Not only is Dubai known for its brilliant nightlife and diverse Arabian cuisines but it’s also a city known for its thriving economy and fantastic business opportunities.
As such, many entrepreneurs are looking to obtain a business license in Dubai and start their own ventures across various activities. In fact, more than 45,000 new business licenses were issued in the first half of 2022 alone.
If you are a foreign investor/entrepreneur looking to start any type of business in Dubai, you will need to pay attention to the requirements of the regulations that provide for all the steps one must complete in order to have a company up and running.
Continue reading if you want to learn the process of registering a business in Dubai. This guide takes you step-by-step through the application process for a Dubai business license.
When do you need to obtain a business license in Dubai?
If you’d like to set up a business in Dubai, obtaining a business license is one of the first steps that you need to undertake. Building your presence in Dubai not only enables businesses to forge a significant footprint in the UAE, but it may also serve as a useful launching pad for expansion into various MENA markets.
There are different types of business licenses that you can apply for depending on the operations carried out throughout the UAE.
Before applying for any of these trade licenses, it’s crucial to make sure you have the necessary paperwork in order. Your license could not be issued on time if this is not done.
Different types of business licenses in Dubai
The section below emphasizes the different business licensing options provided by Dubai Department of Economic Development (DED). Depending on the procedures followed by the particular authorities, the licenses provided by free zones can vary.
Broadly there are 6 different types of business licenses in Dubai:
- Professional license: required for those who perform certain services.
- General trade license: licenses operating general trades, exports, and imports.
- Industrial license: permits for companies doing manufacturing and industrial operations.
- Agricultural license: required for businesses operating in the trade of agricultural goods.
- Craftsmanship license: permits for businesses selling specific types of crafted goods.
- Tourism license: for companies offering travel and tours as a service.
Professional license
In order to conduct business in Dubai, any organization or person that intends to benefit by utilizing people’s intellectual abilities must first obtain a professional business license.
If the company is owned by more than one individual, the company is registered as a Civil Works Company. Businesses engaged in insurance, consulting, IT and IT infrastructure, computers, environmental operations, tax, management, or marketing are frequently required to get a professional license in Dubai.
Industrial License
Manufacturing businesses must operate with industrial business licenses. Companies requesting this license must have a physical office in the United Arab Emirates.
In Dubai, large-scale producers of goods including dairy products, feed for animals and birds, meat products, carpets, and other comparable industries typically apply for an industrial company license.
General trade license
The trade license, also known as the commercial license, is the most popular sort of business permit in Dubai and it specifies the majority of operations that can be carried out throughout the UAE. The Dubai Department of Economic Development (DED) is responsible for issuing the trading license.
Companies that do import and export business may be granted a general trading license in Dubai. A business in Dubai may trade products like electronics, food, textiles, furniture, or equipment. As a result, one should set up an import and export business for which the DED issues a general trading license.
Agricultural license
You must apply for an agricultural business license in Dubai if your business uses land for growing crops, raising livestock, operating fish farms, building greenhouses, or selling pesticides.
Craftsmanship license
Any person in Dubai who works independently and engages in a specific craft for profit must submit an application for this kind of business license. This often comprises tradespeople like plumbers, electricians, blacksmiths, and carpenters.
Tourism license
In Dubai, businesses that specialize in tourism can apply for this kind of business license. This group of businesses includes travel companies, lodging facilities, cruise ships, floating eateries, tourist camps, and other similar businesses.
Freezone vs Mainland Business License
The location of the business is the primary distinction between a free zone and a mainland business license in Dubai. Businesses can run in special economic zones that provide a range of incentives and privileges, including tax-free operations and 100% foreign ownership, with the use of a free zone business license.
On the other hand, mainland business permits permit companies to run their operations within the city.
Another difference is the cost of the business license. Free zones usually offer lower trade licensing fees and other advantages to entice firms to locate there. Depending on a number of variables, such as the kind of items being sold and the necessary licenses, the price of a trading license in mainland Dubai may be greater.
In Dubai, the decision between a free zone and a mainland business license largely comes down to the particular requirements and objectives of the enterprise. Prior to choosing one choice over another, it’s crucial to carefully weigh the prices, advantages, and requirements of each.
Benefits of obtaining a business license in Dubai
Many business owners want to establish branches or organizations in the UAE because of the nation’s numerous business advantages. Here are a few key advantages of obtaining a business license in Dubai.
Boost both domestic and foreign trade
You have a lot of opportunities to manufacture or import goods if you have a general commerce license. You have the option of sending your goods to the Dubai market or sending them abroad to earn money from other markets.
A general trade license additionally enables business owners to re-export their products. This could improve your company’s capacity for international trading in goods and services.
