If you want to start the formation of your company in Dubai, one of the most attractive places when it comes to economic expansion opportunities for new investors, you must take into account the laws and regulations of the United Arab Emirates. In order for your company to operate legally and freely, you must first obtain a Trade License in Dubai.
In this article, you will find information about what is a Trade License, what are the types of trade licenses in Dubai, what documents do you need to apply for this type of license, what benefits can you get when applying for a Trade License and how we can help with the process of obtaining this license for your company.
- What is a Trade License?
- How many different types of trade licenses are there?
- Procedure to get a Trade License
- What are the necessary documents to obtain a Trade License?
- Dubai Trade License cost
- How is the Trade License renewal Dubai?
- Differences between the Offshore, Mainland, and Free Zone licenses
- Benefits of applying for a Trade License
- How can we help you get a Trade License in Dubai?
1. What is a Trade License?
A Trade License in Dubai is an official document issued by the Department of Economic Development (DED) that allows different companies to operate legally in the United Arab Emirates.
This license is valid for different activities in Dubai, such as the export and import of products and services and any commercial activity.
Companies established in a Dubai Free Zone can acquire one of these licenses, as can professionals who offer services related to the industrial area.
2. How many different types of trade licenses are there?
There are four main types of licenses, and each is intended for a different activity. These are the following:
2.1 Professional License
These licenses are for those individuals or entities that offer a professional service that depends on their physical and mental abilities to generate profit. The professional license allows entrepreneurs to maintain 100% ownership of the company.
2.2 Commercial License
The UAE Commercial License is an official document issued by the authorities of the United Arab Emirates addressed to those companies or organizations that carry out activities related to the trade of goods and services.
Some businesses, such as real estate companies, retail firms, transport companies, business enterprises, among others, must apply for this license.
It is important to realize that by obtaining this license, you can trade, export, and import products within the United Arab Emirates.
2.3 Industry License
In essence, this license is intended for those companies whose activities are based on the transformation of natural resources into the material to operate or finished products.
An industrial company has global access to its customers and requires a large number of resources and manpower to operate.
2.4 General License
This type of license is ideal for those startups that are interested in doing business with a single license. Entrepreneurs who have this license can take advantage of business opportunities in certain areas, such as frozen foods, beverages, medical supplies, among others.
3. Procedure to get a Trade License
The process to obtain your Trade License in Dubai is quite simple, all you have to do is follow these steps:
3.1 Choose a business name
The first procedure that you must carry out is the choice of the name of your company. You must make sure that this name complies with all UAE regulations, Therefore, it cannot be offensive or indecent and cannot be related to any religious deity.
At the same time, the name must be unique and cannot be registered by some other company.
3.2 Select a legal structure
To continue with the process of applying for your Trade license, you must choose the legal structure of your company. This step will define how your company operates and who is responsible for the company.
3.3 Define a business activity
Once the name of your business and the legal structure are ready, the next step is to decide the activity that your company will carry out.
Be sure to name all the activities on the license and keep in mind that each license is limited to 10 activities.
3.4 Complete the application form
The Department of Economic Development will give you a form that you must fill in with some basic information about yourself and your company.
Once completed, submit the form to DED and wait for initial approval.
3.5 Additional approvals
Some productive activities require the approval of other government entities. For this reason, you must carry out good research before completing the process of forming your company. Otherwise, there may be delays or they may even reject your license.
3.6 Get the necessary documents
Along with the form submitted to the DED, you must submit several documents to acquire your license. Gather the documents and make sure all the necessary signatures are present.
3.7 Select a business location
If you choose to establish your company in the Mainland, you will need a physical office. Once you choose the location, you must get a Tenancy Contract.
Ejari will be the entity in charge of certifying the contract and you must submit it with the rest of the documentation.
Also, if you want to know how to obtain a Trade License without office space, you can contact us.
3.8 Submit the application
When you have all the corresponding documentation and the location of your chosen office, you can submit your application to the Department of Economic Development to receive your Trade License.
3.9 Pay the fees
To apply for this type of license you need to make a payment of the issuance fee and for the license fee.
4. What are the necessary documents to obtain a Trade License?
The application process for a Trade License requires the submission of certain documents. To get started, you need to fill out the application for your trade license and make sure all managers sign it.
Also, you will need to create a Memorandum of Association (MoA) (preferably with the help of a legal representative). After this, you must make sure to put the company name approval to your application.
The DED will send the approval after accepting the name of your company. Lastly, all shareholders must submit copies of their passports.
Keep in mind that you must check the license application carefully to avoid any type of delays.
