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Trade License Dubai: A Complete Guide
Anyone thinking of opening a business in Dubai will need to get a Dubai trade license. This is one of the most important steps new businesses take when starting a company in the area.
Your business journey starts with a trade license
Dubai is a city that is famous for its sparkling oceans and glittering nightlife. However, it’s also a city that’s famous for its booming business and incredible trading opportunities.
Perhaps that’s why so many business owners interested in starting a business in UAE are choosing Dubai as their home base. In fact, in the past year alone more than 55,000 new business licenses were issued.
If you’re interested in joining this rising trend and getting a trade license in Dubai, keep reading. This guide walks you through the process of getting a Dubai business license.
What Is a Dubai Trade License?
The business license is a document that designates what activities a company can carry out in the UAE. Each trade license is issued by the Department of Economic Development.
General trading licenses are valid for several activities in Dubai. These activities include importing and exporting goods as well as carrying out commercial activities.
Companies in Dubai Free Zones are eligible for a Dubai trade license. Professionals who offer industry-specific services are also able to apply for a Dubai trade license.
What Are the Types of Trade Licenses in Dubai?
Not all Dubai trade licenses are created equal. You can choose from four main classes of licenses:
- Professional License: licenses for professionals rendering specific services
- Commercial or Trade License: licenses for anyone participating in trade
- Industrial License: licenses for businesses running industrial and manufacturing operations
- General Trade License: licenses operating general trades, exports, and imports
It’s important to make sure you have the appropriate documentation in place before applying for any of these trade licenses. Failure to do so could cause delays in your license being issued.
What is a Free Zone, Offshore, and Mainland License?
The trade license you apply for will vary depending on whether you are starting a free zone business or a mainland business.
A mainland license is valid for businesses that are operating on the Dubai mainland. These require approval by various government entities and are issued by the DED.
Free zone trade licenses are issued by the authorities in a particular free zone. There are different limitations and benefits for each license.
If you plan to start an offshore company in Dubai, you will need an offshore incorporation certificate. These types of businesses are not allowed to operate within the UAE.
What Are the Benefits of Getting a Trade License in Dubai?
There are many UAE business advantages, which is why so many company owners are choosing to set up branches or organizations in this country. Here are a few of the main benefits of getting a Dubai trade license.
Boost Local and International Trade
With a general trading license, you have a huge opportunity for manufacturing or importing goods. You’re able to either send your products to the local Dubai market or to send them abroad and gain profits from other countries.
On top of that, a general trade license allows business owners to re-export their goods. This can help boost your company’s ability to trade goods and services around the world.
There are plenty of businesses that look for loopholes in laws and regulations in order to gain a bigger profit. However, companies that take the time to adhere to legalities gain the trust of their customers.
What’s more, the license raises the business’s exposure in the markets it operates in. That helps it build credibility and gain the trust of its customer base.
Enjoy Tax Benefits
One of the main reasons why over 90,000 people moved to Dubai in 2021 was to take advantage of the tax incentives. Whereas most countries require investors to pay important, sales, and manufacturing taxes, Dubai doesn’t.
Since Dubai is almost entirely free of taxes, traders and business owners are able to gain additional revenue. Money that would otherwise have been spent on taxes can be put toward production costs instead.
Few Trade Restrictions
There are very few trade restrictions in Dubai, which makes it an ideal country to do business in. As long as your products are registered under a general trading license, you won’t have to worry about restrictions.
Getting a Dubai trade license is much faster than getting other business licenses in the UAE. As long as you have the right documentation, you should be able to get your license without a problem.
On top of that, the processing time for Dubai trade licenses is extremely fast. You can typically set up a business in any Dubai free zone or mainland in just a few weeks.
What’s more, you’re not required to submit auditing reports once you have your license. This saves you a huge amount of paperwork later down the line.
One major benefit of getting a trade license in Dubai is that it’s easy to sponsor dependents. That means that you can bring family members or employees over to Dubai.
Once you have a trade license, you can help others through the visa process. This makes it easier than ever for you to start a new life or a business in Dubai.
What Documents Do I Need to Get a Trade License?
Part of getting your Dubai trade license requires you to submit certain documentation. It’s important to make sure that all the documentation is well-organized and that you submit it with your application to avoid delays.
For one, you’ll need to fill out a trade license application. All company managers will need to sign the document.
