Trade License in Dubai (UAE): Process, Costs, and Types

All businesses in Dubai require a trade license to operate in the country legally, and to showcase their compliance. While getting a trade license can be a tedious process, the post-acquisition phase brings many advantages and incentives for businesses in the long run. 

This blog is for anyone considering starting a business in Dubai. Refer to this comprehensive guide on everything businesses need to know about applying for a trade license in Dubai, including the types, benefits, cost, validity, and the renewal process.

What Is a Trade License

Obtaining a trade license in Dubai is essential for any business involved in importing and exporting goods, and in any other commercial activities within the country. It is a legal document issued by the Department of Economic Development (DED) authorising a company to conduct business within the UAE.

There are different types of trade licenses in Dubai, each applicable to specific sectors and business activities. Trade licenses usually allow a business to engage in up to ten core activities. However, a General Trade License offers greater flexibility since commercial activities are not restricted to particular business types.

Why Do Businesses Need a Trade or Business License in Dubai? 

A trade license in Dubai makes a company eligible to operate in the city as a certified entity. It administers the company’s commercial operations and overlooks consumer safety and well-being. 

Most importantly, a trade license in Dubai provides businesses with the legal documentation from the authorities. Businesses operating without a valid trade license in Dubai can face a fine of AED 5000.

Trade Licenses vs. Business Licenses

Generally, both trade and business licenses refer to legal validation that allows an entity to conduct business operations in the country. The key difference comes from the scope they cater to.

• Trade License

Trade licenses primarily focus on allowing businesses to conduct commercial activities such as buying, selling, or trading goods within Dubai.

• Business License

A broader term that refers to the official permit issued to any business entity, regardless of its activity, confirming its legal status and enabling it to operate legally in Dubai. Simply put, all trade licenses are business licenses, but not all business licenses are trade licenses.

Choosing the Right Type of Trade License in Dubai and in the UAE

A business or trade license is one of the most fundamental steps when setting up a business in Dubai. The following are the types of trade licenses that are recognised and regulated by authorities in Dubai and in the UAE:

1. Commercial License

Any company that obtains a commercial trade license in Dubai has the right to sell or buy goods, and to import or export goods. It also provides eligibility for commercial logistic operations, product trading, brokerage agencies, rent services, etc. 

Obtaining a commercial trade license in Dubai is mandatory for any business that is planning to engage in business both inside and outside the city. 

List of Commercial Licenses in Dubai

With a commercial license, businesses in Dubai can start trading the following:

• Gold and precious metals

• Automobiles and their spare parts

• Publications and media material

• Used furniture

• Oil and Gas

• Chemicals

• Safety equipment, etc.

Benefits of Commercial Licenses in Dubai

Some of the key benefits of having a commercial license  in Dubai include:

• Allows up to ten related activities under one commercial license 

• Many types of companies can be established 

• Safer business functioning through the Department of Economic Development (DED)

• Ensuring transparency, compliance, and legitimacy in commercial activities.

• Helpful when opening a corporate bank account

• Easy fiscal reporting with no taxation 

• Renewal is generally affordable

2. Professional License

Any business that employs an individual’s theoretical knowledge to serve a targeted group of customers needs a professional trade license. 

Professional licenses are generally obtained by auditors, consultants, and professionals who share similar backgrounds. 

Businesses that have more than one male owner will be categorised as “Civil Works Corporation” after obtaining their professional license. Complete ownership of the business is provided to the expatriate with a professional degree.

List of Professional Licenses

In Dubai, any individual consultancy services planning to operate in the following sectors can obtain a professional license: 

• Computer

• IT and IT infrastructure

• Management

• Environmental

• Tax

• Insurance

• Marketing

• Real estate brokerage

• Commercial brokerage

• Any other consultancies and professional services

3. Tourism License

As Dubai continues to be renowned as a popular tourist destination in the UAE, a tourism license has become a standard option for new and emerging businesses. Any firm offering recreation, hospitality, tour management, accommodation, etc, can apply for a tourism license. 

Activities Allowed for Tourism License

• Outbound Tour Operator

A type of tourism activity that allows businesses to plan and execute outbound trips both inside and outside Dubai. Generally, operators in this category are responsible for helping tourists travel from the UAE to other countries. 

• Inbound Tour Operator

Activities related to tourism that do the exact opposite of an outbound tour operator. This activity focuses on managing tours to Dubai from other countries. Having this permit allows operators the right to organise exhibits or conferences at a global level. 

• Travel Agent

Any professional who wants to open their own tourism agency and issue tickets should obtain a travel agent license. The license gives the eligibility to perform air ticketing services or offer Visa assistance to interested tourists.

