Differences between the professional license and the commercial license

professional license and the commercial license.

Starting a business in the United Arab Emirates is a fairly simple process. However, it is necessary that you comply all the regulations that the country has. Depending on the activity you want to carry out in the UAE, you must choose between several types of licenses to be able to operate legally, these can be: Professional, commercial, industrial, or a tourism license. Today, we will talk about the difference between the professional license and the commercial license.

In this article, you will find information about what these licenses are, who can acquire them, what is the difference between the professional license and the commercial license, and more. Let us see:

  1. What is the DED professional license?
  2. Who can acquire this license?
  3. Benefits of the DED professional license
  4. What is a UAE commercial license?
  5. Who can acquire a UAE commercial license?
  6. Benefits of the commercial license
  7. How to obtain these licenses?
  8. Differences between the professional license and the commercial license
  9. How can we help you obtain a license in the UAE?

1. What is the DED professional license?

A professional license is an official document of the United Arab Emirates and is authorized by the Department of Economic Development (DED). It was created for those individuals interested in offering a professional service based on some physical or mental ability that allows them to generate an income.

Some of the industries where you can generate income with this license are the following:

2. Who can acquire this license?

Those professionals who offer services such as designing, tourism guidance, research, or any other service based on experience, talent, or ability, must apply for one of these licenses at the Department of Economic Development (DED).

By having a professional license, you can legally operate and offer your services to anyone in the UAE. And also, you have the power to undertake the activities depending on your qualifications or your area of ​​expertise.

Take into account that dedicating yourself to a professional service requires skills, intellectual abilities, talent, and experience to carry out certain projects and tasks. And meet the expectations and quality margins of the country’s authorities and your customers.

It must be remembered that even if the professional license allows you to run a large number of services, certain tasks will require authorization or approval from other authorities. These authorities are established in each Emirate of the country and their objective is to maintain security, reinforce rules, manage industry standards and ensure that services are only offered by authorized professionals who are governed by the laws defined by the corresponding Ministry.

3. Benefits of the DED professional license

3.1 Diversity of activities

This type of license is not exclusive to a group of companies or businesses. On the contrary, it offers great diversity when choosing which activity you want to do. The list of activities offered by the DED increases every day, which is why more people are inclined to acquire a professional license.

If you are a new entrepreneur and you have an idea to form a company, it is most likely that your idea is on the list of activities accepted by the authorities. You should keep in mind that even if the authority accepts an activity, you still need to go through the approval process.

For example, if you want to offer training services, your company must have the necessary materials, such as whiteboards, screens, projectors, among others. And enough space to carry out the training process.

3.2 Cost-effective approach

Purchasing a professional license will be very helpful if you want to save money in the long run. This license will allow you to establish your company in any area of ​​Dubai and the United Arab Emirates, which means zero ties to any special authority. Basically, you will have the freedom of a Limited Liability Company.

In addition to this, many businesses that are just starting see co-working spaces as a viable option. This will allow them to have an efficient work area while minimizing the costs of running a company. Currently, the market fee when renting an office is 2.5 percent, which makes this option the cheapest.

3.3 Adaptable market

This license allows entrepreneurs to maintain 100% ownership of their company when carrying out commercial activities in the UAE. Also, you can carry out your daily operations without needing the presence of a local shareholding party.

In addition to this, with this license, you can do business with different clients, in different markets. You will be able to offer your services and to make contract with other companies as well (this includes educational institutions and government-related agencies)

4. What is a UAE commercial license?

Basically, a commercial license is an official document that allows you to trade almost any product you can imagine. From toys and jewelry to electronics, food, and packaging. Also, you can trade services under a commercial license, for example, brokerage and real estate services.

This license is issued by the Department of Economic Development and the products you trade may be exported for sale outside the UAE, imported and sold in the country, or traded solely within the United Arab Emirates.

5. Who can acquire a UAE commercial license?

Obtaining this license means being able to work in different sectors of the economy, for example:

  • Auto trading
  • Import/export
  • Self storage services
  • General store
  • Rental services
  • General warehousing
  • Restaurant management
  • Tv station, radio, cinema theater equipment installation and maintenance
  • Shoe trading
  • Plumbing and sanitary contracting

These are some of the activities that individuals in the United Arab Emirates can do. However, you can see the full list of permitted activities at the Department of Economic Development, or you can check with a company setup specialist, such as Connect Zone.

6. Benefits of the commercial license

Some entrepreneurs are unaware that having a commercial license can bring multiple personal and corporate benefits. Some of these are the following:

  • If you decide to establish a company in a free zone and acquire this license, you will be able to enjoy unique incentives from that zone. For example, tax exemptions and free repatriation of income to the entrepreneur’s home country.
  • Companies applying for this license are free to establish their headquarters in any part of Dubai.
  • With the commerce license you can import and export a wide variety of products.
  • Having this document makes it easier to obtain work visas for foreign nationals.
  • Companies that have this license will not have to carry out audits to extend their licenses.

