Business License in Dubai

Obtaining a business license in Dubai is an essential prerequisite for all company formations. Starting a new business in Dubai can be exciting and it can be challenging many times.  

This blog offers a complete guide covering the different types, structures, and procedures associated with obtaining a business license in Dubai. 

What is Dubai Trade License? 

A Dubai trade license is an official document that specifies the permissible activities a company can engage in within the UAE. The Department of Economic Development is responsible for issuing these trade licenses.

General trading licenses in Dubai encompass various activities, such as importing and exporting goods and conducting commercial operations. Businesses within Dubai Free Zones can obtain a Dubai trade license. Professionals providing industry-specific services can also apply for and obtain a Dubai trade license. 

Who is responsible for issuing business licenses in Dubai? 

The Department of Economic Development (DED) is a government organisation that grants licenses to individuals and companies seeking to engage in business activities in Dubai. The DED in Dubai is the primary issuer of business licenses and oversees the associated licensing processes.

A business that holds a DED grant is commonly called a “local company.” It’s important to emphasise that the Department of Economic Development exclusively registers and licenses mainland companies, unlike free zone companies, which receive approval from private authorities. 

What Types of Trade Licenses Are Available in Dubai? 

In Dubai, trade licenses come in various categories tailored to business activities. You can select from the following four primary classes of licenses: 

1. Professional License: Designed for professionals offering specialised services.
2. Commercial License: Suitable for individuals or entities engaged in trade-related activities.
3. Industrial License: Intended for businesses involved in industrial and manufacturing operations.
4. General Trade License: Geared towards businesses engaged in general trade, including imports and exports.

It is crucial to ensure that you possess the necessary documentation before applying for any of these trade licenses. Failing to do so may delay the issuance of your request. 

What Are the Advantages of Obtaining a Trade License in Dubai? 

There are numerous compelling reasons why many business owners opt to establish branches or enterprises in the UAE, and obtaining a Dubai trade license offers several key benefits: 

1. Facilitate Local and International Trade

With a general trading license, you gain significant opportunities for manufacturing and importing goods. You can distribute your products within the local Dubai market or expand your reach to international markets, yielding profits from various countries. A general trade license also enables business owners to re-export their goods, enhancing their ability to engage in global trade. 

2. Enhance Credibility

Companies that meticulously adhere to legal regulations earn the trust of their customers. Holding a trade license demonstrates compliance and enhances the business’s visibility within its respective markets, fostering credibility and garnering the trust of its customer base. 

3. Enjoy Tax Benefits

Dubai’s appeal to over 90,000 new residents in 2021 was partly due to its attractive tax incentives. Unlike many other countries, Dubai does not impose essential sales and manufacturing taxes, offering a nearly tax-free environment. This tax advantage allows traders and business owners to redirect funds that would have otherwise gone to taxes towards production costs. 

4. Minimal Trade Restrictions:

Dubai boasts minimal trade restrictions, making it an ideal location for conducting business. As long as your products are registered under a general trading license, you can operate without concerns about trade restrictions. 

5. Streamlined Set-Up

The process of obtaining a Dubai trade license is notably faster than acquiring other business licenses in the UAE. Efficient processing is possible with the proper documentation, and you can typically establish a business in any Dubai-free zone or mainland location within just a few weeks. Furthermore, once you have your license, there is no obligation to submit auditing reports, reducing future paperwork burdens. 

6. Sponsorship Opportunities

Obtaining a trade license in Dubai provides an easy path to sponsoring dependents, allowing you to bring family members or employees to Dubai. This streamlined process simplifies the visa procedures, making it more convenient to start on a new life or business venture in Dubai. 

What Documents Are Required for Obtaining a Trade License in Dubai? 

Obtaining a trade license in Dubai necessitates the submission of specific documents, each playing a crucial role in the application process. Ensuring your documentation is well-prepared and submitted correctly is vital to prevent unnecessary delays. Here are the essential documents you’ll need:  

• Trade License Application: The first step involves completing a comprehensive application form. It’s important to note that all company managers or partners should sign this document. 
• Memorandum of Association (MOA): You must create a Memorandum of Association, a legally binding document outlining the company’s objectives, structure, and critical operational details. It’s advisable to seek a legal representative’s assistance in drafting this document to ensure compliance with local regulations. 
• Company Name Approval: Attach the company name approval issued by the Department of Economic Development (DED) before submitting your trade license application. This approval is granted once the DED has accepted your chosen business name. 
• Passport Copies: All managing partners or key personnel involved in the business venture should provide copies of their passports as part of the application process. 

These documents constitute a comprehensive application package, and careful attention to their accuracy and completeness is essential to facilitate the trade license issuance process without unnecessary delays. 

How to Obtain a Dubai Trade License: Step-by-Step Guide 

Acquiring a Dubai trade license is a straightforward process that involves several simple steps. Here’s a step-by-step guide to help you secure your Dubai trade license: 

1. Select a Business Name

Choose a suitable trade name for your business. Ensure that your chosen name complies with UAE regulations for company naming and is unique and not in use by any existing entity. 

2. Define Your Legal Structure

Determine the legal structure for your business. Your choice of legal system will outline how your business operates and who assumes liability within the company. 

3. Specify Your Business Activities

After finalising your business name and legal structure, clearly define your company’s activities. List all relevant activities on your license application, keeping in mind that each license typically covers a maximum of ten exercises. 

