Getting a trade license in Dubai can take a lot of work. There are many steps in the application process, and it’s easy to make a mistake. If you make a mistake, it can delay or prevent you from getting your license.
A general trading license is a document or permit that allows the individuals to create a new business or trade in Dubai. You can apply for a trade license via DED after submitting complete documents and paying all necessary fees.
We’ve created this guide to walk you through every process, including what documents you need, how much it costs, and where to go for help. Plus, we’ve included different types of trade licenses in Dubai.
Types of trade license in Dubai
Dubai is home to several economic or trade jurisdictions, each with its own rules and regulations.
There are four main license types: industrial, commercial, tourism, and professional. And only, businesses with trade licenses are permitted to operate in Dubai.
The type of license required depends on the nature of the business, so it’s essential to choose the right one from the outset. Let’s take a look at them in detail.
Industrial trade license
If you want to start a manufacturing business in Dubai, one of the first things you’ll need to do is acquire an industrial trade license. This process requires having your own office or at least space to open an industry.
Once you have your license, you’ll be able to import and process raw materials and sell and export final products to Dubai or even foreign countries.
Similarly, to maintain the quality of the items supplied, the Dubai government controls the import and export of goods.
To be eligible for an industrial license, you’ll need to have a paid-up capital of 250,000 and over ten workers. You’ll also need to use five horsepower machines or more. And finally, you’ll need to pass a factory visit by the Dubai government. UAE Ministry of Economy, “Industrial trade license, … Continue reading
So, if you’re thinking of starting a manufacturing business in Dubai, make sure you get all your requirements in a row before applying for your industrial trade license.
Commercial Trade license
If you want to buy and sell products, you need a commercial trade license. This license is necessary for all types of businesses. It ensures that your business follows all the rules and regulations.
There are many benefits to having a commercial trade license. These benefits include importing and exporting products and renting out space for business purposes.
Additionally, the commercial trade license allows businesses to request that their license agreement be registered with the Development of Innovation in the Economy and Patents Department. This registration provides legal protection for the company’s intellectual property. UAE Ministry of Economy, “Register a License, https://www.moec.gov.ae/en/register-license#:~:text=This%20service%20allows,or%20design/drawing.”
Tourism trade license
If you want to do business related to tours and tourism, you need a tourism trade license in Dubai.
This includes hotels and travel agencies, tour operators, hospitality industries, and transportation providers. All of these groups are essential in making the UAE a popular destination for tourists from all over the world.
The UAE government ensures that only businesses with licenses can operate in the tourism sector. This protects both consumers and businesses while generating revenue for the country. Therefore, the tourism trade license has become essential to business in the UAE.
A professional license is an authorization that allows you to exercise a particular profession or provide specific services.
Most businesses in the United Arab Emirates need a professional license to operate. This includes digital marketing firms, business consultants, auditing firms, banks, and hospitals.
It can be complicated to get a professional license for your business. But having one has many advantages, like getting more opportunities and feeling more prestigious.
How to apply for a trade license in Dubai?
It is mandatory to have a trade license in Dubai to conduct any business activity. To apply for a trade license, you need to be careful about certain factors such as the business jurisdiction, location, company structure, activities of your business, office space, MOA, necessary documents, and fees.
The whole process of applying for a trade license may create confusion at first if you don’t have any experience in it.
Therefore, we have provided a step-by-step guide below to apply for a trade license in Dubai in case of any confusion. By following this guide, you can easily get your trade license.
Step 1. Select the appropriate business jurisdiction
When starting a business in Dubai, choosing the right type of business jurisdiction is essential. Three types of business jurisdictions exist mainland, free zone, and offshore.
Each type of jurisdiction has advantages and disadvantages, so choosing the one that best suits your needs is essential.
For example, if you sell products or services to customers in Dubai, you’ll need a license from the mainland. On the other hand, an offshore location might be a better option if you only want to sell products or services outside Dubai.
Regardless of your jurisdiction, you must be familiar with the requirements and restrictions before applying for your trade license. This is important because you might not get another chance to change your mind later.
Step 2. Determine company structure
After you have chosen an economic jurisdiction in Dubai, you will need to decide on a company structure that best meets your business requirements.
