If you are interested in starting a business, then Dubai might just be the perfect destination to set up. This is because in the past two decades, Dubai has asserted itself as one of the world’s leading trade and business destinations.
Today, it is the leading business and tourist region in the Arabian Gulf. This feat was achieved through the local government’s unprecedented efforts to introduce investor friendly laws, a stable political atmosphere and infrastructure that is years ahead of any competitors. Add the factor of the consistent work being done towards the development of technology and it is clear to see that starting your company here could lead to many potential opportunities.
That said, here is everything you need to know about what a trade license in Dubai is and how to get it.
Trade License in Dubai – What is it?
The Dubai trade license is a necessary document that you must obtain, and which will give you permission to legally work in the United Arab Emirates. It is considered a prerequisite that you must fulfill, and the Department of Economic Development (DED) monitors the entire procedure to ensure that it is implemented. Once you have received your trade license, you will be able to carry out the following activities:
Activities you can do after getting trade license
- Import and export products to/from different countries
- Take part in various commercial related activities and projects
- Promote your services and products to a wider audience
- Be eligible to run different businesses (according to the license you have)
Types of Trade Licenses
The type of license that you apply for will depend upon your industry and business activities. Dubai has 6 different kinds of trade licenses that you can apply for, each of them allow you to carry out different activities and provide different services.
Here are the most common types of trade license in Dubai:
1. Commercial License
This kind of license is issued to companies that take part in any type of commercial trade activity. It is the recommended and valid license for any individual or organization that plans to set up a general or specific trading business. Some of the businesses that will need a commercial license include; real estate, import/export, etc.
If you are a foreigner that plans on obtaining a commercial license in Dubai mainland, you must get a local sponsor who you will give 51% of your company’s shares to. This will leave you with a 49% share.
On the other hand, free zones in Dubai allow you to obtain a commercial license while holding 100% shares of your company.
2. Professional License
If you choose to get a professional trade license, you will become eligible to offer your services, as an individual or as a company. Upon receival of a professional license, you can conduct activities such as;
Activities you can do under Professional License:
- Practicing Law
In essence, it gives an individual with academic skills the permission to offer their expertise to the market. Additionally, if you have a service-related company, this license is necessary to carry out your activities. The plus point here is that you can own 100% even as an expat. To know the difference between commercial and professional license read this.
3. Industrial License
This is the license that is required if you plan on establishing a business that is involved in manufacturing or any kind of industrial activity. Obtaining an industrial license will allow you to manufacture products using local or imported raw materials and some of the industries you can work in are as following;
Activities you can do under Industrial License:
- Medical equipment
4. Tourism License
Considering the fact that Dubai is a global tourist hotspot, the opportunities in the tourism business are plenty. This is why the government has made it mandatory to obtain a tourism license before carrying out associated roles in the city-state. In fact, it is the major prerequisite that needs to be fulfilled if you are starting a travel agency. Getting this license will allow you to do the following;
Activities you can do under Tourism License:
- Rent out hotels
- Rent out guest houses and rooms
- Set up campsites
These are just to name a few main things, otherwise, the license entails you to conduct many more activities related to tourism.
5. Craftsmanship license
If you are a skilled worker looking to work as a freelancer or with a company, you will need a craftmanship license in order to legally work in the city-state. The following are some professions that need a craftmanship license;
Activities you can do under Craftsmanship License:
You must be aware not to work without a license as working without one can make you subject to punishments such as a fine or even permanent ban.
6. Agriculture license
Should you wish to get involved in agricultural activities such as farming and trading of agricultural products such as fertilizers, this license will be required. Companies that wish to carry out any activity related to this sector must obtain it in order to be legally registered. These activities can include;
Activities you can do under Agriculture License:
- Agricultural consultation
- Pesticide distribution
- Farming equipment production
How to Get a Trading License in Dubai
After understanding the definition and types of trade licenses, we may now move to understanding the process of getting trading license. Here is a basic overview of the necessary steps for obtaining a Dubai trade license:
- Choose a company name (allowed by the government’s rules of not being associated with any politics or religion)
- Select the business activity that you or your company plans on conducting
- Look up and pick the trade license that best meets your needs
- Fill out the initial application form and submit it for initial approval
- Collect all necessary documents and paperwork, this can include your Memorandum of Association (MOA) with a local sponsor and application form.
