Dubai welcomes foreign investments greatly and in order to start business in Dubai you would need trade license which is the most important document. Dubai offers different business models to choose from for foreign investors. Department of Economic Development is the authority responsible for the regulating the Business activities for all businesses outside the free zones. Department of Economic Development (DED) responsibilities are licensing, classification of business activity permitted within Dubai, issuance of trade license in Dubai for conducting business in Dubai Local market. This department operates from different locations to provide the licensing services. The main office located near the clock tower in Dubai, UAE.
Steps to obtain a trade license in Dubai
- Reserve company name and Apply for initial approval.
- Notarize the company’s Memorandum of Association at DED
- File company documents
- Apply for the establishment card at the Ministry of Labor
- Register native workers with the Ministry of Labor
- Register native workers with the General Authority for Pension and Social Security
Reserve company name and Apply for Initial Approval
The first step is to file a registration application, the investor must first obtain initial approvals from the Licensing section of the Dubai Department of Economic Development (DED) on the business activities. And after that name reservation.
Notarize the company’s Memorandum of Association (MOA)
The applicant notarizes the standard Memorandum of Association (MOA) at Department of Economic Development (DED). Notarization of company takes no more than one day. We will assist you to prepare the M&A as per the local laws and regulations.
File company documents
Investors need to file the company documents with the Department for Economic Development (DED) and need to obtain trade license after that it needs to register for membership at the Dubai Chamber of Commerce and Industry (DCCI). To obtain the Trade License and Commercial Registration Certificate investors must submit the following original documents to the Commercial Registry at the Department for Economic Development DED. For the convenience of investors these documents can also be submitted online.
- The approved application form duly signed by the company’s manager or company’s legal representative(s).
- An original copy of the memorandum of association.
- A letter issued by the DED proving the company name approval.
- The original letter of company approval which is issued by the Department for Economic Development (DED) Committee of Limited Liability Companies.
- Copy of Passport of each partner.
If Commercial Registry officials consider the documentation to be in order, the company name will be entered into the Commercial Register. The Department for Economic Development (DED) then sends the following documents to the Federal Ministry of Economy to arrange for publication:
- Copy of Notarized memorandum of association.
- Copy of the application for entry of the company name in the Commercial Register.
- Extract of the entry of the name of company in the Commercial Register.
Before the newly created company can start its operations, it should apply to the Department for Economic Development (DED) for a trade license. After the notary public at the Commercial Registry notarizes the memorandum of association (MOA) a license application form is completed which is in Arabic, signed by the authorized company signatory and filed with the DED in duplicate. The DED files one of the copies and forwards the other to the UAE Federal Ministry of Economy.
The trade license application should be filed with the applicable fee and following documents:
- The proposed company name in Arabic and English and prescribed form for setting out.
- The original lease of the company’s office premises.
- For the sustainability of the office premises prescribed form for obtaining the Dubai Municipality Building Department’s clearance.
Apply for the establishment card
Investors can apply for establishment card at the Ministry of Labor. The owner of the company or the official representative of the company should go in order to apply for the Establishment Card at the Ministry of Labor. Establishment Card can be issued at the same day if the trade license is obtained and the fees are paid.
Register native workers with the Ministry of Labor
According to Ministerial decree No 1215/2005 all native workers must be registered with the Ministry of Labor. The following documents are to be required for submission during the registration process:
- Copies of the employment contract
- Passport copy of the employer’s
- Trading license copy
- Proof that the worker is a UAE citizen
Registration of native workers with the General Authority for Pension and Social Security
Process of registration also needs companies to register the native workers with General Authority for Pension and Social Security. Registration requires the submission of the native workers updated salary certificates or contract of labor.
Types of Dubai Trade License
Trade licenses have been categorized in four types which are to be issued in Dubai, UAE. Depending upon the nature of the business activity an entity plans to start, license in one of these categories will be issued by Department of Economic Development (DED):
- Commercial License
- Industrial License
- Professional License
Commercial license is to be issued to an entity that will engage in any kind of trading activity like buying and selling goods. Individual or the companies having commercial license in Dubai can only perform the activities mentioned in the license.
Industrial License is to be issued to an entity that will engage in manufacturing or any type of industrial activity. For this type of license you need to have a physical office in UAE. Entities are only allowed to manufacture the items which they have obtained the license for.
Professional License is to be issued to service providers, professionals etc. This type of license guarantees 100% ownership of the company. Following are the type of businesses require professional license:
- Law firms
- Management consultancy
- Educational institutions
- Information technology services
- Auditing companies
- Accounting companies
- Marketing consultancy
- Medical services
Tourism licenses to be issued to the companies or individual who are willing to engage in the business of tourism and travel.
Dubai Business license registration and approval process
- For the Issuance of licenses of banks and other financial institutions first you must have the approval of the UAE Central Bank
- For the Issuance of licenses of manufacturing companies first you must have the approval of the Finance and Industry Ministry.
- For the Issuance of licenses of companies engaged in insurance and other related firms first you must have the approval of the Economy and Commerce Ministry
- For the Issuance of licenses for medical and pharmaceutical products first you must have the approval of the Health Ministry
- For the companies involved in gas or oil production you must get additional endorsements and approvals from other government agencies
Business registration in Dubai, UAE must also have the involvement of the Dubai Chamber of Commerce and Industry
Requirements for business ownership
With the exception of those companies having a professional license all other companies/ business set up in Dubai or anywhere in the United Arab Emirates are required to have no less than fifty-one percent 51% shareholding by a UAE national.
Below are few exceptions where 100% foreign ownership is allowed:
- Any company established at any of the Free Zones in Dubai or anywhere in UAE.
- Where the law requires 100% local ownership.
- In case of an artisan or professional companies which allows total foreign ownership.
- A foreign entity registering a representative or branch office in Dubai or UAE.
- In case a professional license is being applied for professions such as architect, doctor, artist etc. in this case foreign ownership can be 100%. However a local national must be taken as service agent.
Business setup as a representative or branch office
A branch in Dubai or a representative office of a foreign company in Dubai is allowed 100% foreign ownership. This is only allowed on the condition that a local agent is appointed and the local agent must be a UAE national or a company is 100% owned by UAE nationals. The business registration in Dubai as a branch or representative office is covered by the Commercial Companies Law.
Dubai company registration process
Here is the step by step method of company registration process in Dubai, UAE
- Decide who is going to be the partner or local sponsor.
- Decide the role of the local partner in the company.
- Selecting the fees you are prepared to pay per year.
- Decision of a name and activity approval from Department of Economic Development
- It can be applied on a standard application form and submitted at Department of Economic Development
- You would also need to look for business premises and also you need a tenancy contract
- You must have a business premises evidenced by a tenancy contract in order for you business to get registered.
- Develop a Memorandum of Association (MOA) with the sponsor and submit to Department of Economic Development
- Memorandum of Association (MOA) can be developed by any legal firm which must specify the special arrangements and ownership percentage of all partners.
- Submission of the MOA and the License application in Department of Economic Development along with the required legal documents and the tenancy contract.
- With you application you have to pay all charges and fees. You should get a license after a week or so after submitting you application.