The various company structures available in Dubai include LLCs, partnerships, and joint ventures. You should seek legal counsel to ascertain which company structure would be most advantageous for your business.
Your company structure will also help create rules and regulations for your employees. Having a set of rules helps keep your employees organized and know their responsibilities.
Step 3. List all business activities
Before starting it in Dubai, you need to decide what your company will do. The Dubai Economic Department has a list of approved activities that your company can do.
If the activity your company wants to do is not on the list, you can apply for special approval. This process is long and complicated, so it’s best to choose an already approved activity.
Step 4. Approval from DED
To obtain a business license to operate in Dubai, you first need to get certain initial approvals from the Dubai Economic Department (DED).
This may involve approvals for your company name, structure, and business activities. The DED will review all this information to confirm that your company is qualified for a license and that it obeys all UAE laws and regulations.
Once you have gotten the required approvals, you can start the process of applying for your license.
Step 5. Business office
You need an office space in Dubai to get a trade license. This office space must be registered with the Dubai Economic Department and only used for business activities.
You cannot do any business activities from your home or another location outside of Dubai. Having an office space in Dubai shows you are serious about doing business here and following the required regulations.
Step 6. Memorandum of association
You must prepare a Memorandum of Association before applying for a trade license. This document will outline the rules and regulations of your company, as well as the company’s objectives and share capital.
Having this information is important before trying to get funding or partnerships from investors or other businesses.
Step 7. Submit relevant documents
Next, you will need to submit your application to the Dubai Economic Department along with all of the required documents.
The documents you have to submit while applying for a trade license in Dubai are:
- Passport copies of all your shareholders
- DED’s initial approval letter
- DED’s filled application form
- Memorandum of Association
- EJARI and the tenancy contract
In addition to these items, you may also be asked to provide detailed financial information about your company. The department will review your application and may request additional information before making a decision on your trade license.
Step 8. Pay corresponding fees
After your business license application has been approved, you will need to pay the corresponding fees. The amount you pay will depend on the type of license and the size of your company.
Therefore, it is advisable to consult with a financial professional before submitting your business license application in Dubai. This way, you can be sure that you are aware of all the associated costs and can budget accordingly.
Once you have paid the fees and obtained your business license, you will be able to begin operating your business in Dubai.
Costs of trade license in Dubai
A trading license in Dubai starts from AED 15,000 but can be more expensive depending on various factors. These include business structure, location, number of partners, and type of business.
In addition, there may be additional fees for licensing, translation, and guides. Furthermore, the cost of a trade license is generally less in Free zones and more in Mainland Dubai.
Knowing the cost beforehand helps to ensure that you are prepared for the expense of starting a business in Dubai.
The renewal process of trade license in Dubai
Renewing a trade license in Dubai is a quick and easy process, compared to getting a license for the first time. All you have to do is submit the necessary company documents, fill out the renewal form, pay due fees after getting the payment token and within no time your trade license will be renewed.
However, if you still need to figure out the process, let’s look at it in detail.
Step 1. Submit relevant documents
When renewing your trade license in Dubai, you will need to submit the same documents as when you initially applied for the trade license.
These include passport copies, EJARI forms, old trade licenses, and BR/1 forms. It is essential to ensure that all documents are up-to-date and accurate to avoid delays or complications with the renewal process.
Step 2. Fill in the BR/1 form
To renew your trade license in Dubai, you must complete the BR/1 form and submit it to the authorities. All required documents must be submitted along with the form for the renewal process to begin. The DED will review the form and supporting documents, and if everything is in order, your license renewal will go smoothly.
Step 3. Get payment token
You must obtain a payment token from the Dubai Economic Department (DED) to renew your license. This token can be used to pay the associated fees. To obtain the payment token, have your documents verified by the DED.
Once you have received the token, follow the instructions on how to use it to complete the license renewal process. Remember that you will only be able to pay your fees once you have received the payment token.
Step 4. Pay all corresponding fees
After you get the payment token, you must pay all the fees. This may include the license cost and any other permits or services fees.
