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Trade License Dubai: A Comprehensive Guide!

If you want to set up a business and take benefit of the business-friendly environment of Dubai, you must get a trade license as per your business requirements. It is the first and mandatory step for entrepreneurs to get approval for their business operations in Dubai.

Business License In Dubai: Costs & Process To Get!

Adnan Ahmed

In 2024, the UAE had registered 1.021 million companies, a 152% growth over the past four years, according to data from the UAE’s National Economic Register. In these statistics, Dubai makes a great contribution. In just the first half of 2023, the newly registered businesses in Dubai increased by 23%, with the Dubai Chamber of Commerce issuing 357,000 certificates.

This increase in license registration represents Dubai’s growing entrepreneurial landscape and the importance of the legal values of the licensing process. In this article, we explain all the aspects of trade licenses, including various types of licenses available, factors to consider when selecting one, the step-by-step application process, the estimated cost, benefits, renewal procedures, and the timeline for approval.

What Is a Trade License In Dubai?

This license is issued by the UAE’s Department of Economic Development (DED) or the governing authority of a Dubai Free Zone, depending on where you establish your company. This official document not only legitimizes your business but also ensures you follow local regulations, keeping your business safe from legal issues.

Types of Trade Licenses Offered:

It is important to understand the different types of trade licenses in Dubai, as each type is designed for particular business activities. You need a separate trade license for each business activity; however, a general trading license is a great option if you plan to engage in several activities at the same time.

The following are the main types of trade licenses in Dubai:

1. Professional License

A professional license is issued to individuals or entities offering specialized services. This includes consultancy firms, legal advisory services, medical practices, and other professional fields.

This license ensures that professionals can legally provide their expertise while adhering to Dubai’s regulations. Holders of this license are required to have relevant qualifications, certifications, or experience in their respective fields.

2. Commercial License

A commercial license is a requirement for businesses that are involved in trading activities. With this license, companies are allowed to buy, sell, and distribute goods within local and international markets. This license covers both general trading and specialized trading sectors, making it suitable for wholesalers, retailers, and import/export businesses.

In addition to this, a company with a commercial license can make business-to-business (B2B) and business-to-consumer (B2C) transactions.

3. Industrial License

An industrial license is a requirement for businesses involved in manufacturing or industrial activities. It is a mandatory requirement for factories, production units, and businesses involved in assembling and packaging.

Companies with this license also need to comply with environmental and safety regulations, as well as obtain specific permits related to production processes, storage, and waste management.

4. General Trading License

A general trading License provides businesses the flexibility to trade in a wide range of activities under a single license. It simplifies operations for companies that deal with multiple product categories and allows them to operate across various industries.

This license is an ideal option for businesses that import and export different products without being restricted to a specific category. However, some restricted or regulated goods, such as pharmaceuticals or chemicals, may require additional approvals.

5. Tourism License

A tourism license is mandatory for businesses operating in the travel and tourism sector. This includes travel agencies, tour operators, hospitality service providers, and event management companies serving the tourism industry.

Businesses under the tourism license require additional certifications, such as approvals from the Department of Tourism and Commerce Marketing (DTCM).

6. Freelance Permit

A freelance permit is designed for independent professionals who want to conduct business activities without establishing a full-fledged company. Freelancers in different fields, such as media, technology, and creative industries, need this permit for their operations.

This license offers flexibility while ensuring legal compliance. Freelancers with this permit can work with multiple clients, invoice legally, and even access coworking spaces under business hubs and Free Zones.

7. E-Commerce License

With the growth of online businesses, an e-commerce license has become significant for companies engaged in selling goods and services through digital platforms. With this license, businesses can be involved in drop shipping and direct-to-consumer sales.

Companies holding this license must comply with online business regulations, including data protection laws, payment gateway integration, and customer protection policies.

8. Branch Office License

A branch office license allows foreign companies to establish a branch in Dubai while maintaining their legal ties to the parent company. With this license, international businesses can expand their operations in Dubai without having a separate legal entity.

A branch office can engage in activities similar to those of its parent company but must operate under the regulations set by the Dubai Department of Economic Development (DED). It can benefit from Dubai’s strategic location for regional business expansion.

9. Real Estate Brokerage License

A real estate brokerage license is a requirement for businesses involved in buying, selling, leasing, or managing real estate on behalf of clients. It is a mandatory requirement for real estate agencies, property consultants, and brokerage firms operating in the market.

