How to Obtain a Trade License in Dubai?

The UAE’s ranking on the ease of doing business is 16 as per The World Bank’s ease of doing business report 2019. The world bank report takes into account only mainland incorporation while evaluating the ease of doing business ranking for the UAE, it doesn’t consider free zones in the UAE. Hence it does not reflect the true picture when it comes to the ease of doing business. Apart from that Dubai has several free zones with advanced technology which makes the process of business setup in Dubai very smooth and a lucrative prospect for investors from across the world due to the strategic location, business-friendly policies and strong support from the government. With a robust business plan and professional assistance from reputed business setup consultants in Dubai, starting a business becomes an easier task. However, investors need to religiously follow the business setup procedures and regulations in Dubai. As per the regulations, obtaining a trade license is mandatory for every entrepreneur to set up a business in Dubai. The Department of Economic Development (DED) is the competent authority that issued trade licenses in Dubai mainland and the authority has stipulated certain procedures to obtain the license. Before venturing out with the procedure of business setup in Dubai, the investors must know the different types of trade licenses issued by the DED.

What are the Major Types of Trade Licenses in Dubai?

1. Commercial

A commercial license broadly covers all the business activities related to trading. A commercial license issued by the DED is intended for the firms that are engaged in activities that require capital to be practised. General trading companies and other retail businesses need to have a commercial license to conduct the business in Dubai.

2. Professional

A professional license in Dubai is mandatory for conducting activities that depend upon the professional knowledge and skills of the business owner. A professional license in Dubai is required for businesses such as consultancy services, auditing firms, accounting firms, etc. Such businesses appoint a Local Service Agent (LSA) and enjoy 100% ownership.

3. Industrial

The companies that convert raw materials into finished goods are covered under the industrial license issued by the DED. The manufacturing companies are required to obtain a DED industrial license to conduct the business in Dubai. Unlike other licenses, the manufacturing companies need to obtain approvals from authorities including

  • Ministry of Economy
  • Dubai Municipality
  • DEWA
  • UAE Ministry of Interior

The Process of Obtaining a Trade License in Dubai Mainland

The process of obtaining a trade license in Dubai involves a series of requirements, which can be fulfilled without delay if you hire reputed business setup consultants in Dubai. The following are the mandatory steps to be followed in order to get the trade license issued from the DED.

1. Determine the Right Business Activity

The first and most crucial step in the process of obtaining a trade license in Dubai is identifying the right business activity. The investors need to be careful while initiating the process of business setup in Dubai as the DED allows the companies to conduct the business in the activities it approves. The DED has a list of more than 2,000 business activities associated with the relevant trade license. If any company is found to have done business in activities that don’t come under the relevant license, a hefty penalty will be imposed. Consult the best business setup services in Dubai to avoid any form of penalties while setting up a business.

2. Special Business Activities that Require Approvals

In Dubai, there are special business activities that require approval from concerned Ministries and authorities to get the trade license. The activities that require Ministry approvals are

  • Legal
  • Audit
  • Banking
  • Transportation
  • Insurance
  • Tourism
  • Engineering
  • Oil & Gas

Getting approvals from the concerned Ministry is not a simple process and the investors would require professional assistance. The best business setup services in Dubai are well-versed in local laws and regulations and they can obtain the approvals on behalf of the companies.

3. Determining the Legal Structure of the Company

The legal structure or the legal form of the company is the type of company you are planning to set up in Dubai. The decision on the legal structure needs to be taken after considering the business type, business activity, the number of owners, and ownership options. The LLC is the most popular type of company formation in Dubai mainland, where the foreign owner holds 49% of the share while a local sponsor (UAE national) should hold at least 51% share in the company. Other forms of business setup in Dubai include the branch of a local or foreign company, representative company, etc. Determining the legal structure requires meticulous study and research, for which the assistance of the best business setup services in Dubai comes handy for the entrepreneurs.

4. Choosing a Company Name

The entrepreneur should reserve a trade name for the company right after determining the legal structure. There are strict trade name guidelines in Dubai for choosing a name for the business. Business setup consultants in Dubai recommend that the trade name should be associated with the business activity and legal structure of the company. This would prevent consumers from having confusion over the services offered by the company in Dubai.

5. Apply for Initial Approval

To have a smooth process of business setup in Dubai, you must need to obtain an initial approval certificate from the DED. Reputed business setup services in Dubai take care of the initial approval application on behalf of the entrepreneurs with proper documentation. The initial approval certificate is necessary for proving that the DED has no objection against the entrepreneur setting up a company in Dubai.

6. Rent an Office Space

The DED mandates that the companies operating in Dubai mainland should rent or lease out office space to fulfill the requirement of a physical address. The foreign investors, therefore, need to find out affordable office spaces at a location that best fits the business. The office space is a must for the visas as well in the mainland.

For renting the office space in Dubai, the entrepreneurs need to sign a tenancy contract with the landlord. After that, they should register the contract with Ejari for attestation. Consulting business setup services in Dubai is a reliable solution for fulfilling office space requirements.

7. Issuance of Trade License in Dubai

In the last stage of the process, you need to submit all the documents and approval certificates to the DED. The fee for the trade license should also be submitted along with the required documents. The DED will issue the trade license with which you can start your dream business in Dubai.

How Jitendra Business Consultants Help to Obtain a Trade License in Dubai?

A business license is a mandatory requirement for company formation in Dubai. The investors need to give attention to business activities, legal structures, and the documentation required for approvals while initiating the process of business setup in Dubai. The DED is the licensing authority in Dubai mainland and all paperwork submitted to the DED needs to be proper for obtaining the trade license without delay. However, the foreign entrepreneurs may find this process tough as sound knowledge in UAE laws and regulations is required. It is here that the expert assistance of business setup services like Jitendra Business Consultants (JBC) becomes a necessity for the investors. JBC has years of experience in providing efficient business setup services in Dubai for thousands of clients. JBC’s team of highly qualified business setup consultants possesses in-depth knowledge in the UAE laws and regulations and therefore a hassle-free process of business setup in Dubai is assured.

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