4. General Trading License

A general trading license in Dubai gives a business the right to trade in a wide range of sectors or activities, alongside the ability to trade any goods with a virtual office setup in Dubai.

5. E-Commerce License

An e-commerce license in Dubai is exclusively designed for businesses that sell goods or services online. It is relevant for companies operating via electronic networks or other digital modes.

6. Industrial License

A type of license that is mandatory for businesses engaged in manufacturing or any other industrial activities. This includes production, segregation, and fabrication of products.

Differences Between Trade Licenses in Dubai Free Zone, Mainland, and Offshore

When starting a business in Dubai, most entrepreneurs choose between a mainland or free zone setup. The type of trade license will depend on your location and business activity.

Here are the key differences between business licenses in Dubai, UAE:

Benefits of Obtaining a Trade License in Dubai 

• Tax Benefits

Dubai offers an attractive business environment with no personal income or corporate tax exemptions for selected types of businesses. The city is also almost entirely tax-free for imports, sales, and manufacturing, making it easy for traders to increase their revenue.

• Boost Local and International Trade

Obtaining a general trade license gives businesses many opportunities to manufacture or import goods. It also allows them to distribute products locally within Dubai, sell them to international markets or re-export goods. 

• Strategic Location with Few Trade Restrictions

Dubai maintains a strategic geographic position which serves as a global gateway between East and West, offering convenient access to markets across the Middle East, Europe, Asia, and Africa. Businesses also enjoy fewer restrictions in terms of trade in Dubai as long as their products are registered under a general trading license.

• Improve Credibility

Customers generally consider businesses that comply with local legal frameworks more reliable and trustworthy. Obtaining a business license in Dubai, UAE, helps to increase business exposure and credibility, both locally and internationally.

• Sponsorship Opportunities

Having a trade license in Dubai allows businesses to sponsor dependents such as family members of owners and employees. This benefit makes it easier to relocate to Dubai and establish a more robust network for the seamless operations of businesses and to maintain personal lives. 

• Ease of Setup

Obtaining a trade license in Dubai is relatively easy and straightforward compared to other regions in the UAE. The processing time does not take so long, allowing businesses to set up in Dubai free zones or the mainland and start operations within a few weeks after applying.

• Government Support

The Dubai government has always maintained an attractive business environment with various incentives and a transparent regulatory environment that encourages success and FDIs (Foreign Direct Investments).

Obtaining a trade license in Dubai, UAE not only establishes a company as a legal identity but also opens businesses towards a versatile range of opportunities in one of the world’s fastest growing economies. 

How to Obtain a Trade License in Dubai: Step-by-Step Process

1. Select a Business Name

The first step to obtain a trade or business license in Dubai is to select a business name that complies with the legal guidelines. It should also be a unique name that is not used by another business. 

2. Define Your Legal Structure

Once the company name is finalised, determine the legal structure of your business. This will decide how it is managed and the extent of liability shared by its owners. Some of the options to choose from include:

• Sole Proprietorship

• Limited Liability Company (LLC)

• Partnership

• Branch of a Foreign Company

• Free Zone Company

 Each legal structure has specific implications for ownership and liability.

3. Define Your Business Activities

Take the time to list everything your company needs to deliver a product or service to customers and make a profit. It should also be emphasised that a business license in Dubai only allows a maximum of ten activities. 

4. Complete the Application Form

Fill out the application form with the required details and then submit it to the DED for initial approval.

5. Get Additional Approvals

Depending on the selected business activities, some may require or mandate external approval from authorities. Make sure you are aware of any additional approvals before proceeding with the business formation process. Otherwise, your trade license in Dubai may be rejected. 

6. Gather Required Documents

Compile all the necessary documents for your application process and ensure they have the signature of relevant personnel. 

Below is a detailed list of documents you need to apply for a business license in Dubai. 

• Passport and visa copy of the investor and manager

• Complete application form 

• Tenancy agreement

• Three choices of a name for the company reservation

• Degree certificate attested (in some cases)

• Experience certificate (in some cases)

7. Choose Your Business Location

The type of trade license you need will vary depending on the region where you plan to operate. If you want a mainland license, you will need a physical business location and obtain a tenancy contract, which must be attested by Ejari and submitted with your application materials.

8. Select the Main Business Activity

Add the primary and additional business activities you are planning to conduct to your application.

9. Select the Type of License 

Businesses can choose between different types of trade licenses such as: 

• Normal License

To obtain a normal license, you will need to draft a memorandum of association, which can be provided manually or electronically, along with a lease agreement for the business premises.