Once all of the fees are paid, DED will process your renewal and give you a new trade license that is good for one year. Knowing all of the costs is essential before renewing your trade license.
Fees for renewal of Dubai trade license
The trade license renewal fee is the charge that the government asks for when you renew your business license. The fee depends on what kind of business it is and where it is.
But all businesses must complete the trade license renewal process every year to keep their business going. This process ensures that your business follows all the local rules and regulations.
The price for a trade license in Dubai renewal ranges from AED 8,000 to AED 15,000, plus an additional service charge/local service agent charge. Even though this fee might seem like a lot, it is a necessary cost if you want to do business in UAE. Renewing your license yearly will help ensure your business stays compliant with local law.
Benefits of trade license in Dubai
Dubai is one of the best places to do trade-in business in the UAE and the entire world. The rapid growth of Dubai makes it an attractive place to establish a business.
There are many benefits of having a trade license in Dubai, such as increased local trade, employment opportunities, business credibility, and tax exemptions.
Similarly, obtaining a trade license is the only prerequisite to opening a business in Dubai. Consequently, trade licenses provide many advantages and opportunities for businesses in Dubai.
Let’s take at some of the benefits.
Increase local and foreign trade
A general trading license in Dubai helps businesses to increase their local and foreign trade. This means when the business has the license they can easily import or export products to and from Dubai to local emirates or even foreign countries.
There are no tariffs on exports and imports, except for some special items. This means that having a trading license will give you more opportunities to be successful in business in Dubai.
Tax benefits and exemptions
Businesses with a trade license in Dubai can enjoy several tax benefits and exemptions. This helps reduce costs and improves profitability.
There is no personal tax in Dubai, so people in business can take all the dividends from their business without paying any tax. Applying for a business license in Dubai benefits any new or experienced businessman.UAE Government Portal, “Taxation, https://u.ae/en/information-and-services/finance-and-investment/taxation#:~:text=The%20UAE%20does%20not%20levy%20income%20tax%20on%20individuals”
Increase the credibility of business and brand image
In Dubai, obtaining a general commerce license is necessary for operating a business. It makes the company legitimate and aids in its compliance with the law.
Additionally, a trade license certifies that the company is legitimate and operating by the law. This can support a brand’s efforts to attract new investors and customers.
Local sponsorship and investment chance
A trade license in Dubai is crucial if you want to do business in the city. This license shows that you are a legitimate business.
The Dubai government uses this information to see if you are a good candidate for local sponsorship and investment. Many people in business are looking to invest in Dubai. With a trade license, you will have plenty of opportunities for investment and sponsorship.
Limited trade restrictions
If you want to start a business in Dubai, one of the first things you will need is a trade license. This license will allow you to do business legally in the city.
There are some restrictions on what type of business you can have, but having this license usually makes it much easier to run your business.
Ability to start multiple businesses
A general trading license in Dubai allows businesses to start multiple companies in the same sector. This gives businesses more flexibility and opportunities for growth.
The license also allows businesses to conduct import and export activities and storage and distribution. This means businesses can expand their operations into new markets or consolidate their position in existing markets.
- If you want an e-commerce license, check our guide on e-commerce trading license in Dubai.
How to check trade licenses in Dubai?
You can check if the licenses for your business in Dubai are expired or valid by visiting the Ministry of Economy website. And enter your business name into the Unified Commercial Registration System. UAE Government Portal, “Check trade license, … Continue reading
Which is the cheapest trade license in Dubai?
One of the most popular business options is the professional media license, which Sharjah Media City provides. This license allows businesses to do 13 different things, like advertising and event management. The license costs AED 5,750, making it one of the most affordable options in the UAE.
How many types of trade licenses are there in Dubai?
There are four types of trade licenses in UAE and Dubai they are Tourism trade license, commercial trade license, professional license, and Industrial trade license.
Obtaining a trade license in Dubai can be complicated and time-consuming. Similarly, you must also be careful on when to renew your general trading license.
You can get a trade license in Dubai by following the steps in this guide and getting help from the right people. The trading license cost varies depending on what type of business you want to start.
Dubai is a great place to do business, and with a trade license, you’ll be able to take advantage of all the opportunities the city offers.