Dubai is considered as one of the world’s leading business and trading destinations; a status it achieved through the consistent efforts of the local government in introducing investor friendly laws, a stable political atmosphere and modern infrastructure.
This has led to a plethora of investors from all over the world to relocate here and set up their companies.
If you wish to start a business here, you will need to acquire a Dubai trade license. There are several types of licenses; choosing the right license is essential to having a smooth and successful business setup process.
Hence, it is important to understand which trade license options Dubai offers, as well as the features and activities pertaining to each license.
Here is everything you need to know about the types of licenses, activities and obtainment process.
Types of Trade Licenses and Their Activities
In order to start your company here, you will need to acquire a license that is relevant to your business activities and industry. Dubai has a variety of licenses that allow you to carry out certain activities and advertise different services.
The following are the 6 main trade licenses that are available in Dubai:
1. Commercial License
This is the type of license that companies who wish to take part in commercial trade activities must acquire. It will be needed if you plan on establishing a specific or general trading company; industries that fall in this bracket include;
- Real estate
- Clothing business
Dubai has Free Trade Zones where you are allowed to get a commercial license with 100% ownership, regardless of your nationality. This is in contrast with acquiring the license in the mainland area where you will have to give a local sponsor 51% of your company.
2. Professional License
If you seek to offer services that are based on your educational background, you will need to obtain a professional license in Dubai. Doing so will allow you to work in the field you want, either with a company or as an individual. The following are professions that would require this license;
- Law practice
A professional license basically gives educated individuals the permission to work in the market. It is also a prerequisite in the event that you plan on starting a service-providing company.
3. Industrial License
An industrial license is required for you to be eligible to establish a manufacturing or industrial related business. Upon acquirement, you will be given permission to use imported or locally produced raw materials to manufacture products. These are some of the industries that require this license;
- Food industry
- Textile industry
- Medical equipment manufacturing
- Stationery supplies manufacturing
4. Tourism License
Dubai is known for being an international tourist destination, and for this reason, the opportunities related to the tourism sector are bountiful. It is also the reason behind Dubai making it necessary to get a tourism license before operating in the industry. Some of the industries that need tourism license include;
- Travel agencies
- Tour operators
Holders of this license are allowed to carry out a number of activities including;
- Renting out spaces
- Booking trips
- Taking international or local tours
The above-mentioned are some of the activities that can be carried out, but if you’re looking for a more custom list; consider getting in touch with a business set up agency in Dubai.
5. Craftsmanship License
This license will be the one for you if you make your living through your craftmanship skills. It is a requisite, regardless of whether you wish to work with a company or individually. These are some of the fields that will require out to get this license:
- Electrical works (Electricians)
It is also important to mention that there are punishments such as jail time, fines and deportation for those that pay no heed and work without a license.
6. Agriculture License
If your ambition is to get into the agricultural side of business, this is the license that will be required. The activities that you can carry out include:
- Trading agricultural products (fertilizers for example)
- Producing farming equipment
- Consulting on agricultural related matters
If you are interested in learning more about the types of activities permitted under each type of Dubai trade license, then you can visit eservices.dubaided.gov.ae and search for the activity that you are interested in performing. You will find a complete list of permitted activities.
For more information regarding types of trade license and their activities, as well as the process of obtaining a trade license in Dubai you can contact company setup consultants.
Differences between a Commercial and Professional License
These are the two main licenses that are usually acquired by individuals in Dubai. A commercial license is what is issued to companies that plan to involve themselves in commercial trading activities.
Major features of a commercial trading license include:
- A maximum of ten activities can be performed in one commercial trade license
- Can be registered as a Limited Liability Company (LLC), with limited liability to shareholders
- Issued by the Department of Economic Development (DED)
On the other hand, a professional license is issued to individuals who wish to offer their services in the market or set up a professional company. This is a great option for skilled professionals who are interested in owning their own company and offering their skilled services.
Features of a professional trade license in Dubai include:
- Fixed annual fee for professional license holders
- Ability to establish a sole proprietorship business with 100% shares and responsibility for all debts and liabilities (unlimited)
- Issued by the Department of Economic Development (DED)
For further clarification and distinguishment between commercial and professional licenses, the differences between them in specific factors are mentioned in the table below:
|Factor||Professional License||Commercial License|
|Ownership||100% ownership||49% ownership. 51% must be given to a local sponsor|
|Activity||Providing services (teaching, auditing)||Can sell material goods|
|Starting Capital||AED 150,000||AED 300,000|
|Government Fees||AED 11,000||AED 17,000|
Now that the types of licenses and their activities are clear, it shouldn’t be too difficult narrowing down the type of trade license you wish to obtain in Dubai.
However, you must keep in mind that the activities you plan to carry out must be permitted under the license you get. This can be difficult to be certain of if you are unfamiliar with the legal structures and regulations.
This is why we recommend you get in touch with a business set up consultancy in Dubai to help guide you better. We can advise you on which license best suits your needs, trade license fees etc. We can also take care of future commitments such as trade license renewal in Dubai.