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Trade License Dubai: A Complete Guide
Anyone thinking of opening a business in Dubai will need to get a Dubai trade license. This is one of the most important steps new businesses take when starting a company in the area.
Your Business Journey Starts With a Trade License
Dubai is well known for its excellent commercial prospects and flourishing business climate. Because of this combination, it has become a top choice for company owners wishing to launch a venture in the United Arab Emirates.
The International Free Zone Authority (IFZA) of Dubai said that, in comparison to the same time in 2022, the number of business licence registrations increased by 177% in the first quarter of 2023.
If you’re thinking of getting involved in Dubai’s expanding economy, you should know the fundamentals of getting a trade licence. Obtaining this licence is essential for carrying out any type of economic activity in the city, including production, services, and commerce.
This tutorial will go over the steps involved in getting a trade licence in Dubai, including prices, perks, and renewals.
What Are the Types of Trade Licenses in Dubai?
Trade licenses in Dubai are different based on the type of business. The Department of Economic Development (DED) issues four main categories of licenses:
Professional License
This is for individuals or companies offering professional services, such as consultants, lawyers, and accountants.
Commercial License
Businesses that acquire or sell products must have a commercial licence. This category includes a variety of wholesale and retail trading activities.
Industrial License
Businesses engaged in manufacturing or any other industrial activity, such as the production, fabrication, and segregation of goods, must get an industrial license.
General Trading License
With a general trading licence, a company can engage in a greater variety of operations and trade almost any kind of item.
E-Commerce License
e-commerce licenses are intended especially for companies that conduct online sales of products and services. For businesses that use electronic networks or other digital platforms, it is essential.
What is a Free Zone, Offshore, and Mainland License?
The location of your intended company establishment in Dubai will also determine the kind of trade licence you need. View the licenses listed below.
Mainland License
A Mainland License is necessary for businesses operating within the Dubai mainland. These companies can trade anywhere in the UAE and directly with the local market but require approvals from various government entities. The license is issued by the DED.
Free Zone License
A Free Zone License, issued by the authority governing a specific Free Zone, permits companies to operate within the confines of that zone. These licenses offer benefits like full foreign ownership and tax exemptions but usually restrict companies to business within the free zone or internationally.
Offshore License
An Offshore License is used to set up an offshore company, which is mainly used for international business and cannot trade within the UAE. This setup offers confidentiality and tax advantages but does not allow for physical office space in the UAE.
By understanding these distinctions, businesses can better navigate the regulatory environment in Dubai and choose the appropriate license and location to meet their operational needs.
Benefits of Getting a Trade License in Dubai
Obtaining a Trade License in Dubai is not only essential for legal compliance and ensuring operational readiness, but it offers numerous advantages that can significantly enhance your business operations and potential for growth. Some of the key benefits include:
Tax Benefits
Dubai offers significant tax advantages for doing business, including no personal income tax and corporate tax exemptions for certain types of businesses. Dubai’s tax incentives are one of the main reasons why nearly 50,000 people moved to Dubai in 2023.
Unlike many other countries that impose import, sales, and manufacturing taxes, Dubai is almost entirely tax-free, allowing traders and business owners to increase their revenue.
Boost Local and International Trade
With a general trading license, there are vast opportunities for manufacturing or importing goods. You can distribute your products locally within Dubai or export them internationally to gain profits from overseas markets.
Additionally, a general trading license permits the re-export of goods, enhancing your company’s global trade capabilities.
Strategic Location with Few Trade Restrictions
Dubai’s global positioning makes it a gateway between the East and West, offering unparalleled access to markers across the Middle East, Europe, Asia, and Africa. Even better, there are very few trade restrictions in Dubai. As long as your products are registered under a general trading license, you won’t have to worry about restrictions.
Improve Credibility
Companies that adhere to the legal requirements in Dubai are seen as more trustworthy by customers. Holding a Trade License increases your business’s exposure and credibility in both local and international markets.
Sponsorship Opportunities
A Trade License in Dubai allows the sponsorship of dependents, such as family members or employees. This benefit makes it easier to relocate and establish a robust network for both personal and professional life in Dubai.
Ease of Setup
Acquiring a Trade License in Dubai is typically quicker and less complicated than in other regions of the UAE. The processing time is swift, allowing businesses to be operational in Dubai’s Free Zones or mainland in just a few weeks. Additionally, there is no requirement to submit auditing reports once the license is granted, significantly reducing paperwork.
Government Support
The Dubai government offers substantial support for businesses, including various incentives and a transparent regulatory environment that encourages business growth and investment.
Securing a Trade License in Dubai not only legalises your business activities but also opens up a myriad of opportunities to expand and thrive in one of the world’s fastest-growing economies.