Boost your credibility
Having a business license in Dubai can improve your business’s credibility and reputation among customers, partners, and suppliers. It shows that you are a legitimate and professional business that follows the rules and regulations of Dubai.
Enjoy tax advantages
In Dubai, businesses registered with the DED are eligible for various tax benefits, including exemptions from corporate and personal income taxes. This can help your business save money and improve its bottom line.
In 2021, approximately 90,000 people relocated to Dubai, primarily to take advantage of the tax breaks. In contrast to the majority of nations, Dubai exempts investors from paying import, sales, and manufacturing taxes.
The mostly tax-free nature of Dubai allows traders and business owners to make more money. Tax money that would have been used for other purposes can be used to offset production costs.
Simple Setup
A Dubai trade license can be obtained significantly more quickly than other company licenses in the UAE. You ought to have no trouble getting your license as long as you have the necessary paperwork.
The processing period for Dubai trade permits is also very quick. In just a few weeks, you may normally establish a business in any free zone or on the mainland of Dubai.
Additionally, after you obtain your license, you are not obligated to provide auditing reports. You avoid creating a ton of paperwork in the future by doing this.
Sponsorship Possibilities
The simplicity of sponsoring dependents is one of the main advantages of obtaining a trade license in Dubai. You can therefore bring your family or coworkers to Dubai.
You can assist individuals in obtaining visas if you have a trade license. This makes starting a new life or business in Dubai simpler than ever for you.
Business Support
As a licensed business in Dubai, you can access various business support services offered by the government, such as training and development programs, networking events, and advisory services.
Documents required for obtaining a business license in Dubai
The following documents are usually needed in order to submit an application for a business license in Dubai. However, they may differ depending on the body that oversees the licensing process.
- Trade name certificate
- Initial approval certificate
- Tenancy Agreement attested by the Dubai Municipality and RERA
- Memorandum of Association (Applicable for LLCs, One Person Company, Private and Public Shareholding Companies, Simple Limited Partnership, Partnership or Civil Company)
- Local Service Agent Agreement (Applicable when a UAE national represents your business with regard to licensing and compliance.)
- Government bodies approvals (Applicable on certain business types).
Steps to obtain a business license in Dubai
Obtaining a trading license for Dubai is not too difficult. You must complete a few straightforward steps in order to obtain your Dubai trade license:
- Determine the type of business you want to set up and the type of trade license you need. In Dubai, trade licenses are divided into various categories based on the type of business activity.
- Choose a business location. In Dubai, you can set up your business in a free zone, mainland, or offshore company. Each location has its own rules and regulations, so choose the one that best suits your business needs.
- Select a business name and register it with the Department of Economic Development (DED). The DED will check the availability of the name and register it if it’s available.
- Obtain the necessary approvals and documents. Depending on the type of business you want to set up, you may need to obtain approvals from various government agencies. For example, if you want to set up a food and beverage business, you may need to get approval from the Dubai Municipality.
- Apply for the trade license. Once you have all the necessary approvals and documents, you can apply for the trade license. This can be done online through the DED’s e-services portal.
- Pay the license fee. The trade license fee in Dubai varies depending on the type of business and location. The DED will provide you with the exact amount you need to pay.
- Collect your trade license. Once your application has been processed and approved, you can collect your trade license from the DED.
It’s important to note that the process for getting a trade license in Dubai may vary depending on the type of business and location. It’s always best to check with the DED or a professional business setup consultant to ensure you have all the necessary information and documents.
What’s the processing time for a business license?
The waiting game begins after you’ve submitted your trade license application. Fortunately, the wait period for a Dubai trade license is not that long.
The normal turnaround time for a trade license is three days to four weeks. The precise turnaround time will depend on the required approvals and the business operations you carry out.
Your turnaround time should be rather quick as long as you have all the necessary paperwork in place. To guarantee that your trade license is issued as soon as possible, double-check your application papers before submitting them.
Cost of obtaining a business license in Dubai
The cost of a business license in Dubai is determined by a variety of factors, including the kind of commodities being sold, the approvals needed, the number of business partners, the establishment’s location, its organizational structure, and collaborations with regional sponsors.
For instance, the price of your trade license can be greater than it would be if you were selling a popular type of goods if you wish to sell a specialized type of goods that needs particular permissions.
A trade license typically costs between 15,000 and 50,000 AED in Dubai. It’s crucial to remember that prices in free zones could vary from those on Dubai’s mainland. In order to entice firms to locate there, free zones frequently provide lower trade licensing fees along with other advantages.
Before making any decisions, it’s crucial to carefully weigh the advantages and disadvantages of acquiring a business license in Dubai. To make sure you are making the best decisions for your company, it is also a good idea to consult with an expert or ask the appropriate authorities for guidance.
