The UAE is commonly recognized as the Middle East business hub. Over the last two decades, there has been a tremendous growth in the economic, business, trade, and logistics sectors. Their contribution to the world economy is significant. Registration of a business in Dubai is a legal process and acquiring a business license is the most essential aspect of this process. There are many factors involved, from knowing the forms of business licenses to selecting the correct type of license. It is critical that you, as a businessperson, take all these variables into account.
A trade or business license is not only a formality in Dubai, it is something of a requirement. This license determines the nature of your business activity and legitimizes your company. While it is somewhat expensive, getting this license has its own advantages and perks.
Why Do You Need a Business License to Do Business in Dubai?
Firstly, we need to understand what the license of the UAE company is. Any onshore company in Dubai – in the Free Trade Zone or in the main territories – must be licensed.
The business license in Dubai will provide the company with an identity. A business license is a permit that validates the business as a legal body. Business licenses are issued to companies in order to establish accountability for business activities in the area. It also categorizes, preserves, and secures the interests of the proceedings of the firm.
If you, as a corporation, want to trade legitimately, obtaining a trade license is necessary. Trade licenses will guarantee that the business is governed in compliance with the Commercial Companies Act of the UAE. Furthermore, getting a trade license in Dubai permits you to conduct business legally and in compliance with the rules implemented by the regulatory authorities and allows you to attain several benefits.
Major Licenses in Dubai That You Can Apply For
Department of Economic Development in Dubai (DED) is the authority that provides licenses to businesses in Dubai. DED has categorized every business under various licenses, providing them prominence as per their business activity. Business activities are classified into majorly five business licenses in the UAE.
The most popular Business License types available in the UAE are the following.
- Commercial License for General Trading Businesses
- Professional License for Service-Related Businesses
- Industrial License for Manufacturing Goods
- Tourism License for Travel and Tours Industry
- Freelance License Permit
Commercial License in Dubai
The commercial license in UAE is granted to businesses engaged in the purchasing and distribution of products. The Commercial License in Dubai permits businesses to operate in the UAE or outside the Emirates. There are various forms of Commercial Licenses in the UAE for specific commercial practices. For instance, if you are only interested in trading in the local market, you can apply for a general trading license in the UAE. Likewise, for any form of import/export, there is an import/export license that you would have to file with the licensing authority. There are different categories of business license and business activity list in the UAE for the trade of products such as electronics, vehicles, machinery, construction materials. The applicant must select a specific Business License in Dubai when establishing a business with the respective free zones, mainland or offshore. In a commercial license, an ex-pat or foreign investor can legally own 49% of the total shares and the rest or 51% will be owned by a UAE national or local service agent.
Here is a list of Commercial Trade Licenses available for your specific business activities.
- Publications and media materials trading
- Used Furniture trading
- Oil & gas trading
- Spare parts trading
- Gold & precious metals trading
- Trading in chemicals
- Trading in Automobile
- Safety equipment trading, etc.
Advantages of Acquiring a Commercial License
A commercial trade license serves as both the regulation and protection for trading companies. The benefits provided by a commercial license are as follows:
- To perform a maximum of ten activities in one commercial trade license;
- Several options for the type of company to register;
- Several similar business activities can be undertaken under one license;
- Secure business engagement with DED and Registrar of Companies;
- Residence visas for employees and company management
- Assistance with opening of corporate bank accounts
- Cost-effective ways for the renewal of a commercial trade license in the UAE
Professional License in Dubai
Every person or business linked to the use of the intellectual ability of individuals will be required to obtain a Professional License to perform their services in Dubai and the rest of the UAE. If the owner is more than one person, the business firm can be listed as a Civil Works Corporation. Consulting, auditing, legal professionals are entitled to the Professional License in Dubai. IT service providers, technicians, craftsmen, craftsmen, etc. may also apply for a UAE Professional License. In a professional license, an expat will have 100% ownership and can become the sole owner.
List of Business Activities that fall under specific Professional License category in the UAE.
- Consultancy & Services
- Insurance Consultancies
- Computer Consultancies
- Information technology Consultancies
- IT Infrastructure Consultancy
- Environmental Consultants
- Tax Consultancy
- Marketing Consultancies
- Management Consultancies
Advantages of Acquiring a Professional License
A service-oriented company relies on professional skills. Therefore, specialists and professionals each need to acquire a UAE professional trade license in order to set up a business in the country.
Benefits of having a professional license are as follows:
- Fixed annual fee for professional license holders;
- Suitable for skilled professionals;
- Transparency in dealing with clients;
- Business can apply visas for employees
Industrial License in Dubai
For business involved in the industrial and manufacturing activities in Dubai and UAE are awarded Industrial License. It is mandatory for the company to have a physical office in the UAE to issue an Industrial License.