Companies with this license must comply with real estate laws and ethical guidelines, as well as obtain specific permits related to property transactions, client representation, and regulatory compliance.

How To Choose Right Business License In Dubai?

The success of your business in Dubai greatly relies on choosing the right business license that meets your business requirements. The following are important factors to be considered while choosing a business license in Dubai to ensure legal compliance and smooth operations of your business:

1. Nature of Business Activity

The first factor in choosing the business license is the nature or type of business activity that determines the suitable license category. As discussed above, a consultancy firm requires a professional license, while a retail business needs a commercial license.

Similarly, manufacturing businesses need an industrial license, whereas travel agencies must obtain a tourism license. The correct business models help you choose the correct license and avoid legal issues.

2. Legal Structure

The second factor is the legal structure of your business, which influences its licensing requirements. The following are the legal structures which are allowed in Dubai for businesses of different categories:

Sole Proprietorship: This legal structure is the best for individuals who want full control and operate under their name. It is common for professionals like consultants and freelancers.

Partnership: This legal structure is suitable for two or more individuals who want to share ownership and profits in a single company. It requires a legal agreement between partners.

Limited Liability Company (LLC): It is a widely used business structure in Dubai that allows multiple shareholders to have limited liability. It provides flexibility for various business activities.

Branch Office: This business structure allows foreign companies to expand operations in Dubai without forming a new entity. The branch company with this structure must conduct activities similar to those of its parent company.

3. Location of Business

The location of a business matters a lot in its operation because different locations have different rules and regulations. Choosing the right place, as given below, helps the business operate and follow the laws accordingly:

Mainland License: It allows companies to operate anywhere in Dubai and trade freely with the local market. Some businesses on the mainland require a 51% local sponsor, but certain professional activities permit 100% foreign ownership.

Free Zone License: It provides 100% foreign ownership, tax benefits, and easy setup within designated Free Zones. However, direct trade with the mainland of Dubai may require a local distributor or agent.

Offshore License: You can choose offshore as a business location for holding assets, international trade, or financial activities without a physical presence in Dubai. Offshore companies cannot conduct business within the local market of Dubai.

How To Get a Trade License In Dubai: Step By Step Guide!

The following is the step-by-step process to get a trade license in Dubai according to your business requirements and chosen business activities:

Step 1: Decide on Business Activities

In the first step, you should decide on business activities for your business in Dubai according to your business operations. Your trade license greatly relies on your business activities. Dubai offers different license options, as discussed above, for different activities.

Step 2: Choose the Legal Structure

In the second step, you need to choose one of the above-listed legal structures for your business. The legal structure determines ownership, liability, and compliance requirements.

In Dubai, most of the Free Zones allow only specific types of company structures, such as Free Zone Establishments (FZE) or Free Zone Companies (FZCO).

Step 3: Select a Business Name

In the third step, you must select a distinguished name for your business that is not already registered with DED. The name should follow UAE’s naming rules, and it should not match any existing registered company names. Also, you must register this business name with the Department of Economic Development (DED).

Step 4: Find a Local Sponsor (If Required)

In the fourth step, if you are setting up a mainland company, you may need a local sponsor for certain industries like banking, insurance, healthcare, education, and oil & gas. A UAE national or a UAE-based company acts as your local sponsor, depending on the business activity and structure.

However, according to Federal Decree-Law No. 32, most business categories now allow 100% foreign ownership on the mainland. While there is no local sponsor required for Free Zone companies, allowing them 100% foreign ownership.

Step 5: Secure Office Space

In the fifth step, you need to secure a physical office or commercial space for your business in Dubai. The Dubai Economic Department (DED) mandates businesses to submit a tenancy contract or Ejari (rental agreement). The office space must align with the intended business activities. In some cases, virtual offices might be acceptable for your business in Dubai.

Step 6: Prepare the Required Documents

In the sixth step, you need to gather the following required documents for the trade license in Dubai:

Passport copies of owners and partners
Emirate IDs
Business name reservation certificate
Memorandum of Association (MOA)
Lease agreement for office space
Approvals from relevant authorities (if needed)

In some cases, you may require additional documents from the DED according to your business type and chosen activities.

Step 7: Submit the Trade License Application

You can submit the trade license application to the DED or the Free Zone authority when all the required documents are prepared. However, in this step, you should carefully check that all the information and documents are accurate and authentic to avoid delays in processing.