You’ll also need to create a Memorandum of Association. This should be done with the help of a legal representative.
Next, be sure to attach the company name approval to your application. The DED will send you this approval after accepting your chosen business name.
Finally, all managing partners will need to submit copies of their passports.
How Do I Get a Dubai Trade License?
It’s fairly easy to get a Dubai trade license. To get your Dubai trade license, you’ll need to follow several simple steps.
Select a Business Name
The first step to getting your trade license is to select an appropriate trade name. Your business name must adhere to UAE guidelines for selecting a company name. It should also be a unique name that isn’t used by another active entity.
Define Your Legal Structure
You’ll need to select the legal structure of your business in order to continue your application for a trade license. The legal structure will define how your business is run and who is liable for the company.
Define Your Business Activities
Once you have chosen your company’s name and legal structure, you’ll need to define the business activities that you plan to fill out. Make sure to list out all activities on the license and keep in mind that each license allows a maximum of ten activities.
Complete the Application Form
The next step of the process is to fill out your application form. Once completed, submit the form to the DED for your initial approval.
Get Additional Approvals
Some business activities may require you to get external approvals. Make sure to do your research before completing the business formation process. Otherwise, your trade license may be rejected.
Gather Required Documents
Along with your completed application, you’ll need to submit several documents with your license. Gather these documents and ensure that all necessary signatures are present.
Choose Your Business Location
You have several options when it comes to what type of trade license you apply for. If you apply for a mainland trade license you will need to have a physical business location.
Once you choose a business location, you will need to get a tenancy contract. Ejari will have to attest to the contract, which you will submit with the rest of your application materials.
Submit Your Application
With all your materials in hand and a business location chosen, you’re ready to submit your trade license application. Send all the materials to the DED in order to receive your trade license.
Pay Your Licensing Fees
Remember, applying for a trade license is not free. You’ll need to make a payment for the issuance fee as well as the license fee itself in order to receive your license.
How Much Does It Cost to Get a Trade License in Dubai?
Before you rush out to get your trade license and start a business in Dubai, you’ll need to know what costs to expect to pay. This will help you budget for your licensing process and avoid running into any hiccups.
The cost of the trade license varies depending on what type of goods you want to sell and what approvals you need to get. Other factors that can affect the cost of your trade license include:
- Number of business partners
- Region of establishment
- Business structures
- Partnerships with local sponsors
- Type of business activity
Typically, however, a Dubai trade license will cost between 15,000 and 50,000 AED. Just remember that getting a trade license in a Dubai free zone will have different costs from a trade license in mainland Dubai.
How Long Will It Take to Get Approved for a Trade License?
After you’ve submitted your trade license application, it’s time to play the waiting game. Luckily, the wait time is relatively short for a Dubai trade license.
It typically takes anywhere from three days to four weeks to get your trade license. The exact turnaround time will depend on the approvals required and the business activities you conduct.
As long as you have all the appropriate documentation in order, your turnaround time should be relatively fast. Double-check your application materials before submitting them to ensure your trade license is issued quickly.
How Do I Renew a Trade License?
Just because you were granted your Dubai trade license doesn’t mean it will be valid forever. You’ll need to renew the license every year in order to continue legally operating within the UAE.
To renew your business license, you’ll need to start by getting the right approvals taken care of. The type of approvals and authorizations needed will depend on what kind of business you are offering.
For example, transportation companies will need approval from Dubai’s Road and Transport Authority in order to renew their business licenses. To speed up the process, get approval before beginning the rest of the renewal process.
Aside from written approval for license renewal, businesses needed to gather documentation. The documentation required to renew a trade license in Dubai includes:
- The completed renewal form
- Attested EJARI
- Authorization and approval letters
- A tenancy contract
- Photographs of all business partners
- The payment number for renewal fees
The business owner will have to submit these documents to the DED in order to get approval.
Before applying for a trade license renewal, you’ll want to check your tenancy contract. It should be valid for no less than three months from the date you apply to renew your license.
Get Your Dubai Trade License Today
Getting a trade license in Dubai is the key to benefiting from the many UAE business advantages. It’s a way to help your company boost revenues and make valuable investments in a rising economy.
Ready to get started setting up a Dubai business? Get in touch with our team and we’ll help guide you through the entire process.