5. Dubai trade license cost
Before starting the process of applying for your Trade License, you need to know the cost you could pay. This will help organize your budget and prevent future confusion.
The Dubai Trade License cost will depend on the type of product or service you want to offer or the approvals you need to get. Other factors that may affect its cost are the following:
- Region of establishment
- Type of business activity
- Business Structures
- Number of business partners
- Partnerships with local sponsors
However, a Trade License in Dubai can cost anywhere from AED 15,000 to AED 50,000, generally speaking.
Also, remember that the cost of a Trade License in a Free Zone will be different from the cost of a Trade License in Mainland Dubai.
6. How is the Trade License renewal Dubai?
An important aspect of the Trade Licenses in the UAE is their validity. This type of license must be renewed every year if you want to continue operating legally in the United Arab Emirates.
Some of the steps you must follow to trade license renewal Dubai are the following:
6.1 Approvals
To start the process of renewing your license you need to receive the approvals of the relevant government entities. These approvals will depend on the activity carried out by your company.
For example, transport companies must acquire approval from Dubai’s Road and Transport Authority. If you want to speed up the process, it is recommended that you obtain approval before proceeding with the Trade License Renewal Dubai process.
6.2 Documents
In addition to written approval from the relevant authorities, companies must provide certain documentation, for example:
- A Tenancy Contract
- Certified Ejari
- Complete renewal form
- Photo of all business partners
- Payment number for renewal fees
- Approval and authorization letters
All the shareholders must submit these documents to the Department of Economic Development to obtain approval.
6.3 Tenancy Contract
Before following the Dubai Trade License Renewal, you must have your Tenancy Contract up to date. It must be valid for no less than three months from the date on which you applied for your trade license renewal.
7. Differences between the Offshore, Mainland, and Free Zone licenses
The Trade License you choose will depend on where you decide to establish your company. Whether you decide to establish an offshore company or a Free Zone Company, certain factors vary from location to location.
A Mainland License is intended for those companies that carry out their operations in Dubai Mainland. It requires approval of various government entities and is issued by the Department of Economic Development.
The Free Zone Trade Licenses are issued by the corresponding government authorities of each zone.
In this zone, there are different limitations and benefits, for example, you can enjoy 100% ownership and 0% corporate tax.
If you want to start an offshore company in Dubai, you will need an offshore corporation certificate. Also, these types of companies cannot carry out commercial activities within the UAE.
8. Benefits of applying for a Trade License
Currently, there are multiple benefits in acquiring a Trade License in Dubai, for this reason, many entrepreneurs decide to set up branches or organizations in the United Arab Emirates. Some of the benefits you can enjoy are the following:
8.1 Improve credibility
It is common to see that many companies decide to try to go the easy way and skip some rules to get higher profits. However, those companies that decide to take the time to build their brand and follow the UAE regulations, earn the trust and preference of customers.
In addition, having a trade license increases your company’s exposure in the market, which increases confidence in your business and your product.
8.2 Few trade restrictions
One of the reasons why Dubai is so attractive to foreign investors is the few restrictions that exist when trading. As long as your products are registered in the license, you will not have to worry about any restrictions.
8.3 Promotes international and local trade
By having a Trade License, you have many opportunities to import and manufacture products. You can trade them in the local Dubai market or you can send them abroad and generate profits from other countries.
Also, this license allows you to re-export your own goods, which increases your company’s ability to trade services and products around the world.
8.4 Tax benefits
In the year 2021, more than 90,000 people decided to move to Dubai, this was with the motivation of being able to enjoy tax incentives. While most countries require investors to pay large amounts of money in taxes, Dubai remains an almost tax-free region.
In this way, new investors can generate additional revenue.
9. How can we help you get a Trade License in Dubai?
Obtaining a Trade License in Dubai is the starting point for any entrepreneur who wants to succeed in the United Arab Emirates. However, if you are not familiar with the company formation process and the different laws of the UAE, the process may take longer than usual. For this reason, Connect Zone is the ideal partner to help you with everything you need.
We are your trusted agency that will take care of all the paperwork for your Trade License application, we will advise you to make the right decisions and additionally, we can help you choose a place for your office in one of the best list of business centers in Dubai.
Do you want to know more about how to acquire a business license in Dubai? You can send us an email to contact@connectzone.ae where one of our representatives will answer all your questions.
Also, if you would like to apply for a job in our agency, you can submit your CV to thetalentpoint.com or you can send an email to the following address contact@thetalentpoint.com. The Talent Point does not store data sent via email or share it with third-parties.
