Dubai, UAE, is a prominent business hub in the Middle East and North Africa (MENA) Region. Dubai is ranked 16th in the global Ease of Doing Business Index, with more than 30,000+ new business setups monthly. The benefits of launching a business in Dubai extend beyond its stable socio-political and economic environment.
For startup entrepreneurs, SMEs, and large companies, a business setup in Dubai can be a groundbreaking opportunity to expand its reach across three continents ( Europe, Asia, and Africa).
But how can one get a business license in Dubai to lawfully operate in this competitive market? This article highlights the types of business licenses in Dubai and the step-by-step process of navigating the legal regulations in setting up a company in Dubai.
Why Business Setup in Dubai, UAE?
Dubai is not only known for being a leading tourist destination, but for over two decades now, Dubai has been on the frontline for promoting businesses of all sizes and innovative technologies.
With recent changes in company ownership structure in Dubai, foreign investors can now own 100% of their companies in Dubai mainland for specific business sectors.
The government of the emirate and the UAE at large have put in place several measures to promote entrepreneurship and investment across several sectors.
Below are some of the benefits of company formation in Dubai.
- No personal income tax and a 0% corporate tax for annual revenue below AED375000.
- Easy company formation procedure with remote business setup option.
- Access to a poll of multinational talents
- A stable and fast internet connection for communications.
- Many business events for networking with prospects, investors, and partners.
- Unrestricted foreign exchange and the transfer of capital and profit to the home country.
- Ability to sponsor family to live, work, and study in UAE.
- A low interest rate of less than 5% and flexible payment options on business loans.
- Secure business environment and a robust banking system.
Types of Business License in Dubai
The main authorized body responsible for issuing business licenses in Dubai is the Department of Economy and Tourism(DET)
A business license, or trade license, is a legal document that permits a company to conduct specific business activities in the UAE as defined by DET.
Therefore, when setting up a company in Dubai, it’s necessary to obtain a business license that aligns with your company goals and objectives.
Below are the four types of trade licenses in Dubai.
Commercial License:
This license allows a company to perform trading activities such as buying and selling goods and commodities as specified in the acquired license.
Examples of business activities under a commercial license in Dubai include:
- Import/Export of goods
- Retail and wholesale of goods and products
- Buying, selling, and leasing of real estate properties
Professional License:
This license allows professionals in a particular field to offer specific professional services to other businesses or individuals.
Examples of activities under a professional license in Dubai:
- Consultancy Services
- Arts and Craft
- IT and Technical Services
- Legal Services
- Educational Services
- Creative and Media Services
- Translation Services
- Accounting and Auditing Services
Industrial License:
This license allows a company to perform production and manufacturing activities.
Examples of activities under an industrial license in Dubai:
- Processing of raw materials
- Fabric and textile production
- Metal casting
- Manufacturing of automobiles, motorcycles, and their parts
Tourism License:
This license allows businesses to offer inbound and outbound touristic services in Dubai.
Examples of activities under a tourism license in Dubai:
- Tour Operator
- Travel Agency
- Tourism Consultancy
- Visa Assistance
- Accommodation Provider
Company Formation in Dubai Mainland and Freezone
When applying for a business license in Dubai, one crucial decision you’ll make is choosing between mainland and freezone company formation in Dubai.
Each option offers unique advantages tailored to different business needs.
Business License in Dubai Mainland:
Getting a trade license in Dubai mainland issued by the Department of Economy and Tourism (DET) allows you to run your business across the entire UAE and beyond without restrictions, giving you a broader scope of target customers and business opportunities.
Although the UAE now offers 100% foreign ownership to mainland companies, some business activities still require a local sponsor in Dubai.
Business License in Dubai Freezone:
Dubai is a home to more than 20+ freezone authorities designed to foster economic development in the Emirate and the UAE in general. A business license in Dubai mainland offers 100% foreign ownership, tax exemptions, and simplified company formation procedures.
However, starting a freezone company in Dubai restricts you from operating only within the designated freezone jurisdiction.
Step-by-Step Guide to Getting a Business License in Dubai
- Define your Legal Structure: Choose from options such as Limited Liability Company (LLC), Sole Proprietorship, Partnership, Branch of a Foreign Company, or Freezone Establishment.
- Choose your Business Location: Choose your desired business location ( Mainland or Freezone) for company formation in Dubai.
- Define your Business Activities: Select the business activities to include in the business license. You can add up to 10 business activities of the same categories in a single license.
- Choose a Unique Name for your Company: The name you choose for your company should not be a registered name of another company in UAE and must adhere to UAE business naming guidelines.
- Complete the DET Application Form: Collect, fill, and submit the company registration form from DET.
- Gather Required Documents: Compile all necessary documents for business license application in Dubai.
- Get Initial Approvals: Some business activities may require additional approvals, so make sure to get approval from all relevant authorities in Dubai.
- Submit Your Application: With all documents and approvals ready, submit your business license application to DET to apply for your business license in Dubai.
- Pay The Licensing Fees: Make payment for the license issuance fee and wait for a few days. (Usually 10 to 30 days)
- Obtain The License: After all documents are signed, submitted, and payment approved, you will receive your business license, which you can use to apply for residency visas and open a business bank account in Dubai.
How Much is the Cost of Getting a Trade License in Dubai?
Before applying for a trade license in Dubai mainland or freezone, it is advisable to know the actual cost of the type of business license you want to acquire.
The cost of getting a business license varies from AED 11,000 to up to AED 50,000 based on many factors, such as:
- Types of business activities
- Number of business owners
- Trade name reservation
- Business consulting fee (if required)
- Type of legal structure
- Desired business jurisdiction
Documents Required for a Trade License in Dubai
The documents required to apply for a trade license in Dubai will vary depending on your chosen business activity and legal structure.
Some general documents you’ll likely need include:
- Passport copies of all partners and shareholders
- UAE visa copies of all partners and shareholders (if applicable)
- Feasibility study (for specific business activities)
- Business plan
- Tenancy agreement (if applicable)
- No Objection Certificate (NOC) from your current employer (if applicable)
Get Expert Business Setup Consulting Services From CBS
Corporate Business Services (CBS) is an Emirati-owned business consulting firm in Dubai, UAE, with extensive knowledge and expertise in assisting startups and investors to establish their presence in Dubai and the UAE.
Our services extend beyond business licensing in Dubai. We offer a one-stop solution for everything business consultancy and advisory services in Dubai, from business setup to legal documentation and compliance services.
Our expert business advisors in Dubai will assist you in getting a business license in Dubai tailored to your goals and needs. We have a team of PRO offices who will do all the legal paperwork for you.
You do not need to be physically present in Dubai to setup your company here. Our experts will handle all the legal intricacies of your behavior from start to finish.
Book a free consultation now and let us guide you in launching a successful company in Dubai, UAE.