• Instant License

This type of business license in Dubai is more suitable for specific business activities in the UAE that do not require external approval. It is a simplified, one-step process that takes just five minutes. The instant license process has options for drafting a memorandum of association and setting up a virtual office for the first year.

Additional services provided with an instant license include:

• An establishment card from the Ministry of Human Resources and Emiratization, with approval that can be received via SMS. This card also enables the automatic opening of a file, allowing to hire up to three employees.

• Membership in the Dubai Chamber for commercial activities.

• An establishment card from the General Directorate of Residency and Foreign Affairs.

An instant license is applicable for the following legal entities:

• Civil Company

• Limited Liability Company (L. L. C.)

• Sole Establishment

• Single Owner Limited Liability Company

• DED Trader License

The sole establishment license is issued with the trade or business name using the “Invest in Dubai” platform. It is primarily targeted at home-based businesses in Dubai. 

10. Add License Partners and Their Details

You should include all the relevant details about the license and partners, such as their job title, nationality, contact information, address, and ownership shares.

11. Add Ultimate Beneficiary Owners

Provide information about the ultimate beneficiary owners of the business if applicable. 

12. Submit Your Application

Once you have fulfilled all the requirements mentioned in the steps above, submit the application, and send all the materials to the DED in order to receive your trade license in Dubai.

13. Pay Your Licensing Fees

Make the necessary payments for the issuance and the license fee through any of the payment methods available. 

14. Send Legal Documents

You will have to send documents like the memorandum of association to the related partners in the business for electronic signatures. Make sure all business partners are registered on the platform for electronic signing.

15. Obtain the Trade License

Once you have cleared the payment and submitted all the documents, give it some processing time, and you will receive your trade license and related documents.

How Long Does it Take to Process Dubai Trade License? 

Once you have submitted the application form, it takes anywhere from 3 days to 4 weeks to get a trade license in Dubai. The exact time depends on the approvals required for the process and the type of business activities you plan to conduct. 

As long as you have prepared all the necessary documents and double-checked the application materials before submitting them, you can obtain your business license with a quick turnaround time. 

Cost of Trade Licenses in Dubai 

It is always important to assess your business budget before deciding the type of trade license you need. 

Generally, you can expect to pay anywhere from 15,000 to 50,000 AED for a trade license in Dubai, but it depends on many factors such as the type of goods you plan to sell and the specific approvals required for your business. 

Other factors influencing the cost of trade license in Dubai include:

• Business structures

• Region of establishment

• Number of business partners

• Partnerships with local sponsors

• Type of business activity

The table below lists all the fees involved in obtaining a trade license from the DED website. Please keep in mind that this is a general breakdown and you will only have to pay the fees applicable to your chosen business activities.

Validity of Trade License in Dubai 

The maximum validity of a trade or business license in Dubai is 2 years. Most businesses prefer to apply for a 1-year trade license and renew it every year before expiration.

There is normally a 30-day grace period to renew your trade license after expiration. Any delay beyond this period will result in fines and penalties of AED 250.

Process to Renew a Trade License in Dubai 

1. Obtain Necessary Approvals

The first step to renew your trade license is to secure the required approvals and authorisations, which vary depending on your chosen business activities and type. 

For example, if you run a transportation business, you must obtain approval from Dubai’s Road and Transport Authority to renew your licenses.

2. Check for Compliance

Make sure that all your business activities, leases, and permits are up to date and comply with the local regulations.

3. Clear Any Fines

Before applying for a trade license renewal, clear any outstanding fines or fees associated with your business to avoid delays. 

4. Update Tenancy Contract

Ensure that your agreement or tenancy contract is valid and has at least a month remaining before the expiry date, as you will have to provide proof of it for the renewal process. 

5. Gather and Submit Documents

The documents needed to renew a trade license in Dubai include a completed renewal form, an attested Ejari registration, authorisation and approval letters, a valid tenancy contract, recent photographs of all business partners, and the payment number for the renewal fees. 

You will have to submit these documents to the Department of Economic Development (DED) to process the renewal of a trade license. 

6. Pay Renewal Fees

The fee for renewal will depend on the type of license and business activities. It is recommended to start the renewal process at least one month before the license expires, as it gives enough time to process it before the current license expires. 

Final Thoughts on Getting a Trade License in Dubai 

Obtaining a trade license in Dubai is a crucial step for businesses to operate legally and leverage the benefits of the city's dynamic markets. Regardless of the type of trade license you’re applying for, understanding the process, costs, and requirements ensures compliance and smooth business operations. With our comprehensive step-by-step guide, securing your trade license can be a straightforward process.