Company formation in UAE starts with an initial approval and reserving your desired trade name and getting your trade license.
While these are just the first steps, it is important to set things right from the very beginning and avoid the pitfalls.
Read on to find out the 4 main types of business license, the application process, and the crucial considerations in registering a trade name for your business.
What exactly is a UAE trade license?
UAE trade license is an official document that is issued and approved by the UAE government or its approved authorities.
A trade license allows a company to legally commence business as prescribed by the chosen activities detailed on the license in UAE.
Which authorities issue the UAE trade license?
UAE trade license for mainland companies is issued by DED or the department of economic development in each UAE emirate. For instance, a business formed in Dubai must apply for a license with Dubai’s DED.
Free zone based companies will obtain their trade license from the respective free zone authority. For instance, a company formed in DMCC free zone must obtain a license from the DMCC authority.
What are the types of business license in the UAE?
Depending on the business activities you choose, there are various types of trade licenses that could be obtained.
It is very important to choose and obtain the right trade license based on your business activities since activities outside your license scope would bring along penalties and limitations.
Consult about getting the right trade license with SETUPDEAL.
Professional trade license
A professional trade license also commonly known as a service business license, will allow businesses to legally conduct service-related businesses or activities requiring deep expertise in specific fields.
For instance, a marketing company looking to provide advertising services must obtain a professional trade license. A medical practitioner looking to practice medicine must also get a professional trade license.
Commercial trade license
A commercial license will allow businesses to legally buy, sell and trade goods and commodities. These activities could include import and export as well. For instance, a clothing store requires a commercial trade license.
In the mainland, commercial licenses used to require local participation by an Emirati where they would own 51% of the company shares. For the vast majority of commercial licenses, this requirement has been removed.
For a full list of commercial activities that can be 100% foreign-owned, please look at this list.
Industrial trade license
An industrial trade license allows businesses to engage in manufacturing activities including assembly and montage as well. An industrial trade license requires the business to lease a warehouse.
For instance, a textile manufacturer must obtain an industrial trade license.
Tourism trade license
A tourism trade license is suitable for businesses engaging in any tourism-related activities.
For instance, a travel agency or a hotel must obtain a UAE tourism license.
What are the steps to getting a trade license in Dubai or UAE?
Mainland trade license in UAE
- Decide on the correct business activity with SETUPDEAL consultants
- Check whether you need a local sponsor or local agent for your specific business activity
- Reserve and register a trading name
- Get initial approvals from DED
- Get other approvals if necessary (from Dubai Municipality, Dubai Health Authority, etc.)
- Get an office/retail lease agreement
- Submit final documents
- Receive your UAE mainland trade license
UAE Free zone trade license
- Decide on the correct business activity with SETUPDEAL consultants
- Get initial approvals from the free zone authority
- Reserve and register a trading name
- Get other approvals if necessary (from Dubai Municipality and …)
- Get an office lease agreement (Most free zones will offer a virtual office along with the license, depending on activity, banks are increasingly requesting a physical office.)
- Submit final documents
- Receive your UAE free zone trade license
What are the required documents for getting a trade license in UAE?
- Shareholder’s details including passport copies
- Copy of last entry stamp to UAE
- Application form
- Trade name approval certificate
- Office tenancy agreement
- Educational degrees for management positions
How to choose a trade name in UAE?
Your business trade name should follow these protocols:
- The trade name shouldn’t contain any names or logos related to religion (such as Allah), governing authorities, and other external bodies.
- The trade name should be compatible with the public order and morals of the UAE.
- The trade name must include the business structure acronym (e.g. FZE, FZ LLC, etc.).
- The trade name must be unique and not previously registered.
- The trade name shouldn’t contain any special characters.
- If the owner wants to include his name in the trade name, it must contain both first and last names.
- The trade name can not include the phrases: “Universal”, “Middle East” or “International”
Your business trade name will be transliterated to Arabic as well. (but NOT translated)
How much does a UAE trade license cost?
Obtaining a trade license in UAE can cost between 10,000 to 50,000 AED. This wide range comes from a few factors such as:
- Number of business activities and categories chosen
- Approvals needed
- The need for a local sponsor or not
- The economic zone of business setup (mainland or free zone)
- Number of business partners
What is the process for trade license renewal?
UAE trade licenses must be renewed annually. Failure to do so will result in serious penalties for businesses and your corporate bank account may be suspended as well.
The trade license renewal process is fairly straightforward in UAE and doesn’t take much time. It is just a matter of document submission and making the relevant payments.
How long does it take to get a trade license?
It usually takes about 3-5 days for a free zone and 10 days for a mainland business license to be issued in UAE provided all documentation is in order.
There’s also the option of obtaining an instant trade license for a group of business activities that don’t need any other approvals from external agencies other than DED. The instant license is usually issued within a few hours.
Get the right UAE trade license fast with SETUPDEAL
Obtaining a trade license in Dubai and UAE can be confusing for expatriates as they’re not familiar with the idiosyncrasies of UAE company law and government departments to engage with.
There are also a couple of considerations that must be taken into account when it comes to choosing the business activities and also the trade name.
The business setup consultants at SETUPDEAL will advise you on the best route to take depending on your business activities. We will also take care of all necessary procedures on your behalf.
You can be confident that all necessary aspects of your setup will be taken care of leaving you confidence and time to focus on establishing and growing your business at its early stages of formation.
