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A Complete Guide to Get a Trade License in Dubai

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trade license in Dubai, UAE

Do you wish to launch your endeavour in Dubai? Dubai requires a Trade License. The blossoming economy, quick approval, and lenient governmental laws and regulations are significant factors that helped the UAE emerge as a widespread choice as an investment destination for new start-ups and investors. 

The import and export markets of the United Arab Emirates attract most foreign investors. To do so, a business must possess a general trade license. First-time business owners may face difficulty in deciding which of the several UAE company trade license options they should use to launch a company in Dubai.

Getting a trade license in Dubai, UAE

Every Free Zone operating in the United Arab Emirates has a unique set of approved activities permissible to be carried out inside the designated Free Zone. Regarding the number of commercial operations that can be conducted under one business license, separately Free Zone has its own set of principles. 

A license will cost more with the greater number of activities you select. It is sometimes obligatory to obtain two or more business licenses for the same enterprise. One workaround for this is to pick multiple activities from the same licensing type and inside the same activity group so you will not have to pay extra.

Commercial (trade), Service (consulting), Production (manufacturing), E-commerce, General trade, and Media licenses are among the most common types that firms obtain.

Types of Business Licenses in Dubai Mainland

Mainland offers three distinct types of business licenses. The following details apply to Mainland Business Licenses:

  • Commercial license: This is intended for trades that engage in commerce.
  • Professional license: Companies offering services, such as accounting, legal, and consulting businesses should obtain this license.
  • Industrial licenses: Organizations that work in the industrial domains are qualified to apply for these licenses. Applications for this license are required from businesses that conduct manufacturing or processing activities.

Choosing the appropriate business license before starting a firm on the mainland of Dubai is significant. You will be permitted to conduct business on Dubai’s mainland with these documents.

You should choose an office in a different physical location if you intend to hire staff and hold frequent client meetings. You should consider a free zone’s location, infrastructure, and the availability of facilities. Not all free zones include certain facilities like warehouses or retail stores.

Additionally, remember that a business established in a free zone is only permitted to own a facility within the UAE free zone in which it’s registered.

Determine the number of UAE Residence Visas your business will require

Each employee of your organization in the UAE will require a residence visa. The type of facility determines the visa quota. Only a certain quantity of visas is available through shared desks, and these vary throughout Free Zones. If you have a shared desk in Dubai, you can often obtain 2 or 3 visas. But, if your company is in the Northern Emirates, you can obtain more.

Visas also have area requirements for a physical workplace. Usually, you are granted one visa every 9–10 square meters.

Types of Business Licenses for Dubai Free Zone

Professional: In Dubai, a professional license is approved for establishments that provide consulting and services.

Commercial: Permit for distribution, storage, import, and export.

Industrial: Permit to import raw materials and to manufacture and process specific products.

This area has many storage facilities, brokerage firms, and logistics firms. Thus, everything a trading company may require is close by. Do not forget to conduct competitive research to know which companies are in your target market.

Because of its sophisticated infrastructure, DMCC Free Zone is a prestigious location. If you are looking for a high-end workspace in one of the many striking buildings that can hold meetings, customers, and staff, this Free Zone is a great option. You can buy and rent offices at the DMCC. This is not like most other Free Zones, where the offices are owned by the Free Zone government, and are only available for rental.

Types of Free Zone Licenses

The following are the various kinds of free zone licenses:

Commercial licenses:  Companies looking to operate commercially in the free zone are granted these licenses:

  • A single commercial license
  • Two Activities under a Commercial License
  • Three activities under the Commercial License
  • General Trading License for Commercial Use

E-commerce licenses: Businesses looking to participate in e-commerce operations are granted such licenses. These businesses receive marketing and technical help from the license.

Service licenses: Those who want to provide services inside the free zone are granted a service license. Information technology consultation, management studies, and consultation are a few examples.

Industrial licenses: It draws in industry experts who hope to operate out of the United Arab Emirates for their businesses. The license grants its holder the ability to conduct business in compliance with national industrial rules and environmental standards. 

National Industry License: Businesses in the industrial sector that fulfil the following requirements are granted these licenses:

  • The business must own the majority stake in the partnership—51 percent or more—and be registered with the national GCC countries.
  • The free zone is where at least 40% of the production process must occur. Businesses possessing a national license can apply for license exemption from customs duties on goods exported from the GCC’s Arab member states.

How to Apply for a Trade License in Dubai?

The procedures to be followed are given below:

Find Out What Kind of License You Require

The nature of your commercial activity would govern the type of license or permit you would require. To launch a business, the first step is determining the sort of license you need. A company setup advisor can assist you in selecting the appropriate license.

Decide on a Business Name and Activity

Choose a memorable name that accurately describes your business and the kind of things it will do. Be sure the business name chosen complies with UAE naming restrictions and isn’t a trademark infringement.

Get the Initial Approval

First, have your business plan approved by the DED. It means creating a proposed business plan describing your company’s operations and projected financials. All facets of your firm like operations, sales, and marketing should be covered in an inclusive business plan.

Register the company

On receipt of the first clearance, you need to list your firm with the DED. Send required documentation that includes copies of the manager’s and each shareholder’s passports and the Memorandum of Association (MOA) and Articles of Association (AOA).

Acquire the Required Permits

Obtaining more consents and authorizations from other authorized governmental entities may be essential in certain cases. For instance, if you are building an eatery, the Dubai Municipality will need you to get a food and hygiene permit.

Submit documentation to obtain the license

Once the processes are finished, you need to turn in the required documentation and pay the relevant costs for the DED to issue you a trading license. Once you get the license, you can lawfully begin doing business in Dubai within a few working days.

Difference between Mainland and Free Zone Trade License

Businesses can choose between a free zone or on the mainland to launch their business. However, many wonders the better choice, and distinctions between the two kinds of trade licenses.

The Department of Economic Development (DED) of the relevant UAE grants a trading license to a company located on the mainland. The freedom to conduct commercial operations is the primary attribute of a Mainland corporation. The company requires a local sponsor or a UAE national as a partner for specific business endeavours.

For individuals who prefer to keep total control, the free zones serve as an excellent alternative to the mainland. Emirates now has more than 45 free zones. Every free zone is regulated by a different regulatory authority and follows its own set of laws and rules.

Work Space: 

The physical office of a mainland company needs to be at least 200 square feet. The DED will provide your group with a trade license after the required space has been obtained. Businesses don’t need a physical location because many free zones permit them to set up virtual offices.

Trade License Approval

You will require official authorization from government agencies, including the Ministry of Labour, Dubai Municipality, and DED to obtain a trading license in Dubai Mainland. On the other hand, all free zones follow their laws and regulations regarding newly established businesses operating within their boundaries. Furthermore, you can open a business in a free zone without getting permission from governmental bodies or authorities outside the zone.

Obtaining a trade license in Dubai is straightforward procedure. However, foreign investors unfamiliar with the UAE business environment may find it difficult. The task becomes hassle-free and seamless with the help and direction of a competent consultant. Entrepreneurs should seek aid from service providers like Business Consultants, who possess extensive knowledge of the entire procedure, including identifying the appropriate license type for their clients’ business operations.