Trade License in Dubai: Types, Benefits & Application

Dubai, known for its sparkling oceans, glittering nightlife, and booming business opportunities, has become a popular destination for entrepreneurs looking to start a business in the UAE. Surprisingly, during the first quarter of 2023, IFZA in Dubai reported an impressive 177% increase in new license registrations compared to the previous year.

So, if you want to ride the wave of this rising trend and get a trade license in Dubai, this guide will take you step-by-step through the process for company incorporation in Dubai.

Jump right in:

What is a Dubai Trade License? Types of Trade Licenses in Dubai Benefits of Getting a Trading Licenses in Dubai How to Get a Trade License in Dubai Approval Time for Trade Licenses Renewing a Trade License in Dubai Conclusion FAQs

What is a Dubai Trade License?

A Dubai trade license is a document issued by the Department of Economic Development that designates the activities for a company incorporated in dubai. There are different types of trade licenses available depending on the nature of your business. General trading licenses are valid for importing and exporting goods and carrying out commercial activities. Additionally, Professionals offering industry-specific services can also apply for a trade license in Dubai.

Types of Trade Licenses in Dubai

There are four main classes of trade licenses Dubai:

1. Professional License: This type of license is for professionals who provide specific services.
2. Commercial or Trade License: This license is for businesses involved in trade activities.
3. Industrial License: This license is for businesses engaged in industrial and manufacturing operations.
4. General Trade License: This license is for businesses involved in general trades, exports, and imports.

Before applying for any of these trade licenses, it is important to ensure that you have all the necessary company information in place to avoid any delays in the issuance of your license.

Benefits of Getting a Trading Licenses in Dubai

Obtaining a trade license in Dubai offers several advantages that makes it an attractive choice for entrepreneurs. Here are some of the main benefits:

Boost Local and International Trade

With a general trading license, you have the opportunity to import, export, and trade goods. This allows you to tap into the local Dubai market as well as explore international trade opportunities. Additionally, a general trade license enables businesses to re-export their goods, expanding their reach and potentially increasing profits.

Improve Credibility

Adhering to legal requirements and obtaining a trade license helps establish trust and credibility with customers and partners. By operating within the legal framework, businesses gain a competitive edge and build a reputation for reliability and transparency, which can contribute to long-term success.

Enjoy Tax Benefits

One of the key advantages of setting up a business in Dubai is the tax incentives. Unlike many other countries, Dubai is almost entirely tax-free, with no import, sales, or manufacturing taxes. This allows traders and business owners to retain more of their profits and reinvest them into their businesses.

Few Trade Restrictions

Dubai has a business-friendly environment with minimal trade restrictions. As long as your products are registered under a general trading license, you can conduct business with ease and without unnecessary restrictions.

Easy Set-Up Process

Setting up a business and obtaining a trade license in Dubai is relatively fast and streamlined compared to other countries. With the right documentation, you can typically establish a business in any Dubai free zone or mainland in just a couple of weeks. Additionally, there is no requirement to submit auditing reports once you have your license, saving you time and paperwork.

Sponsorship Opportunities

Another advantage of obtaining a trade license in Dubai is the ease of sponsoring dependents. Once you have a trade license, you can help others through the visa process, making it easier to bring family members or employees to Dubai. This flexibility allows for a smoother transition when starting a new life or business in Dubai.

How to Get a Trade License in Dubai

Obtaining a trade license in Dubai involves several steps. While the process may vary depending on the type of license and business activities, the following steps provide a general overview:

Step 1: Select a Business Name

Choose a unique and appropriate trade name that adheres to UAE guidelines for selecting a company name. Ensure that the name is not already in use by another active entity.

Step 2: Define Your Legal Structure

Select the legal structure for your business, which will determine how it is run and who is liable for the company. The legal structures available include sole proprietorship, partnership, and limited liability company (LLC).

Step 3: Define Your Business Activities

Specify the business activities you plan to carry out with your trade license. Ensure that you list all relevant activities and keep in mind that each license allows a maximum of ten activities.

Step 4: Complete the Application Form

Fill out the trade license application form, ensuring that all required information is provided. The form will need to be signed by all company managers.

Step 5: Get More Approvals

Depending on your business activities, you may need to obtain external approvals from relevant authorities. Research and identify any specific approvals required for your industry or trade.

Step 6: Gather Required Documents

Collect all necessary documentation, such as the trade license application, Memorandum of Association, company name approval, and copies of managing partners' passports. Ensure that all documents are organized and complete.

Step 7: Choose Your Business Location

Decide whether you want to set up your business in a mainland area or a free zone. For a mainland trade license, you will need a physical business location. Obtain a tenancy contract for the chosen location and ensure it is attested by Ejari.

Step 8: Submit Your Application

Compile all the required documents and submit your trade license application to the Department of Economic Development (DED) or the relevant authorities in the free zone where you plan to establish your business.

Step 9: Pay Your Licensing Fees

Make the necessary payment for the issuance fee and the trade license fee. The fees will vary depending on the type of license, business activities, and other factors. Consult the appropriate authorities for the exact fee structure.

Approval Time for Trade Licenses

After submitting your trade license application, the approval process usually takes between three days to four weeks. The exact turnaround time depends on the required approvals and the nature of your business activities. To ensure a faster approval process, double-check that all the necessary documentation is in order before submitting your application.

Renewing a Trade License in Dubai

Trade licenses in Dubai need to be renewed annually to continue legally operating within the UAE. The renewal process involves several steps:

Step 1: Obtain Approvals

Before renewing your trade license, ensure that you have obtained the necessary approvals and authorizations. The specific approvals required will depend on the nature of your business activities.

Step 2: Gather Required Documents

Collect the required documentation for the license renewal, including the completed renewal form, attested Ejari, authorization and approval letters, tenancy contract, photographs of all business partners, and the payment number for renewal fees.

Step 3: Check Tenancy Contract

Verify that your tenancy contract is valid for at least three months from the date of your license renewal application.

Step 4: Submit Your Application

Submit all the necessary documents to the Department of Economic Development (DED) or the relevant authorities for license renewal.

Step 5: Pay Renewal Fees

Make the required payment for the renewal fees to complete the license renewal process.

Conclusion

Applying for a trade license in Dubai not only grants businessmen the key to success but also open ups opportunities offered by the business-friendly environment in the city. This includes the potential to expand both local and foreign trade, enhance one's international image, avail tax benefits amounting to US $30 billion annually (owned by the country), and encounter fewer trading restrictions.

So, get a leg up by teaming with Water And Shark, we'll guide you through crafting solid business plans, suggesting the best investments for you, and even predict those tricky economic risks. Water And Shark, rooted in Dubai's dynamic market, pledges to be your steadfast ally, ensuring that your venture not only takes off but soars.