Commercial licenses allow entrepreneurs who established their company in the United Arab Emirates to carry out their operations and sell services and products throughout the country as well as internationally. One of the lesser-known aspects of this document is that it facilitates international employee visa admission. In this way, businesses can recruit a greater number of foreign workers.

7. How to obtain these licenses?

The process to acquire these licenses is quite simple and consists of the following steps:

7.1 Mainland or Free Zone

One of the most important decisions you have to make is the location of your company. Both options offer incentives unique to the area. For example, at Fujairah Creative Zone you can enjoy a quick incorporation setup and zero currency restrictions.

There are several types of licenses in the free zones, for example, industrial, commercial, professional, and e-commerce services. On the other hand, you will also find a wide variety of licenses on the Mainland. Companies established here can do business directly with the UAE market and enter into lucrative contracts with the government.

The right setup for you will depend on the nature of your company. A business formation expert, like Connect Zone, can help you make this decision.

7.2 Your company name

Choosing the name of your company is extremely important when registering a UAE business. For this reason, there are certain conditions that you must take into account before choosing the name. Firstly, the name must be governed by the moral values ​​of the United Arab Emirates society, secondly, it cannot be registered by another company or organization and thirdly, it cannot have any type of relationship with any government entity or religious deity.

7.3 License application

Once you have chosen the place, the name, and the type of productive activity of your company, it is time to apply for your license. To do so you must submit some documents and deliver them to the Department of Economic Development on the Mainland. On the other hand, if you decided to establish your company in a free zone, then you should approach the relevant authority in that zone.

In any case, it is always a good idea to have the services of a company formation specialist at this stage to ensure a successful outcome.

7.4 Required documents

Whether you are carrying out the application process on your own or through a company formation agent, the documents that you must deliver to the authorities are the following:

  • Memorandum of Association (MoA)
  • Duly filled application form.
  • Fee-receipt.
  • Permit from Dubai Municipality’s Building Department allowing the business to use the office space as a business address.
  • Passport copies of the shareholders
  • Original lease contract of the company’s register address

8. Differences between the professional license and the commercial license

8.1 Commercial license

As shown above, the commercial license allows a company to carry out trading activities. It is the most basic license available and covers a wide variety of tangible and available commodities such as real estate, hardware, general trading, clothes, construction, etc.

A commercial license is used by those companies that want to have more than ten commercial activities in a single license. Foreign entrepreneurs who have this license can only own 49% of the shares of the company on the Mainland. Also, the company has limited liability, which means that it obtains the suffix LLC.

From a strategic point of view, this license has multiple benefits, including tax benefits (low VAT, zero corporate and income tax), visa allocation for employees and their dependents, and also a supportive business ecosystem and international trading scene.

In Dubai, the minimum paid-up capital for a commercial license is AED 300,000

8.2 Professional license

Meanwhile, the professional license is more aimed at those individuals whose goal is certain special practices that fit into their educational attainment and craftsmanship. This license is service-oriented, which means that the same individuals provide the service. Customers pay for their craft because they have the experience to do it or because they have a license.

Contrary to a commercial license, foreign entrepreneurs can maintain 100% ownership of their company under a professional license. Also, the owner or professional has unlimited liability on the company. This is a main difference between the professional license and the commercial license.

If an entrepreneur wants to engage in consultancy activities, they must acquire a professional license. However, if a professional want to trade products or goods that they have made, they must then obtain a commercial license.

By having this type of license, the professional must pay a fixed annual fee for their license. Also, the official regulations of the United Arab Emirates require that the entrepreneur be completely transparent when dealing with clients. Moreover, they are eligible to apply for a residence visa in the UAE.

The minimum paid-up capital for a professional license is AED 150,000.

Although the difference between the professional license and the commercial license is notorious, both are very effective when it comes to establishing a business. If you want to succeed in this country, choosing a license that suits the essence of your company is the most important thing.

9. How can we help you obtain a license in the UAE?

With more than twenty years of experience, we have helped hundreds of clients to successfully establish their companies. We are the ideal partner to guide you through each step of this process.

At Connect Zone, we will take care of applying for the perfect license for your business model. Also, with us, your visa processing will be easy and safe. Additionally, we help you choose a place for your office in one of the best business centers.

Are you interested in learning more about us and the services we offer? You can contact us at the following number +971 43 316 688 or by writing an email to contact@connectzone.ae. Where one of our representatives will assist you shortly.

If you want to work with us or apply for a wide range of job opportunities, you can start sending applications through thetalentpoint.com. You can also send an email with your resume attached to contact@thetalentpoint.com. You do not have to worry; we will not save or share your information.

