How to Obtain a Commercial License in Dubai: A Step-by-Step Guide
Opening a business in Dubai is always on the hotlist of many entrepreneurs. This can be due to its location, which is strategically ideal, coupled with its vibrant economy and business-friendly environment. Much importance has to be given to obtaining the right business license for operation. The article will explain how to obtain a commercial license in Dubai, the cost, the difference between a commercial license and a trade license, among other relevant points. We will also explain major terms and procedures involved in setting up a business in the UAE.
What is a Commercial License in Dubai?
A commercial license in Dubai allows business entities to undertake trading activities within its jurisdiction. Some of these include buying and selling commodities/goods, import and export, and other varieties of trade. It is one of the most common types of business licenses issued by the Department of Economic Development, Dubai.
How to Obtain a Commercial License in Dubai:
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Determine your Business Activity:
The first step in acquiring a commercial license in Dubai would be to determine your business activity. Many varied business activities exist in Dubai, and you would have to choose what best describes your business.
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Decide on a Business Name:
Deciding on the appropriate business name would be the next step. The naming criteria of UAE are such that the business name should not be offending or indicate an association with religious or political bodies.
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Initial Approval:
This is Initial approval from DED, an indication that you can proceed with the licensing process. It indicates that DED doesn’t have any objection to your commencing a business in Dubai.
- Prepare all the required documents:
You will need to prepare the following documents as well, among others:
- Application form duly completed
- Copies of the shareholders’ passport
- Copy of receipt obtained for initial approval
- Memorandum of Association where necessary
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Rent a Business Premise:
You will need to find office space or a shop for your business. You need to get your tenancy contract registered in the Ejari system.
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Apply for a License:
All the forms, along with the required documents, must be submitted to DED. The DED will scrutinize your application form and furnish you with a commercial license.
Commercial License Cost in Dubai:
The cost of a commercial license in Dubai differs from one activity to another and also by the location where the activity is taking place. Generally, it costs from AED 10,000 to AED 30,000 per annum. Other related costs for setting up the business include:
- Initial approval fee
- Trade name reservation fee
- Tenancy contract fee
- Administrative service fee
Commercial License vs Trade License:
Even though the terms “commercial license” and “trade license“ are freely used and interchanged, there is a slight difference between them. Whereas a commercial license particularly takes into account activities related to trading goods, like import and export, the term “trade license” is basically used for commercial, professional, and industrial activities.
Professional License in Dubai:
Businesses dispensing professional services in consultancy, law, and educational services are required to obtain a professional license. Unlike the commercial license, a professional license is issued not to companies but to a person.
Online Checking of Your Trade License:
You can also check trade licenses online by logging onto the official website of DED and utilizing their online license verification tool. Using this service, you will have the ability to verify if any trade license in Dubai is valid or otherwise, or even know its exact status.
Free Zone Trade License in Dubai:
The free zones companies in Dubai are specifically aimed at providing a means for businesses to enjoy tax-free status, foreign ownership at 100%, and simplification of procedures relating to imports and exports. Some popular free zones companies include the following:
- Dubai Multi Commodities Centre, DMCC
- Dubai Silicon Oasis, DSO
- Jebel Ali Free Zone, JAFZA
Price for Dubai Free Zone License:
The cost of licensing for a free zone in Dubai differs and is based on the free zone, as well as the kind of business activity. It normally ranges from AED 15,000 to AED 50,000 yearly.
Free Zone Companies in Dubai:
Free zone companies in Dubai work in fields like technology, finance, logistics, and many others. Some of the famous free zone companies are mentioned below:
- DMCC
- Dubai Internet City, DIC
- Dubai Airport Free Zone, DAFZA
Formation of Company in Dubai:
The company formation in Dubai is a multi-step process starting from selection of the business structure to getting the required licenses and complying with other legal formalities. Several business structures applied are those of Limited Liability Companies, Free Zone Establishments, and branches of foreign companies.
Business Setup in Dubai
Now, through the well-defined and facilitated infrastructural services provided by DED and various free zones, it becomes easier to establish a business in Dubai. There are some supportive keywords to be considered at the time of setup:
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Business activity:
Define what your business will do.
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License in Dubai:
You need to have the proper license.
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DED Dubai:
Primary authority for licensing of businesses.
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Dubai trade:
Any sort of commercial activity can be carried out in Dubai.
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UAE free zones:
Consider operating in any one of the many free zones for added benefits.
In a nutshell, acquiring a commercial license in Dubai is not difficult if one gets the right procedures in order and has his/her documents ready. You will be able to know what kind of license to acquire for your business if you clearly understand the difference between a commercial license, trade license, or professional license. You may also want to explore free zone areas, which have many advantages for your business setup in Dubai.