Step 8: Pay the Fees

In the eighth step, you need to pay the necessary fees for trade name registration, initial approval, and the trade license. Some additional charges may apply for specific business activities. The fee structure depends on the license type and the business’s location.

Step 9: Application Review

The DED or Free Zone Authority will review your application after successful submission. This process may take a few days to several weeks, depending on the business type and required approvals. Meanwhile, some additional information may be required, and authorities may request clarifications from you.

Step 10: Issue a Trade License

In this step, the trade license is issued once the trade license application is approved. Now, your business is officially registered and can legally operate in Dubai. You will also receive the company registration documents.

Step 11: Apply for Visas (If Needed)

In this step, you can apply for a visa for yourself or your employees, which includes fulfilling the requirements of medical tests, Emirates ID registration, and labor approvals.

Step 12: Meet Compliance Requirements

In the last step, you should confirm that your businesses meet all the compliance requirements as per Dubai’s regulations. You should renew your trade license annually to avoid penalties.

By following the above steps, you can successfully obtain your trade license and start your business in Dubai. For expert guidance and an easy setup process, you should hire business setup experts at Now Consultant.

Cost of Getting a Business License In Dubai

The cost of getting a business license in Dubai depends on the given factors. By counting all the given factors, a trade license cost in Dubai varies between AED 15,000 to AED 50,000.

License Type:

The cost of a license is different for different types of licenses. For example, a general trading license is more expensive than other license options because it covers more activities than other licenses.

Business Location:

A selected business location (Mainland or Free Zone or Offshore) also impacts the cost of a trade license. The cost of a trade license in a Free Zone location is comparatively lower than that of the mainland location.

Company Structure:

The legal structure of a business, such as a sole proprietorship, partnership, LLC, or Free Zone Establishment (FZE), also affects the cost. Some of the structures require additional fees for approvals or local sponsorship.

Business Activities:

Business activities also impact the overall cost of business setup in Dubai because certain business activities require extra permits or government approvals. In this way, it affects the overall cost.

Number of Partners and Employees:

The number of partners, shareholders, and employees influences visa fees, medical checkups, and other operational costs. So, a larger company setup may have higher costs.

Local Sponsors:

In some cases, mainland businesses require a local sponsor, which adds a value to the total cost of the business license.

Associated Costs:

In addition to the trade license fee, other costs are associated with obtaining a trade license in Dubai. These include:

Trade name reservation fee
Commercial activity fees
Local sponsorship fee (if applicable)
Office space rent
Renewal fees
Visa fees (if applicable)
Additional fees for regulatory compliance (safety inspections, environmental permits, etc.)
Third-party fees (legal consultations, notary charges, etc.)

For an accurate estimation of your trade license fee, including additional costs, you should consult with our experts.

Benefits of Having a Trade License In Dubai:

Dubai offers the following benefits to businesses having a valid trade license:

1. Legal Compliance and Credibility

With the trade license, your business has legal recognition to operate in Dubai. It also builds credibility, making it easier to gain the trust of customers, business partners, and government bodies.

2. Access to International Market

Dubai serves as a gateway to access international markets. Its strong logistics network and transport hubs provide businesses with excellent trade opportunities.

3. Tax Benefits

With the recent regulations, Dubai provides significant tax benefits, including no personal or corporate income tax for the ease of doing business. Free Zone trade license also provides 100% tax exemptions on import and export duties, making it a cost-effective place to operate.

4. 100% Foreign Ownership

Depending on the business activity and license type, Dubai allows 100% foreign ownership in various Fee Zones. With this, businesses do not need any local sponsor, as it gives full control to business owners.

5. Flexible Trade License

Dubai offers different types of trade licenses suited to various industries, locations, and business structures. With this flexibility, entrepreneurs can choose the most suitable business setup according to their specific requirements.

6. Easy Business Setup Process

The business setup process in Dubai has become very easy and simple due to the business-friendly regulations of the Dubai government. Having the necessary documents prepared in time, entrepreneurs can obtain a trade license and start their business operations within a few weeks.

7. Supportive Government Initiatives

With the introduction of the recent regulations, Dubai’s government has taken initiatives to encourage foreign investment and support local businesses. Having a trade license ensures eligibility for these programs.

8. Sponsoring Employees and Dependents

A trade license allows business owners to sponsor employees, family members, and dependents for residency visas.