How to obtain a professional license in the UAE?

professional license in the UAE

Before starting the process of forming your company, you need to take into account all the procedures and requirements that you must have in order to carry out any commercial activity in the United Arab Emirates. Depending on the type of your company, you can choose between four types of licenses (professional, commercial, industrial and general trading). Today, you will get to understand the professional license in UAE in depth.

In this article, you will find information about what a professional license in the UAE is, how to acquire this type of license, what documents are necessary to acquire it, who needs this license, and also how we can help you obtain one.

  1. What is a professional license in the UAE?
  2. Characteristics of a professional license
  3. What is the process of obtaining it?
  4. Step by step to get a professional license
  5. What are the necessary documents?
  6. How much is the cost of a DED professional license?
  7. The license renewal process
  8. Who needs a professional license?
  9. professional license activities
  10. Benefits of a professional license
  11. How can we help you get your professional license?

1. What is a professional license in the UAE?

Firstly, a Professional License in UAE is an official document issued by the Department of Economic Development (DED) for those entrepreneurs who carry out professional activities that depend on their mental and physical abilities to generate income.

These can be, for example, artists, designers, business services providers, auditors, accountants, engineering consultants, among others.

However, the company must belong to a single person to obtain the DED Professional License. If, on the contrary, the company belongs to more than one person, then the organization will be considered a civil corporation.

2. Characteristics of a professional license

This type of license is the only one that allows expatriates to retain 100% ownership of their company in the United Arab Emirates. However, in order to achieve this, you must hire an Emirati citizen to be your local agent.

This agent will not have any direct relationship with your business nor will it interfere, his role will be based on assisting you in the process of applying for your license and will handle the necessary legal procedures. You must keep in mind that this agent will not be responsible for any debt that your company may acquire.

3.  What is the process of obtaining it?

Before starting the application process for your license, you must make a clear description of the productive activities of your company. Then, search for a local service agent to carry out all the legal procedures for your company.

Finally, get the initial approval from the Department of Economic Development, present the name chosen for your company and submit all the required documents to the DED to get the approval.

4.  Step by step to get a professional license

The detailed steps to get your Professional License in UAE are the following:

4.1 Local service agreement

You must make the local service agreement with a UAE National and translate it with an official translator. Once translated, you must certify the agreement in a public notary.

Also, keep in mind that if you make the agreement in Arabic, then the entire translation process is not necessary.

4.2 Memorandum of Association (MoA)

The MoA is an official document that describes the data of the company and the data of the shareholders. You must complete the MoA with your local agent and you must include the sponsor’s early fee in the agreement.

4.3 Civil Company

If you are applying for a civil company license, then you will need to fill out another application form and certify it.

4.4 Public Notary

All partners involved in the creation of the company must go to a public notary and sign the agreement.

4.5 Approvals

To continue the process, you must get approval from Dubai’s Municipality for the Tenancy Contract.

4.6 Submit the documents

The shareholders must submit all the forms (duly certified and with a copy of each one), the passports of each partner, and the No Objection Certificate for an expatriate partner (if any).

4.7 Pay the fees

Make the payment for the entire process and receive your license, the DED will give you a payment voucher at the same time.

5. What are the necessary documents?

The necessary documents for the application of your Professional License in Dubai and  UAE are the following:

  • The application form duly filled out
  • Copy of the local partner’s naturalization book
  • Visitor’s visa of the foreign shareholders
  • A No Objection Certificate from the local agents of the foreign shareholders if the expatriate has an employment visa. If the shareholder has a visitor’s visa, then their ID number is needed.
  • The initial approval of the relevant government authorities depends on the productive activity of your company. For example, Dubai’s Municipality, Road and Transport Authority, National Media Council, among others.

5.1 Necessary documents to submit to Tenancy Contract

  • Rental contract
  • Ejari registration
  • Name reservation certificate
  • Initial approval from the DED
  • A prescribed application form (BR1 form)

6. How much is a DED professional license?

Generally, the Professional License costs AED 10,310 and includes the following:

  • Administrative Services fee
  • Trade Name Fees
  • Professional License Fees
  • Local Agents Feel
  • Market Fees
  • Local fees
  • Government cultural fees

Additionally, it is important to realize that a shareholder in a Professional License (civil) company must pay an amount of AED 20,000 as a security deposit.

If a person decides to apply for the license without a partner, then they must pay the amount of AED 10,000 as a security deposit. Please note that the cost of the Professional License may vary from time to time.

7. The license renewal process

Depending on the productive activity of your company and the economic jurisdiction to which it belongs, you must approach the relevant government authorities and renew your license every year. The shareholders must submit the necessary documents and make the payment of the License Renewal Fee to the authorities.