What Documents Do I Need to Get a Trade License?
Part of getting your Dubai trade license requires you to submit certain documentation. It’s important to make sure that all the documentation is well-organized and that you submit it with your application to avoid delays.
For one, you’ll need to fill out a trade license application. All company managers will need to sign the document.
You’ll also need to create a Memorandum of Association. This should be done with the help of a legal representative.
Next, be sure to attach the company name approval to your application. The DED will send you this approval after accepting your chosen business name.
Finally, all managing partners will need to submit copies of their passports.
How Do I Get a Dubai Trade License?
The following detailed guide will help you navigate the requirements and steps to obtain a Dubai Trade License.
1. Select a Business Name
The first step to getting your trade license is to select an appropriate trade name. Your business name must adhere to UAE guidelines when selecting a company name. It should also be a unique name not used by another active entity.
2. Define Your Legal Structure
Select the legal structure of your business, which will determine how it is managed and the extent of liability for its owners. Options include Sole Proprietorship, Limited Liability Company (LLC), Partnership, Branch of a Foreign Company, and Free Zone Company, each with specific implications for ownership and liability.
3. Define Your Business Activities
Once you have chosen your company’s name and legal structure, you’ll need to define the business activities you plan to undertake. Make sure to list out all activities on the license, and keep in mind that each license allows a maximum of ten activities.
4. Complete the Application Form
The next step of the process is to fill out your application form. Once completed, submit the form to the DED for your initial approval.
5. Get Additional Approvals
Some business activities may require external approvals. Make sure to do your research before completing the business formation process. Otherwise, your Trade License may be rejected.
6. Gather Required Documents
Collect all necessary documents for your application, including identification numbers (Emirates ID, passport, or unified number), and ensure all signatures are present.
7. Choose Your Business Location
If you are applying for a Mainland License, you will need to secure a physical business location and obtain a tenancy contract. The contract must be attested by Ejari and submitted with your application materials.
8. Select the Main Business Activity
Add the primary and additional business activities to your application
9. Select the License Type
You can choose between different types of licenses, such as a normal, instant, or DED trader license.
Normal License: This requires drafting a Memorandum of Association, which can be provided electronically or manually, along with a lease agreement for the business premises.
Instant License: Available through a simplified, one-step process that takes just five minutes, this license is suitable for specific activities that do not require external approvals. It includes options for drafting a memorandum of association and establishing a virtual office for the first year. Additional services provided with this license include:
- Membership in the Dubai Chamber for commercial activities.
- An establishment card from the General Directorate of Residency and Foreign Affairs.
- An establishment card from the Ministry of Human Resources and Emiratization, which includes approval via SMS for setting up the establishment card and automatically opening a file to employ three workers.
This license is applicable for the following legal entities:
- Limited Liability Company (L.L.C)
- Single Owner Limited Liability Company (L.L.C – SO)
- Sole Establishment
- Civil Company
DED Trader License: This sole establishment license is issued with the trade name through the “Invest in Dubai” platform. It is targeted at home-based businesses in Dubai and costs AED 1070 (covering license fees plus knowledge and innovation fees) and an additional AED 300 for Dubai Chamber membership.
10. Add License Parties and Their Details
Include all relevant details about the license and partners, such as their address, nationality, contact information, job title, and ownership shares.
11. Add Ultimate Beneficiary Owners
Provide information about the ultimate beneficiary owners if applicable.
12. Submit Your Application
With all your materials in hand and a business location chosen, you’re ready to submit your trade license application. Send all the materials to the DED in order to receive your trade license.
13. Pay Your Licensing Fees
Make payments for the issuance fee and the license fee using one of the available payment methods.
14. Send Legal Documents
Send legal documents like the memorandum of association to the concerned partners for electronic signatures. Ensure all partners are registered on the platform for electronic signing.
15. Obtain the Final License
After all payments are made and documents are signed, receive your final license and related documents.
How Much Does It Cost to Get a Trade License in Dubai?
Before you obtain your Trade License and start a business in Dubai, we advise you to consider the costs involved to budget effectively.