- Find and rent out an office space that aligns with your requirements. (This is to obtain an office address which is necessary to continue the process)
- Obtain a tenancy contract and get it attested/approved from the Ejari (Dubai Land Department)
- Turn over all your completed paperwork and documents to the DED (Department of Economic Development)
- Receive final approval from the DED and get your fee voucher
- Pay the trade license fees
Once you have submitted the trade license fees, the license will be issued to you by the DED. After this, you may apply for the residence visa for yourself, employees, and family members that you wish to bring to the Emirate.
Documents Required for Process
The Department of Economic Development (DED) will ask for a number of documents throughout the license application process. Here are some of the documentation that you will be asked to present:
- A letter signed by the DED that approves the name of the company and activity that they wish to carry out
- Completed application form that has been attested and signed by the company’s legal representative(s).
- Tenancy contract from office space
- Passport copies of all company shareholders
- Memorandum of Association with your local sponsor
Additional documentation may be required, depending on your business activity and whether additional approvals are necessary.
The process of getting a trade license in Dubai may not seem too difficult, but it is recommended to get the help of an expert business setup consultancy agent to guide you through the hefty paperwork and legal procedures.
Checking Trade License through Online Portal
The local government has introduced an online portal that helps with the whole business set up and trade license acquisition process. The name of the portal is the “National Economic Register”. It was launched in the year 2017 and has allowed businesspersons, customers, investors, and government bodies to search and verify business licenses and activities. In addition to license related searches, users can also find comprehensive information on the following:
What you can find on this Online Trade License Portal
- Total number of licenses for specific business activity
- Most common license
You may look up relevant information by entering the following information into the NER’s search engine:
- Business name
- Trade License Number
- Economic Register Number
This service offered by the Dubai government makes it very easy to check your trade license information, including dates for trade license renewal, and the stage of your license application process.
Trade License Cost comparison with Different Emirates
The Emirates within the UAE have different fees for their licenses, this is mainly due to the differences in the markets within each. The table below will give you an idea of what to expect for a general trading license in Sharjah, Dubai, Ajman and Abu Dhabi.
|Dubai Trade License||25,000|
|Abu Dhabi Trade License||23,500|
As can be observed in the table above, different areas can mean different fees for the sane trade license. In the same way, the costs can vary according to the nature of the business you wish to carry out and whether or not you have to pay extra fees for special permissions along with your license.
This is a general overview of the trade license fees of different Emirates, and is by no means an official fees declaration. The fees will vary on a number of factors.
In Dubai, a general trading license first-time fees can average anywhere between AED 25,000 and AED 50,000, depending on the
- Region (mainland/free zone)
- Business Type
- Business Activity.
From the second year onwards, it can come down to AED 15,000 again depends on the above mentioned points.
To get a better or specific cost for the type of business you wish to obtain a license for, contact us for a consultancy, as we can provide a clear cost breakdown and trade license fees estimate, according to your specific requirements.
The Best Business Setup Consultancy to Get Your Dubai Trade License
That wraps up just about everything that you need to know about getting a trade license in Dubai. However, it needs to be mentioned that the prices and requirements of trade licenses can vary according to the nature and location you wish to conduct your business in.
It is for this reason that we advise the enlistment of the services of a business setup consultant in Dubai. They have years of experience with these matters and can handle all the legal documentation as well as paperwork.
In addition to this, they can also guide you with the registration process, name selection, office hunt and association with a local sponsor. Moreover, they can take care of future commitments such as trade license renewal.
Company Setup Consultancy is a leading business setup consultancy in Dubai. Contact us today to get the best advice regarding your company formation, trade license acquisition, fees, trade license renewal, and more!