The steps you must follow to renew your Professional License in UAE are the following:

  • Keep your tenancy contract up to date, it must be valid for at least 3 months from the date of the renewal application (It is recommended that you renew the tenancy contract before carrying out the renewal process for your license)
  • Get the approval of the relevant authorities to receive the renewal.
  • For a Professionals License, it is not necessary to get extra approvals from additional authorities.
  • Submit the Ejari certificate, the valid tenancy contract, the renewal form duly filled out, and also any other documentation requested by the Department of Economic Development.
  • Make the payment through the relevant channels and receive your renewed trade license.
  • Receive the payment voucher and the transaction number.

8.  Who needs a professional license?

Those interested in offering professional services such as Tourism guidance, auditing, designing, consulting, accounting, research, or any other activity related to skills, talent, or experiences, must acquire a Professional License if they want to work in the UAE.

By holding a Professional License, you are legally authorized to work and offer your services to any client, employer, or customer in the United Arab Emirates. Also, you have the right to carry out activities according to your area of ​​expertise and qualifications.

Offering professional services requires experience, skills, and talent to carry out certain activities that meet the quality standards established by the government entities of the United Arab Emirates and by your own company.

Although the Professional License in UAE covers a large number of activities, certain activities require additional approval or authorization from certain government agencies.

These agencies are established with the objective of managing and regulating industry standards, maintaining health and safety, and also ensuring that services are only offered by authorized professionals who adhere to the compliances and regulations of the respective ministry.

9. Professional license activities

Any person who decides to start a commercial or business activity will need a Professional License. The Department of Economic Development has created an administrative system that separates licenses into categories. Consequently, this allows a better opportunity at regulatory and constructive facilities.

Some of the activities that you can do with a professional license are the following:

  • Teachers and educational professors
  • Lawyers and legal advisors
  • Accountants, financial advisors, and auditors
  • Technical services
  • Medical representatives
  • Business consultants
  • Printing and publishing
  • Consultancy services
  • Carpentry and artisan activities
  • Management consultancy
  • Architectural consultants
  • Entertainment artists
  • Advertising professionals
  • Technology services
  • Beauty salons
  • Repair services
  • Educational training services

Only the most common activities that need a DED Professional License appear in this list. If you are interested in seeing the complete list of activities that require this type of license, you can always go in person to the offices of the Department of Economic Development or you can check their website.

However, it will always be a better option to hire a business setup company or a business consultant, such as Connect Zone, to gather all the information you need and help you choose which license best suits your business needs.

10. Benefits of a professional license

Possessing one of these licenses brings with it multiple benefits, some of which are the following:

10.1 Cost-effectiveness

Possessing one of these licenses will allow you to save money in the long term since you will be able to establish the offices of your company in any part of Dubai, which neutralizes the ties with any lease contract or with any authority. In this way, you can enjoy the freedoms of a Limited Liability Company (LLC)

Most startups decide to use serviced offices or co-working offices to have enough time to get their licenses. This will allow new businesses to have easy access to the workplace while reducing the high costs of forming a company.

The current market fee is 2.5 percent, which makes this option the cheapest.

10.2 A large number of activities

This type of license is not aimed at a select group of activities or businesses, on the contrary, it covers various sectors. Day by day, the list of activities under the DED Professional License increases, which greatly facilitates obtaining this license.

If you are interested in starting a company, there is a high probability that the business idea you have is already supported by the government entity that is in charge of delivering the Professional Licenses.

10.3 Foreign companies involvement and an adaptable market

As mentioned above, this type of license allows shareholders to maintain 100% ownership of their companies in Dubai. Another key point is that you can maintain the daily operations of your company without the need to use a local shareholding party, which is sponsored and made up of mostly UAE citizens.

In addition, with the help of this license, you will have the opportunity to meet, invest and trade in different places and with different clients. You will also be able to offer services to your clients and achieve important contracts with other companies.

Note that this includes those agencies that have ties to the UAE government and other educational institutions.

11. How can we help you get your professional license?

Going from being a novice entrepreneur to a successful businessman is the dream of every person who decides to invest in Dubai.

Over the last few years, the United Arab Emirates has become the quintessential region for job opportunities, and every month hundreds of people take the risk of starting a business. However, they do not go through this process alone, investors often hire specialized company formation agencies, such as Connect Zone, to guide them through the process.

At Connect Zone, we will be your trusted link with government entities. We will take care of being your local agent to carry out all the necessary paperwork and we can even help you find a list of business centers in Dubai for your offices.

Do you want to know more about us and the Professional License in the UAE? You can contact the following email: contact@connectzone.ae. Then, one of our advisers will answer all your concerns.

Also, if you would like to obtain a job in our firm, go to thetalentpoint.com and submit your application. In addition, you can contact the following email contact@thetalentpoint.com and send us your CV. We keep your information safe, as we do not store it or share it.