How to Get a Trade License in Dubai?

A trade license is a mandatory requirement to operate a legal business in Dubai. It serves as a stamp of approval, granting access to several benefits. Depending on your location, the license is issued by the Department of Economic Development (DED) for mainland businesses or the relevant freezone authority. The application process for a Trade license in Dubai typically involves choosing a business activity, obtaining necessary approvals, and submitting documents. The cost of the trade license varies based on factors like the chosen license type, business activity, and location. This article provides comprehensive and step-by-step instructions on how to get trade license in Dubai.

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What is a Trade License in Dubai?

A trade license in Dubai is an essential legal requirement that allows businesses to operate within the emirate. It is issued by the Dubai Department of Economic Development (DED) for mainland businesses. Additionally, trade licenses for businesses operating within freezones are issued by the respective freezone authority of the chosen freezone. Obtaining a trade license involves several steps, including selecting an appropriate business name, getting the necessary approvals from relevant authorities, and adhering to local laws and regulations. This license legitimises a business and ensures it complies with Dubai's legal and economic standards, providing a structured framework for business operations. It differs from a General trading license in dubai, which allows the business to trade a wide range of products across different industries.

Benefits of Trade License in Dubai

There are several advantages you will get with the help of a trade license in Dubai,

• Legitimacy and Credibility: A trade license is an official stamp of approval, demonstrating that your business is registered and authorised to operate in Dubai. This enhances trust and credibility with potential clients and partners.
• Market Access: The license grants you entry into Dubai's market, along with the wider UAE and GCC regions. This opens doors to a diverse customer base and paves the way for regional expansion.
• Tax Advantages: Dubai has a tax-friendly environment, with no personal income tax and corporate tax exemptions for certain businesses. This translates to significant cost savings and boosts your bottom line.
• Business Expansion: A trade license is a prerequisite for growth within Dubai. Whether you plan to open additional branches or broaden your service offerings, the license legitimises your expansion.
• Government Contracts: A trade license is a mandatory requirement if you aspire to participate in government tenders. This opens doors to potentially lucrative contracts and projects.
• Banking and Legality: A trade license facilitates opening a business bank account and securing legal protection. It allows you to operate with greater financial ease and provides a layer of security for your business.
• Sponsorship Opportunities: A trade license is essential for businesses seeking to relocate employees or sponsor dependents. This simplifies the process and allows you to build a strong team in Dubai.

Types of Trade License in Dubai

Below are the four common types of trade licenses you can get to set up a business in Dubai, 

Type 1 - Commercial Trade License

This is the most widely issued license, ideal for businesses engaged in trading activities. It encompasses the import, export, wholesale, and retail of goods across diverse sectors. This license is suitable for establishments like retail stores, restaurants, trading companies, and general merchandise businesses.

Type 2 - Industrial Trade License

This license is mandatory for businesses involved in manufacturing and industrial production. It authorises the operation of factories, refineries, processing plants, and other facilities that convert raw materials into finished products. Businesses engaged in activities like food processing, garment manufacturing, or furniture production require this license.

Type 3 - Professional Trade License

This license is suitable for businesses and individuals providing professional services. It is suited for consultants, lawyers, doctors, architects, engineers, and other qualified professionals offering their expertise. Obtaining a professional license often requires meeting specific academic qualifications and possessing demonstrable experience in the chosen field.

Type 4 - Tourism Trade License

This license is essential for businesses operating within the tourism industry. It is required for travel agencies, tour operators, hotel establishments, tourist transport companies, and other entities offering tourism-related services. The license facilitates the legal operation of businesses that contribute to Dubai's tourism sector.

Documents Required for Trade License in Dubai

The specific document requirements vary depending on the business activity and chosen location (mainland or freezone). Here are some common documents you must provide to the authorities to get a trade license in Dubai.

