Obtaining a business license is perhaps the most important part after setting up the company in Dubai. The most employed type of business permit is the trade license, also referred to as the commercial license and which designates most of the activities that can be carried out across the UAE. The trade license is issued by the Department of Economic Development (DED) in Dubai.
Also known as a general trading license, this business permit can be used for the following activities:
- For the import and export of goods, and it is usually requested by trading companies registered in Dubai;
- For carrying out various types of commercial activities, such as the sale of goods and services in Dubai;
- The general trade license can also be obtained by companies registered in Dubai free zones;
- The trade license can also be obtained by professionals offering services in a specific industry.
A trade license is a legal certificate that allows businessmen to execute their business in the UAE. This legal document will comprise all activities details that the holder will need to perform in their businesses. However, businessmen can only perform activities mentioned in the trade license. Involvement in any other activity will be considered illegal. The trade license remains valid for one year only. It is necessary to renew it every year at least one month before its expiry date.
We, at Rizmona in Dubai, can provide detailed details on each category of business permit. We can also assist with the registration of a company in Dubai which implies obtaining a trade license, where such permit is necessary.
What are the types of trade licenses? What steps are involved in getting a trade license? And what is the procedure of trade license renewal? These questions together with other valuable information will be discussed in sections below:
Types of Trade License
The UAE authorities give three types of trading licenses depending on the activities of the business. It includes commercial, industrial, and professional business certificates.
A business that involves trading, buying, or selling must need to acquire a commercial license. It may also involve businesses like banking, advertising, insurance brokerage, logistics, car rental services, and real estate.
All of these above-mentioned or relevant companies will fall under the commercial group.
Companies that are involved in manufacturing or industrial procedure will need an industrial trade license. All pharmaceutical and medical manufacturing companies come under this category.
Basically, any business that is involved in transforming a natural resource into goods is labeled as industrial. It includes vast activities like meat processing, canned goods, bread, clothes, batteries, and other activities. Similarly, paper manufacturing, chemical, and other petroleum goods also need an industrial certificate.
A company or an organization that involves in delivering professional services will need to hold a professional trade license. It includes vast services like consultancy, event management, nurseries, salons, laundry services, sports, event management, medical clinics, and others.
Generally, all businesses acquire a license from the Department of Economic Development (DED) authority for establishing a business in Dubai. There are certain categories that need to obtain special permission from different authorities.
For example, a company involved in manufacturing pharmaceutical or medical products should take consent from the Health Ministry. Likewise, a manufacturing business should seek the permission of the Ministry of Finance and Industry.
If you are looking for a trade license renewal Dubai procedure, this part contains valuable information:
Documents Required for Trade License Renewal
Here is the list of documents that you will need while applying for trade license renewal:
- A BR/1 form in Typing
- Photocopy of Tenancy Contract
- Photocopy of existing business trade license
- Photocopies of all business partners’ passport
Trade License in a Dubai Free zone
The requirements applicable to those opening companies in Mainland Dubai also apply to those setting up companies in free zones in the city-state and seeking to obtain a general or professional trade license.
The trade license, when applied for in a Dubai free zone, will be issued by the authority of the respective free zone. The particularity of the trading license issued to a free zone company is that it can only be used for completing trading or commercial activities in the respective free zone. Nevertheless, free zones companies come with many advantages, and our company formation experts in Dubai can also help foreign investors who want to register free zone companies with full foreign ownership.
Advantages of Obtaining a Trade License
Foreign investors opening companies in Dubai have several licensing options when starting a business in this Emirate. The trade license comes with many advantages compared to other licenses, among which the fact that it is quite easy and fast to obtain, the paperwork requirements being relatively reduced. The general trade license is usually issued within 5 working days.
Another advantage of the Dubai trade license is that it is one of the cheapest, the usual fee for such a license ranging between AED 7000 to 15000 depending on several aspects which need to be considered. Also, the trade license allows local companies to enter into national and international trading activities. A less known advantage of the trade license is that it permits the establishment of holding companies in Dubai. In other words, foreign investors interested in setting up holding companies in Dubai can obtain a trade license for this purpose.
Our consultants in Dubai can offer more information on the uses of a trade license and how to apply for one based on the industry you plan on operating in. In case you are facing difficulty with the business license renewal process, you can ask for help from consultants. There are various business advisors available. You would only need to keep checking the status. Regardless of the procedure, you choose for license renewal, it is important to update it on time. The consultant will intimate you prior to renewal so you can get a timely renewal.