You’re most probably considering starting your own business in Dubai. If so, getting your Dubai trade license is one of the most vital steps to starting strong and steady!
With the EXPO 2020 kickstarting markets in Dubai, the city has become an attraction for business investors and entrepreneurs looking to make the most out of the unique benefits the country has to offer. For interested parties looking to set up any type of business in Dubai, you should know that obtaining a trade license is one of the first objectives to achieve prior to starting your business. Trade licenses come in four distinctive types: Professional, Commercial, Industrial, and Tourism, all of which are explained below for your reference.
1. Professional Trade License
A professional trade license can be obtained for business owners looking to sell services that are based on skills, knowledge, and expertise in particular fields including information technology, education, beauty, healthcare, publishing, security, accounting, and others. Individuals looking to provide services that cover management, technical areas, and training courses can also apply for this license.
Before applying, a tenancy contract must be submitted to the Department of Economic Development (DED). This can be obtained from the Dubai municipality after getting a typed BR/1 form from the Ejari registration, an initial approval from DED, a rental contract, and a name reservation certificate. Other documents must be provided, which include copies of the passport and visas of the owners’ attested agreement of appointing a UAE National as a service agent from a legal translator, a Memorandum of Association (MOA), a copy of the local partner’s naturalization book, and No-Objection Certificates (NOC) from sponsors for foreign investors of the business. If no partners are present, then an AED 10,000 deposit is required for the application.
Further, initial approvals from relevant authorities, such as Road Transport Authority (RTA), Dubai Municipality, and National Media Council may also be required depending on the business activity. If the offered services might overlap with commercial trade, then business setup consultants in Dubai can be employed to recommend which license would be the best fit and provide optimum benefits and scope for the company. The unique advantages that a professional trade license provides to a business and its investors include getting visas for employees, limiting fees to a fixed annual one for all business activities run under the license, having transparency for all clients and customers, and receiving 100% ownership of the business.
2. Commercial Trade License
As for the commercial trade license, it is the most popular and sought-after license in the UAE and is often applied for within the mainland of Dubai and in its free zones. For those looking to trade goods and involve themselves in the export, import, and even re-export of commodities, this license authorizes such sales. This license also allows the firm to gain business support services that include banking support, trade incentives, startup incubators, etc. Business activities for this type of license include procuring and selling food and beverages, luxury goods, automobiles and accessories, and many others.
To apply for a commercial trade license, a trade name reservation is needed along with an initial approval letter from DED, MOA authenticated by the Notary Public, an attested copy of the tenancy contract, NOC from the local sponsor, bank reference letters for each shareholder, attested and notarized photocopies of shareholders’ passports, and an application form. All relevant documents must be translated into Arabic and authorized by the respective departments, including departments from the home countries of foreign applicants.
The distinctive privileges of such licenses relate to details in customs, taxes, and operations; products can be exported outside the UAE and supplied within the country for consumption, a 5% customs duty exemption is present on goods that are imported into the UAE for businesses holding this license, and multiples visas are available for employees, with visa sponsorship for multiple dependents. Identified as the most cost-effective trade license in Dubai, UAE, this license allows owners to engage in up to 10 different trade activities, open multiple branch offices when expanding trade in the future, and easily open corporate bank accounts that accelerate business plans and help owners achieve more objectives efficiently.
3. Industrial Trade License
The third type of license is the industrial trade license which is used by companies looking to deal with raw materials in aspects like manufacturing, assembling, processing, or even redesigning goods for sale. The industries that predominantly obtain this license include oil and petroleum, metallurgy, aluminum, steel, gold and precious stone businesses, metal casting, paper, appliances, equipment, machinery, motor vehicles, engines, textile, and even food.
There are certain prerequisites to be met prior to applying for this license in the DED. A factory must be physically owned which cannot be replaced with any virtual office space, a local agent or sleeping partner must be present who owns 51% of the stakes in the firm, and a minimum of 10 workers must be employed with housing arrangements. Furthermore, the factory must include at least five horse-power machines and have a standing capital of AED 250,000 upon registration. Once these conditions have been met, the documents needed for submission can be gathered, and these include copies of the balance sheet, trade license, passport and residence permits of employees, and approvals from the National Media Council, Ministry of Health, Ministry of Environment and Water, and Ministry of Interior.
In addition to this, a feasibility study report and a report that contains factory plans, production costs, capital, and the ultimate aim and goal of the business must be supplied. Once DED receives the application, it takes up to three months to analyze all the content, and if it is approved, the license can take up to 15 days to be issued. The construction of the factory can then begin while additional approvals from the Chamber of Commerce and Industry, Industrial Register, and Ministry of Health are obtained and submitted. With businesses that are set up within specific industrial zones, companies can use locally manufactured raw materials and further reduce costs and increase profit margins while positively impacting the local markets.
4. Tourism Trade License
Finally, the tourism trade license is also popular in Dubai considering the city’s popular holiday destinations. Depending on the tourism activity that the company chooses to pursue, a travel agent or an inbound/outbound tour operator license can be obtained. To receive this license, a completed application form is needed with a NOC from Civil Aviation Authority, along with a copy of the applicant’s notarized passport and a good conduct certificate for the business owner, reflecting the absence of a criminal record. All of these can be submitted to the Department of Tourism and Commerce Marketing (DTCM) and DED, and once obtained, the firm can also provide air tickets, visit visas, accommodation, and transport facilities to clients and customers. Furthermore, the tourism trade license also allows companies to participate in global conferences, shows, and exhibitions. The initial back guarantee requirement which was previously present is cancelled, making it easier to have a new business setup in Dubai within this sector.
To speed up the process of getting a trade license in Dubai, get in touch with our team of professionals at Best Solution, who specialize in services related to company formation in Dubai, have the necessary knowledge of all legal requirements, and can thus efficiently help you create the business of your dreams today.
