Trade License
Definition
Primary government-issued document permitting an entity to operate. Includes a registered trade name and approved activities; renewals and amendments are processed through DET or the relevant free zone authority.
Also known as
- Commercial License
- Business License
Attributes
| Issued by | DET or relevant free zone authority |
|---|---|
| Jurisdiction | UAE mainland or free zone |
| Governing authority | Department of Economy and Tourism (DET) for mainland |
| Contains | Registered trade name and approved activities |
| Renewal frequency | Annual |
| Related process | Trade Name Reservation |
What it is
The Trade License is the foundational document permitting a UAE entity to do business. It is issued by an emirate's licensing authority for mainland (DET in Dubai, ADDED in Abu Dhabi, SEDD in Sharjah) or by the relevant Free Zone Authority for free-zone entities. The license carries the registered trade name, legal form, list of approved business activities, shareholder details, and the validity period — typically one year, renewable annually.
A license is not optional decoration. Every invoice, every employment contract, every visa application, and every bank-account onboarding references it. Operating without a valid Trade License is a federal offence, with fines from AED 50,000 upward and potential criminal liability for the manager. Activities printed on the license also gate which categories of work an entity can legally invoice — a Professional License for management consultancy cannot, for example, sell physical goods.
Key characteristics
- Validity
- Usually 1 year, renewable annually
- Issuer
- DET (Dubai), ADDED (Abu Dhabi), or Free Zone Authority
- Activities
- Drawn from the official UAE activities list (1500+ codes)
- Mandatory inputs
- MOA, initial approval, Ejari (mainland), shareholder docs
How it works
- A trade name is reserved with the relevant authority (DET for mainland, or the specific free zone authority). 2. Initial approval is obtained confirming no objection to the proposed activity and legal structure. 3. Supporting documents — MOA, lease agreement (Ejari for mainland), shareholder passports, and NOCs where applicable — are submitted for final approval. 4. The license is issued and entered into the commercial registry, enabling visa quotas, bank account opening, and operational commencement. 5. Annual renewal is due on the license anniversary; failure incurs penalties and eventual administrative cancellation. 6. Amendments are filed as separate transactions with updated documentation and revised fees.
Types of Trade License
| Type | Description | When it applies |
|---|---|---|
| Commercial License | Buying and selling goods | Trading, e-commerce, retail, wholesale |
| Professional License | Knowledge-based services | Consultancy, IT, marketing, design |
| Industrial License | Manufacturing and processing | Factories, food processing, light industry |
| Tourism License | Tourism, hospitality, travel agencies | Tour operators, hotels, DMC |
Examples
A Dubai e-commerce startup holds a Commercial License for general trading. A management consultancy holds a Professional License with activities like 'management consultancy services'.
Why it matters
The Trade License is the single document every UAE counterparty asks for: banks for KYC, auditors for engagement letters, malls for retail leases, government tender platforms for prequalification. A clean, current license is a precondition to operating.
Common misconceptions
Misconception
One trade license covers any business activity.
Reality
Activities are explicitly listed. Adding a new activity requires a Trade License Amendment, not a separate license.
Misconception
Trade license renewal is automatic.
Reality
Renewal requires Ejari refresh, payment of fees, and sometimes inspection. Late renewal triggers per-day fines and visa suspension.
FAQs
- How much does a UAE Trade License cost?
- Mainland LLC licenses range from AED 12,000–25,000 per year for most activities. Free zone packages start at AED 5,500 (basic flexi-desk) and rise with office size and visa quota. Industrial and regulated activities cost more.
- How many activities can one Trade License cover?
- Mainland licenses typically allow up to 10 activities provided they fall under the same category (commercial, professional, industrial). Free zone activity caps vary — DMCC allows up to 6 by default, IFZA up to 7.
- Can I add a new activity later?
- Yes — through a Trade License Amendment. After the amendment, you must update the FTA, MOHRE, and your bank within the grace period to avoid fines.
See also
- Trade License Renewal(DET)
- Trade License Amendment
- Trade Name Reservation
- Ejari
- Trade License Renewal(Best Solution service)
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- UAE Visa for Pakistanis 2025: Latest Updates & How to Apply(news)
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Sources
External references
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