4. Complete the Application Form

Fill out the trade license application form thoroughly and accurately. Once completed, submit the application to the Department of Economic Development (DED) for initial approval. 

5. Obtain Additional Approvals

Certain business activities may require external approvals. Conduct research to identify any specific permissions needed before the business formation to avoid potential license rejections. 

6. Gather Required Documents

Compile all necessary documents required for your trade license application. Ensure that all required signatures are affixed to these documents. 

7. Select Your Business Location:  

Depending on your business type, you’ll have various options for the type of trade license to apply for. For a mainland trade license, you must secure a physical business location. 

You must obtain a tenancy contract once you’ve chosen your business location. This contract should be attested by Ejari and submitted with your other application materials. 

8. Submit Your Application:

Once you have all the necessary materials and a confirmed business location, submit your trade license application to the DED. This is a critical step in obtaining your trade license. 

9. Pay Licensing Fees

Remember the trade license application process is not cost-free. You’ll be required to pay issuance and license fees to complete your application and receive your trade license. 

By following these steps diligently, you can easily navigate the process of obtaining a Dubai trade license and establishing your business in the city. 

What Is the Cost of Obtaining a Trade License in Dubai? 

Before acquiring your trade, license and initiating a business venture in Dubai, gaining insight into the associated expenses is essential. Understanding these costs is crucial for budgeting and ensuring a smooth licensing process. The cost of a trade license in Dubai can vary significantly based on several factors, including: 

• Type of Goods: The nature of the goods you intend to sell and any necessary approvals for specific product categories can influence the cost. 
• Number of Business Partners: The number of partners or stakeholders involved in your business can impact licensing fees. 
• Region of Establishment: The geographic location within Dubai where you choose to establish your business may affect licensing costs. 
• Business Structures: The chosen legal structure for your business can lead to variations in license fees.  
• Type of Business Activity: The specific business activity you plan to undertake can contribute to variations in trade license costs. 

As a general guideline, a Dubai trade license typically falls within the 15,000 to 50,000 AED range. However, it’s essential to note that obtaining a trade license in a Dubai-free zone may entail different cost structures compared to getting one in mainland Dubai. 

What’s the expected timeframe for obtaining approval for a trade license? 

Indeed, here are different points regarding the approval timeline for a trade license in Dubai: 

• Submission of Application: After submitting your trade license application, you must wait for the regulatory authorities to process it. 
• Short Waiting Time: Fortunately, compared to some other regions, Dubai offers a relatively short waiting period for trade license approval. 
• Varied Approval Times: The approval time can vary depending on several factors, such as the type of business activity you’re engaging in and the approvals required from specific government departments. 
• Typical Timeline: On average, obtaining your trade license in Dubai takes approximately three days to four weeks. This timeframe may change based on the circumstances of your application. 
• Documentation Matters: The key to a fast turnaround time is ensuring that all your application materials are complete and accurate. Missing or incorrect documentation can cause delays in the approval process. 
• Government Approvals: The exact time to get your trade license also depends on how quickly you can obtain the necessary approvals from relevant government authorities. 
• Transparent Process: Dubai has worked to streamline its licensing procedures, making the process more transparent and efficient for business owners. 
• Consultation Services: You should seek assistance from business consultants or agencies experienced in the Dubai market to navigate the licensing process more smoothly. 
• Continuous Monitoring: Throughout the application process, it’s a good idea to keep a close eye on the status of your application and follow up as needed to ensure timely approval. 
• Plan Ahead: To minimise potential delays, plan your trade license application well before starting your business operations in Dubai. 
• Consider Legal Structure: The type of business entity you choose, such as a sole proprietorship, LLC, or corporation, can also impact the approval timeline. 
• Regulatory Changes: Remember that trade license changes can influence approval times in government regulations, so staying updated on these changes is essential. 

How can I renew a trade license in Dubai? 

• Renewal Requirement: It’s important to note that even if you’ve been granted a Dubai trade license, it doesn’t remain valid indefinitely. To legally continue business operations within the UAE, you must renew your trade license annually. 
• Approval Process: Renewing your business license involves obtaining the necessary approvals, and the specific approvals and authorisations required depend on the nature of your business activities. For instance, transportation companies must secure permission from Dubai’s Road and Transport Authority as part of their license renewal process. Seeking support and guidance before initiating the renewal process can help expedite it. 
• Required Documentation: In addition to obtaining written approval for license renewal, there are certain documents you’ll need to gather. The documentation necessary for renewing a trade license in Dubai typically includes the following:  
• A completed renewal forms. 
• An attested EJARI (a standardised tenancy contract registration system). 
• Authorisation and approval letters from relevant authorities. 
• A valid tenancy contracts. 
• Photographs of all business partners. 
• The payment reference number for renewal fees. 
• Submission to DED: The business owner must submit these requisite documents to the Dubai Economic Department (DED) for approval. 
• Tenancy Contract Validity: Before initiating the trade license renewal process, reviewing your tenancy contract is crucial. Ensure that it remains valid for at least three months from your license renewal application date to avoid any issues during renewal. 

Please speak to our experts  

Contact Shuraa Business Setup for all your business licensing needs in one place. Our experienced consultants help you choose a suitable license and guide you through the process.

We handle communication with the Department of Economic Development (DED) and ensure approvals are secured. We also offer annual license renewal services. Book a FREE consultation with us today at 02081065084, WhatsApp at +44 7538 205604, or email info.london@shuraa.com.