The cost of acquiring a Trade License can vary significantly based on factors such as the type of goods you plan to sell and the specific approvals required for your business. Additional factors influencing the cost include:
- Number of business partners
- Region of establishment
- Business structures
- Partnerships with local sponsors
- Type of business activity
Below is a list of the fees associated with acquiring a Trade License from the DED website. Please note you do not need to pay all of the fees, only the fees that apply to your business activities.
| Fee Type | Cost (AED) |
|---|---|
| DED Trader License | 1,070 + 300 (Dubai Chamber fees) |
| Intelaq License | 1,070 |
| License Registration Fee | 600 |
| Building Contracting Activities Fees | 10,000 |
| General Trading Activity Fees | 15,000 |
| Investment Activity Fees | 15,000 |
| Business Center Fees | 25,000 |
| Real Estate Activities Fees | From 5,000 to 25,000 |
| Foreign Trade Name Fees | From 1,000 to 3,000 |
| Trade Name Advertisements | 350 |
| Service Request Form | 50 |
| Knowledge Dirham Fee | 10 |
| Innovation Dirham Fee | 10 |
| Memorandum of Association Fee / Service Agent Contract | – |
| – For documents <= AED 100,000 | 300 per signature |
| – For documents > AED 100,000 | 0.5% of the document value (capped at 15,000) |
| – Postponing transaction completion | 500 |
| – Signatures at different service centres | 500 |
| – Electronic signatures per partner | 100 |
You can expect to pay between 15,000 and 50,000 AED for a Trade License in Dubai; however, variables such as the chosen business activities and setup location will significantly affect this figure.
How Long Will It Take to Get Approved for a Trade License?
After you’ve submitted your application, it typically takes anywhere from three days to four weeks to get your Trade License. The exact turnaround time will depend on the approvals required and the business activities you plan to conduct.
Your turnaround time should be fast as long as you have all the appropriate documentation in order. Double-check your application materials before submitting them to ensure your Trade License is issued quickly.
How to Renew a Trade License in Dubai
Renewing your Trade License in Dubai is a straightforward process, but it’s important to begin before your current license expires to avoid penalties. Here’s how you can renew your Trade License:
1. Obtain Necessary Approvals
The first step to renewing your Trade License is to secure the necessary approvals and authorisations, which vary depending on your business type. For instance, transportation companies must obtain approval from Dubai’s Road and Transport Authority to renew their licenses. Research your business activities and the approvals you will need. To speed up the process, get these approvals before beginning the rest of the renewal process.
2. Check For Compliance
Ensure that all your business activities, leases, and permits are up to date and comply with the local regulations
3. Clear Any Fines
Before renewal, clear any outstanding fines or fees associated with your business to avoid delays.
4. Update Tenancy Contract
Ensure that your tenancy contract is valid and has at least a month remaining before expiration. Renew it if necessary, as you’ll need to provide proof of a valid tenancy for the Trade License renewal.
5. Gather and Submit Documents
Compile all necessary documentation, which typically includes:
- The completed renewal form
- Attested Ejari registration
- Authorisation and approval letters
- A valid tenancy contract
- Recent photographs of all business partners
- The payment number for the renewal fees
Submit these documents to the Department of Economic Development (DED) for processing.
6. Pay Renewal Fees
Submit the necessary fees for license renewal, which will vary depending on your license type and business activities.
It’s advisable to start the renewal process at least one month before your license expires to ensure all steps are completed and your renewal is fully processed before your current license expires.
Get Your Dubai Trade License Today
Getting a Trade License in Dubai is the key to benefiting from the many UAE business advantages. It’s a way to help your company boost revenues and make valuable investments in a rising economy.
Ready to get started setting up a Dubai business? Get in touch with our team and we’ll help guide you through the entire process.
FAQ’s
Do You Need a License to Trade in the UAE?
Yes, you need a Trade License to legally conduct any form of business activity in the UAE. This applies to all emirates, including Dubai, Abu Dhabi, Sharjah, etc. Each business entity must be registered and possess a valid Trade License from the relevant local authority.
What is the Cheapest Trade License in the UAE?
The cheapest Trade License options often come from Free Zones, which offer packages tailored to freelancers and small businesses. For instance, the Fujairah Creative City and Ajman Free Zone often have affordable licensing options, with basic packages starting from AED 11,000 to AED 15,000.
Can I Sell Online Without a License in the UAE?
No, selling online in the UAE legally requires a Trade License. Whether you sell through your own website or through third-party platforms, you must have a Trade License that specifically allows online trading activities.
Do I Need a Trade License to Sell on Amazon UAE?
Yes, to sell on Amazon UAE or any other e-commerce platform, you need a Trade License. The license ensures you can legally import, store, and sell goods in the UAE.
Does UAE Have Free Trade?
The UAE is known for its numerous Free Trade Zones where companies can be 100% foreign-owned, are exempt from taxes, and can repatriate 100% of their profits. However, outside these zones, normal UAE trade regulations and duties apply.
Can a Foreigner Start a Business in the UAE?
Yes, foreigners can start a business in the UAE. There are several options, including setting up in a Free Zone to retain 100% ownership or forming a partnership with a UAE national which is required for certain types of businesses outside Free Zones.