Dubai is the ideal place to start your path as an entrepreneur and form a company or as a trader capable of trading your products across any border.
The United Arab Emirates has become a very attractive region for foreign investors as it allows the formation of new companies with unique incentives in the area.
Expansive fiscal policies based on the low cost of taxes, Visa regulations, the companies’ structures, among others, allow the new and old investors to thrive.
However, before starting the process of forming your company, you must take into account certain documentation, permits, approvals, and types of licenses in order to operate legally in the United Arab Emirates.
Dubai offers three main license options for individuals and businesses, each governed by a different production activity.
In addition to these three licenses, there are also other specialized licenses depending on the nature of the service or product offered.
The three Professional License categories in the UAE are the following:
* Commercial License: It is aimed at those companies that carry out commercial activities, for example, import and export, general trading, among others.
* Industrial License: Created for companies that carry out processing, manufacturing, and assembly activities.
* Professional License: It is aimed at individuals who want to offer professional services, for example, security service, designing, and other non-commercial activities.
What is a Professional License?
In essence, a Professional License in Dubai is a document issued and authorized by the Department of Economic Development (DED) aimed at those individuals who wish to legally practice a profession in Dubai, in which they depend on their physical and mental abilities to generate profits.
Generating income by exercising a profession is accomplished by individuals who work in certain industries, for example:
· Consultancy Services
· Engineering Consultancy
· Crafting and Designing of products
· Medical and Educational Services
· Business Set-up
Those individuals interested in selling professional services such as Tourism Guidance, Designing, Research, or any other profession based on talent, skill, or experience in Dubai, must obtain this license from the Department of Economic Development.
By holding a Professional License in Sharjah, you can legally work and offer your services to any client or employee in the United Arab Emirates.
Also you have the power to undertake the activities according to your area of expertise or your qualifications.
Dedicating yourself to performing professional services requires skills, talent, experience, and intellectual abilities to execute certain tasks or projects, and maintain the quality and high standards of government agencies, country authorities, and your clients.
Although the Professional License in Dubai allows you to perform most of the activities in this category, there are certain tasks that will require the approval or authorization of the appropriate government agency.
These agencies are established in Dubai to manage industry standards, maintain safety and health, enforce regulations, and make sure that services are offered only by licensed professionals who follow the laws and compliances defined by the relevant Ministry.
How to obtain a Professional License?
Firstly, to obtain your Professional License in Sharjah you must make a description of the activities to which your company is going to dedicate itself.
Afterward, you will need to get a Local Service Agent, who will take care of all the paperwork and legal formalities to obtain your Professional Trader License.
Once you complete these two steps, you will then need to obtain initial approval from the Department of Economic Development.
Lastly, you will need to choose a name and submit all the necessary documents to DED to receive approval.
Requirements to obtain your Professional Trader License
· Copy of the local agent’s naturalization book
· Visitor’s visa copy for the foreign partners
· Copies of the passport of owners or investors
· No Objection Certificate (NOC) from the local agent if the owner of the company is a foreigner expatriate living in Dubai with an employment pass. If the investor has a visitor Visa, then his ID number is needed.
· Documents that prove the initial approval of the corresponding government entity based on the productive activity of your company. (For example, National Media Council, Roads and Transport Authority, Dubai Municipality)
Procedure to obtain a Professional License
· Complete the local service agreement form with the UAE National from an official translator and get the form certified from a public notary service.
· If you made the agreement in the Arabic language, then you do not need a translator
· Make a Memorandum of Association (MoA) with your local agent
· Place your local agent’s early fee in the agreement
· If you are applying for a civil company license, then you need to fill out more than one application form and certify each of them.
· All owners/partners must attend at the time of signing the court agreement
· Obtain the approval of the municipality for the Tenancy Contract
· Submit all forms with their certificates (one copy for each one)
· Submit passport copies of every partner/owner and NOC for partners/expatriate (if any) at any Department of Economic Development center
· Make the corresponding payment and collect your license, a payment receipt will be given to you at the same time.
The Professional License cost in Dubai is around AED 10,310 and includes the following:
· Professional License Fees
· Trade Name Fees
· Market Fees (depending on the amount of the tenancy)
· Government Cultural Fees
· Local Agent Fees
· Local Fees, among others.
Once your Professional License in Dubai expires you can renew it at any corresponding government entity.
Keep in mind that you may need a certification as evidence that you have experience in the particular skill that you want to offer your clients.
A Professional Trader License is valid for one year, so you have to renew it before it expires.
When you renew the license for the first time, it will be valid for the next five years.
