Establishing a business in the UAE and in Abu Dhabi capital in particular, it is possible to open the doors to the world of opportunities. Global trade has made the process of setting up and expanding business easier than ever before, thereby encouraging entrepreneurs to start and develop their businesses by the government. One of the first and most crucial steps is obtaining a trade license in Abu Dhabi.
This detailed guide explains everything you need to know about how to get a trade license in Abu Dhabi, the required documents, fees, and renewal process.
Table of Contents
Understanding What is a Trade License in Abu Dhabi
A trade license in Abu Dhabi is an official document issued by the Department of Economic Development (DED) that allows an individual or company to legally conduct commercial activities within the UAE. In the absence of this license, companies are not able to import or export, or even promote their goods and services.
After you obtain the license you are able to:
- Import and export goods
- Participate in commercial activities.
- Market your products and services in a legal manner.
In case it is your first time in the UAE, having a professional business setup service may make it easier. They make sure that there are no legal and cultural considerations that you have to make and thus they save you both time and effort.
How to Get Trade License in Abu Dhabi – Step-by-Step Process
Getting a trade license in Abu Dhabi involves a few well-defined steps. Through good direction, the process may be carried out effectively.
Step 1: Choose the Type of License
Determine the type of business you have, i. e., commercial, professional, industrial, tourism, or craftsmanship-related.
Step 2: Define Your Business Activities
Choose what activities you want to conduct. A single license can have up to 10 activities.
Step 3: Choose a Legal Structure
Determine whether your business will operate as an LLC company, sole proprietorship, or partnership.
Step 4: Reserve a Trade Name
Choose a trade name that is unique and it must comply with the DED laws and it should reflect your business.
Step 5: Get Initial Approval
Apply to be initially approved by DED. After approval, the next steps can be carried out.
Step 6: Sign the Memorandum of Association (MOA)
Locate a local sponsor and write your MOA, that is just the ownership and share of profits in business.
Step 7: Secure a Business Location
Lease or rent an office space and get an effective tenancy contract.
Step 8: Submit Final Documents to DED
Present all the papers, your MOA and tenancy contract as well as application forms and have them approved finally.
Upon approval you will be given a trade license in Abu Dhabi and be allowed to start business.
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Documents Required for Trade License in Abu Dhabi
The following is what you will be required to provide to the DED:
- Certification of reservation of trade name.
- Signed application form of license.
- Duplicates of passports of all shareholders.
- Copies of naturalization certificate (where necessary)
- Company formation letter of the Ministry of Economy.
- Residence permit copy
- NOC from the local sponsor
- The copy of the Memorandum of Association.
- Bank reference letter
- Tenancy contract
Once submitted, the DED issues a payment voucher for your Abu Dhabi trade license fees.
Types of Trade Licenses in Abu Dhabi
Various kinds of trade licenses enable you to perform some kind of activity:
- Commercial License – Trading such as general trading, real estate, health sector, and contracting.
2. Professional License – This is to be taken by persons in legal, education, and consulting careers.
3. Industrial License – To carry out factory and manufacturing.
4. Craftsmanship License – This is a license of the skillful workers like the electricians, plumbers, and carpenters.
5. Tourism License – It applies to enterprises in the hospitality, travelling, and entertainment industries.
Abu Dhabi Trade License Fees
The Abu Dhabi trade license fees depend on your business type, size, and location. Below is a general estimate: Below is a general estimate:
| Cost Component | Estimated Fee (AED) |
|---|---|
| Local Sponsor & MOA | 12,000 |
| Commercial License Fee | 8,000 – 15,000 |
| Administrative Fees | 3,000 – 45,000 |
| Office Tenancy | Minimum 5,000 |
| E-channel Registration | 2,200 |
Approximate Total: AED 38,700
The cost is lower in the second year and onwards. The cost may also be reduced by choosing a virtual office or shared workspace.
Trade License in Abu Dhabi Renewal
Trade license will have to be renewed once a year. Renewal makes sure that your business does not have to go against the law and pay penalties.
Documents to be renewed will include the following:
- Valid tenancy contract
- Ejari attestation letter
- Current trade license copy
- BR/1 form
- Passports of shareholders
Process:
- Submit documents to DED
- Await approval
- Receive and pay the fee voucher
- Collect renewed license
Trade License Renewal Fees: AED 10000-120000 (depending on the type of license and activity).
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Penalties for Expired Trade License
Running without renewation of trade license may attract hefty fines:
- Carrying out business without a legitimate license: AED 5,000.
- The failure to renew on time: AED 250
- Operation of many offices on a single license: AED 2,000.
Repeat offenses can also lead to being blacklisted, visa issuance termination, and deportation. It is therefore important that they should be renewed in good time.
Trade License Cancellation in Abu Dhabi
In case you want to shut down your company, then you should do the following:
- Inform workers and pay the wages.
- Gain approval of board to cancel licenses.
- Engage a liquidator and obtain liquidation certificate.
- Advertise closure in at least two local newspapers.
- Wait 45 days for any objections
- Send final audit report and other documents to DED.
- Make payment of cancellation fee and get final confirmation.
Abu Dhabi Free Zones – An Attractive Alternative
The advantages of the free zones in Abu Dhabi prompt many investors to establish their business in one of them:
- 100% foreign ownership
- No import/export duties
- Corporate tax exemptions
Popular Free Zones Include:
- Abu Dhabi Global Market (ADGM)
- Masdar City Free Zone
- Khalifa Industrial Zone (KIZAD).
- Abu Dhabi Airport Free Zone (ADAFZ).
- Twofour54 Media Hub
There are different advantages in each free zone, and they depend on the type of business.
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.
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.
Why Choose a Business Setup Consultant in Abu Dhabi
Although the process might be very easy, newcomers may find it difficult to understand the local laws and documents. A professional business setup consultant helps with every step — from choosing the right license type to managing Abu Dhabi trade license fees efficiently.
They make it a hassle free, painless and fast change over process, thereby letting you concentrate on the development of your business.
Final Thoughts
Getting a trade license in Abu Dhabi is the foundation of doing business in the UAE. With knowing the process, documentation, and costs involved, then you can be confident in starting your company. To have a one-on-one consultation, contact skilled business establishment advisors who will also facilitate the whole process and enable you to launch your operations in the booming market of Abu Dhabi.
To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.