Type of specific Industrial License types available
- Garments Manufacturing License
- Meat products Manufacturing
- Dairy Products Manufacturing
- Animal & Birds Feed Manufacturing
- Carpet Manufacturing
Tourism License in Dubai
Dubai is very successfully depicting the tourism sector as a leader in global tourism and becoming the center of attraction for attracting the business investors, casual tourists and world travelers. In order to start a travel and tourism business in Dubai, you need to obtain a travel and tourism license from the Department of Tourism and Commerce Marketing (DTCM). According to the activity of tourism business, there are three main types of tourism licenses available in Dubai.
- Outbound tour operator
- Inbound tour operator
- Travel agent
Freelance Permit in Dubai
Another up and coming license in Dubai these days is the freelance permit. Freelancing has already gained popularity in the UAE. The Free zones of Dubai, Abu Dhabi, Ras Al Khaimah, and Fujairah are offering Freelance Permits for individuals.
These permits are focused on specialized individuals in the media, technology, art and entertainment sector to offer their services on a consultancy basis, apart from their full-time jobs. Currently, the Dubai Media City, Dubai Knowledge Park, Dubai Internet City, Ras Al Khaimah Free Zone Authority, Fujairah Creative zone, Twofou54, etc., offer Freelance Permit to the individuals.
Freelancer Licenses are issued to the following creative and media professionals.
- Audio/Sound Engineer
- Content provider
- Media Specialist
Which Is the Right Trade License for Your Business?
Business licenses can either barricade or broaden the scope of your business. For instance, if you’d like to start an online company, a portal license would be perfect. Moreover, if you would like to sell your own made goods online, a portal license would not work. You will have to apply for a general trade license in compliance with the rules of the Department of Economic Development (DED) so that you will be a licensed dealer and have the right to trade both offline and online.
Knowing the correct trade license for your company can also differ based on your market, your business operation, your business arrangement, your authority, etc. Hence, you should firstly analyse your requirements with a company formation expert and then opt for a trade license in Dubai. This will help you from added costs and save time.
Where to apply for a Business License in Dubai?
In Dubai, the Department of Economic Development (DED) is the government agency that issues Business Licenses for Mainland companies. When it comes to Free Zones, it is the respective Free Zone Authority that issues the business license. Same goes with the Offshore Business types too. You as a commercial entity willing to do business in Dubai onshore or mainland must apply for a trade license with the DED. There are several documentations and paperwork involved in the process of licensing, that may involve other legislative authorities as well. It may take anywhere between three days to a few weeks to get a trade license in Dubai. The time taken to get a trade license is subjected to your business activity, the approvals required for your business from governmental and non-governmental authorities, etc. If you have all the right documents, a trade license can be issued in three-days.
How to Get a Business License in Dubai?
To obtain the general trade license one must follow a few steps.
- Categorize your Business: The Free Zone or the Department of Economic Development (DED) provides a category list. You must identify the appropriate category for your Business.
- Choosing a suitable legal structure: Your company’s legal structure is just as important as the trade name of your company. The legal structure mainly depends on the number of shareholders you have in your business, and the jurisdiction you choose to operate your business in.
- Choosing a trading name: While choosing a trading name whether it defines your business activity and make sure it adheres to the government guidelines
- How much you need to invest: Depending on your business you must have an idea of your investment.
- Lease or purchase office space: Choose an office space that suits your budget and business requirements and make sure, you can conveniently accommodate your employees.
- Get initial approval from the authority: It is a fundamental step for obtaining a trade license.
Make sure you have the documents such as
- Duly filled application form,
- The master plan of your business activity
- Copy of passport (of every shareholder/partner associated with your business legally),
- Certificate of reference from the bank or 2 years financial statement,
- NOC from your sponsor,
- Letter of Intent
- Notarized copy of Registry Identification Form (for the Director)
- Passport-size photograph of the Director or the Manager
- Details of Share Capital.
Requirements for Business Licensing
- Issuance of licenses for banks and other financial institutions must have the approval of the UAE Central Bank
- Issuance of licenses for manufacturing companies must have the approval of the Finance and Industry Ministry.
- Issuance of licenses for companies engaged in insurance and other relevant firms must have the approval of the Economy and Commerce Ministry
- Issuance of licenses for medical and pharmaceutical products must have the approval of the Health Ministry
Renewal Process of Business License in Dubai
A trade license under the Department of Economic Development (DED), must be renewed every year. The process is explained below:
- Authorization: To renew a business license business in Dubai, you will need approvals and authorizations from the concerned governmental bodies. For instance, a Taxi Service company needs consent from the Road and Transport Authority of Dubai, likewise, a restaurant needs approval from the Food Safety Department and municipality. It is usually best to get the authorization letter before applying for license renewal.
- Documentation: The typed renewal form, the tenancy contract, attested EJARI, any authorization documents, approvals, photographs of all the business partners, and the payment voucher/transaction number (given by the DED) are the documents you will require while renewing the license with the DED.
- Tenancy Contract: Your tenancy contract should be valid for not less than three months from the application date. Make sure you check your tenancy contract and then apply for the renewal along with an attested EJARI.
Why Riz & Mona
Our consultants have years of hands-on experience in this domain and we can make the whole process easy and completely hassle-free for you. Contact us for any kind of assistance, we also help in Specialized Business Licenses.