The documents required to renew a Professional License are the following:
· Copy of office lease contract
· Copy of Professional Trader License
· Approvals from relevant authorities
· Details on employee accommodation (applicable for companies with a foreign shareholder)
Advantages of obtaining a Professional License
Obtaining a Professional License in Dubai will help you save money in the long run because you will be able to establish your company’s office in any area of Dubai.
This ensures that your company has no ties with any special authority.
And has the freedom of a Limited Liability Company.
Many businesses that are starting to operate tend to use co-working spaces and even serviced offices so that they can get enough time to obtain their licenses.
This will allow them to have an accessible work area while lowering the costs of running a business.
Currently, the market fee is 2.5 percent, which makes this option the cheapest.
Wide range of activities
The Professional License in Abu Dhabi, Sharjah is not dedicated to a select group of businesses or companies.
On the contrary, it covers a wide range of activities.
The list of activities that you can perform through this type of license increases regularly.
Which makes the process of obtaining a Professional Trader License ever easier.
If you are interested in starting a company, the chances are high that your proposed business idea is within those accepted by the authorities when granting a Professional License.
You should keep in mind that even if the authorities accept the activity, you still have to go through the approval process.
For example, if you want to offer training services, then your business must have enough space and the necessary materials to carry out the training process, like screens, projectors, whiteboards, among others.
Having a Professional License in Dubai will allow you to maintain 100% ownership of your company.
You can maintain your daily operations without the need for a local shareholding party.
In addition to this, with the help of your license, you will be able to do business with different markets and clients.
Also, you can offer your services to your clients and make contracts with other companies as well.
This also includes agencies related to the Dubai government and other educational institutions.
Professional License Activities
Every entrepreneur who wants to start a commercial or business activity in Dubai must acquire a license to operate legally.
The Department of Economic Development has created an administrative system that separates various sectors into Professional License categories in the UAE and provides a better opportunity to regulate the different companies.
Because of this, to form a company in Dubai you will need to choose the correct license for your business.
Some of the activities that you can carry out with this type of license are the following:
· Architectural Consultants
· Artisan and Carpentry Activities
· Financial Advisors, Accountants, and Auditors
· Business Consultants
· Publishing and Printing
· Beauty Salons
· Management Consultancy
· Health and Medical services
· Entertainment Artists and Advertising Professionals
· Medical Representatives
· Internet and Web Design Services
· Technical Services
· Teachers and Educational Professors
· Auditing and Accounting Companies
· Information Technology Services
This list only describes the most common professional activities that require a Professional License.
If you want to see the complete list of activities that require a Professional License, you can visit the website of the Department of Economic Development or you can go in person to one of its offices.
However, the best option is to consult a business setup company, such as Connect Zone, to obtain all the information you need and correctly decide which license best suits the nature of your business.
Important to realize: Some professions add their name to the license, for example, if you decide to enter the education sector, it could be said that you have a Professional Educational License.
And if you decide to enter the world of engineering, you would have a Professional Engineer License in the UAE
Differences between a Professional License and a Commercial License
The formation of a company in the UAE becomes an impossible process if you do not acquire a Trade License.
As shown above, the type of license indicated for you will depend on the nature of your business.
And depending on this nature, you can choose between a Commercial License or a Professional License.
Some of the differences between these two licenses are the following:
· Commercial License: In this type of license, a foreign investor or an expat can legally own 49% of the total amount of the shares. And the rest, an UAE National will own it. However, in certain activities, the investor can maintain 100% of the company without the need for a local agent.
· Professional License: In this license, the investor can retain 100% ownership and can become the sale owner. However, they will need a Local Service Agent in the license.
· Commercial License: To start a commercial business, the minimum share capital required is AED 300,000, but this amount does not need to be deposited in the bank account, it is only for documentation.
· Professional License in Dubai: For this type of license the minimum amount required is AED 150,000, but this amount does not need to be deposited in the bank account, it is only for documentation.
· Commercial License: This type of license gives Limited Liability to companies, and will receive the suffix LLC. An UAE National and an expatriate will divide the ownership of the company.
· Professional License: The Liability of the companies with this license is unlimited, and can be a sole proprietorship or a civil company
· Commercial License: This license is for those companies that carry out any activity related to the commercialization of products and services. For example, Real Estate, Construction Companies, General Trading, Retail Companies, among others
· Professional License: This license is for any company that carries out activities related to the offer of professional services. These types of licenses are granted based on the individual’s educational qualification and area of expertise.
Government License Fees
· Commercial License: This license may cost around AED 12,000
· Professional License: The cost of this license may vary, however, the Professional License in Dubai cost is around AED 10,310
We can help you with the processes in the following government departments.