free zone for your business, get in touch with our business setup consultants.
Business Set Up Consultation in Abu Dhabi
Now that all the elements and factors have been briefed, it is clear that the process of obtaining a trade license in Abu Dhabi is not too difficult. Moreover, enlisting the services of a companysetup.ae will make the process as quick and hassle-free as possible!
Our years or experience and familiarity with the legal structures, local laws, and customs of the Emirates will ensure that you are able to setup your business in the smoothest manner possible, while allowing you to dedicate your time to running your organization.
Get in touch with us today for an expert advice!