9. Financing and Investment Opportunities

Dubai has a strong banking sector that provides businesses with access to loans, financial services, and investment opportunities to support business growth.

How To Renew Your Trade License?

To continue the operations, businesses must renew their trade license annually. Timely renewal helps avoid penalties and disruptions. The following is the renewal process for a trade license in Dubai:

1. Check Renewal Requirements

First, you need to review the expiry date of your trade license and ensure all compliance requirements are met. This includes renewing your office lease, clearing outstanding fees, and obtaining necessary government approvals.

2. Gather Required Documents

Second, you need to prepare all necessary documents, including:

Valid tenancy contract (Ejari)
Copy of the current trade license
Passport copies of shareholders and managers
Trade name reservation fee receipt
Business Registration (BR/1) Form
Rental contract registration certificate
Receipts for renewal fee payments

3. Submit the Renewal Application

Third, based on your business location (Mainland, Free Zone, or Offshore), you must submit the renewal request to the appropriate authority, such as the DED or the respective Free Zone Authority.

4. Pay the Renewal Fees

Fourth, you should pay the renewal fee depending on the business type, location, and for any additional approvals. You need to ensure that all outstanding fines or dues are cleared before proceeding with the renewal.

5. Medical Test and Emirates ID Renewal (If Required)

If your visa also requires renewal, you may need to undergo a medical checkup and renew your Emirates ID before completing the license renewal process.

6. Receive the Renewed License

You will receive the renewed trade license once all documents are verified and fees are paid. After receiving the renewed trade license, you should check that all details on the license are correct and in compliance with the regulatory requirements.

6. Update Business Details

After completion of the renewal process, you need to update your business details with banks, suppliers, and relevant authorities to reflect the new expiration date.

By following these steps, businesses in Dubai can renew their trade licenses easily and continue their operations without any legal issues.

How Long Does It Take to Get a Trade License In Dubai?

The time required to complete and get a trade license varies according to the chosen business structure and the preparation of required documents. On average, the time required for completion of a trade license is:

Mainland License is issued within 5 days to 4 weeks.
Free Zone License can be obtained in 4 days to 3 weeks.

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How We Can Help You?

It may be challenging for you to obtain a trade license in Dubai because each step requires careful consideration. Any missteps without expert guidance can lead to delays, fines, or even rejection of your application. For the right guidance, you can hire experts at Now Consultant to simplify the entire licensing process for you.

Our business setup experts help you at every step, from trade name registration and obtaining approvals from relevant authorities to securing the required permits and ensuring timely license renewals. With our support, you can meet all the legal requirements to avoid costly mistakes, penalties, and unnecessary delays.

Frequently Asked Questions

Do I Need a License to Start a Small Business In Dubai?

Yes, it is mandatory to obtain a business license to operate any business in Dubai legally. A small business also needs a trade license of a specific type, depending on its business activities. Operating your business without a valid license can lead to legal penalties and fines.

What is the Difference Between a Trade License and a Business License?

In Dubai, the terms “trade license” and “business license” are the same thing that often used interchangeably. Both are used for the official documents issued by the Department of Economic Development (DED) that permit a business to conduct activities within the UAE.

Can I Operate an Online Business Without a Trade License?

Operating an online business in Dubai without a valid trade license is considered illegal. All businesses, including e-commerce platforms, must obtain the appropriate trade license, and failure to do so can result in fines, business closure, or other legal actions.

What is the Cheapest Business License in Dubai?

The cheapest business license is offered by the IFZA Free Zone in Dubai. The cost of this license in Dubai varies with factors such as business structure, location, and business activities.

How Can Foreigners Get a Commercial License in Dubai?

Foreigners can obtain a commercial license by choosing a business activity, registering a trade name, and applying through the DED. They must submit the required documents, secure a business location, and pay the necessary fees.

Can I Change My Business License Type After Registration?

Yes, it is possible to change your business license type after registration in Dubai. This process involves applying for a modification with the relevant authorities, updating your business activities, and paying any associated fees.

Yes, in the mainland setup, you may need a local sponsor for certain industries like banking, insurance, healthcare, education, and oil & gas. However, the recent regulatory changes allow 100% foreign ownership to all businesses in Dubai except for a few on the mainland.

Does a Dubai Business License Include a Visa?

No, a Dubai business license does not automatically include a visa. However, entrepreneurs and stakeholders can apply for visas by holding a valid business license in Dubai.