• Completed application form: This form details your business activities and the goods or services you plan to offer.
• Approved company name and business structure: You'll need prior approval for your chosen business name and your company's legal structure (sole proprietorship, limited liability company, etc.)
• Passport copies and photographs: Submit copies of passports and passport-sized photos for all company owners and managers.
• Memorandum of Association (MOA): This document outlines the company's objectives and governing rules.
• Articles of Association (AOA) (if applicable): This document details the company's share structure and shareholder rights (applicable to some legal structures).
• Proof of residence for the company: This could be a utility bill or a lease agreement for your office space.
• No Objection Certificate (NOC) from landlord (if applicable): If you're not located in a free zone, you may need an NOC from your office space landlord.

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How to Obtain a Trade License in Dubai?

The following are the general steps to obtain a trade license in Dubai,

Step 1: Choose Your Business Activity

The first step is to identify the specific activities your business will undertake. Dubai offers a wide range of trade licenses, so defining your activities will help determine which license you need (commercial, professional, industrial, or tourism).

Step 2: Select Your Business Name and Legal Structure

Choose a unique and appropriate name for your business that complies with Dubai's naming regulations. You'll also need to decide on your company's legal structure (sole proprietorship, LLC, etc.). This decision will impact factors like ownership, liability, and tax implications.

Step 3: Gather Required Documents

As mentioned earlier, there are common documents required for most license applications. However, specific requirements may vary depending on your business activity and chosen location.

Step 4: Choose Your Business Location (Mainland vs. Free Zone)

Dubai offers two main options for business locations: the mainland and free zones. The mainland allows you to operate throughout Dubai, while free zones offer specific benefits like tax exemptions and simplified regulations. Consider factors like your business activity, budget, and future expansion plans when making this choice.

Step 5: Apply for Your Trade License

Once you have everything in order, you can submit your application for the trade license. This can be done through the Department of Economic Development (DED) website or in person at their service centres. The DED website also offers helpful resources and guides to assist you with the application process. If you're setting up a company for freezone, then you need to apply with the relevant freezone authority.

Step 6: Obtain Additional Approvals (if applicable)

Certain business activities may require additional approvals from specific government departments. For instance, a healthcare service might need approval from the Dubai Health Authority. Research any relevant approvals needed for your chosen activities and ensure you obtain them before proceeding.

Step 7: Pay License Fees

The cost of your trade license will vary depending on your chosen business activity, location, and visa requirements. Fees typically cover license issuance, administrative charges, and DED service fees. Make sure you settle all applicable fees before your license is issued.

Step 8: Receive Your Trade License

You'll receive your official trade license after successfully submitting your application and paying the fees. This document allows you to operate your business in Dubai legally.

Also read: How to get a DED License in Dubai?

Cost of Trade License in Dubai

The cost of acquiring a trade license in Dubai cannot be stated as a fixed amount. The following factors can influence the trade license cost in Dubai,

• Type of Trade License: Dubai offers various trade licenses suitable for business activities (commercial, professional, industrial, tourism). The chosen license type will have a base fee associated with it.
• Business Activity: Your business's specific activities can influence the fee structure. Certain specialised activities may incur additional charges.
• Legal Structure: The legal structure you choose for your company (sole proprietorship, LLC, etc.) can impact the applicable fees.
• Location: Setting up your business in Dubai's mainland or a free zone will influence the fee structure. Free zones often have fee structures, while mainland Dubai has a standard structure with additional considerations for specific locations.
• Visa Requirements: If your business requires employee visas, this can add to the overall cost. Some free zones offer visa-free options, while mainland Dubai typically requires visas for most employees, which incur additional fees.

Conclusion

In conclusion, obtaining a trade license in Dubai is a multi-step process that involves choosing a business activity, selecting a location and legal structure, gathering documents, and submitting an application. You need to get a trade license from DED for Dubai Mainland or a freezone trade license from the relevant freezone authority. The cost varies depending on factors like license type, activity, and location. This license is essential for operating a legal business in Dubai and unlocks several benefits like market access and credibility.

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