How to Get a Trade License in Dubai – What you should know!

There are many reasons why you should get a trade license and set up a company in UAE, particularly in Dubai. First, it is required by law. Second, a trade license allows you to operate your business legally and obtain the necessary permits and approvals from the relevant authorities. Finally, a trade license protects your business from being shut down or fined by the government.

Operating your business without a trade license is illegal and can result in heavy fines or jail time. For example, if you are caught driving without a request, you will be issued a notice to cease operations and may be required to pay a fine of up to AED 100,000. In addition, your company will be blocked and will not be able to obtain future licenses.

If you’re planning to do business in Dubai, you’ll need to obtain a trade license. This process can be daunting, but we’ve put together a guide to help make it as easy as possible.

Once you have all the necessary licenses and permits, you’re ready to start doing business in Dubai.

In this guide, we’re going to tell you exactly how to get a trade license in Dubai, its benefits, costs, types, and much more.

What is a Dubai Trade License?

So, what is a trading license?

A trade license is your company’s legal permission to operate in Dubai. It is obtained from the Department of Economic Development (DED) and is valid for one year. The license can be renewed annually.

To obtain a trade license, you must first select a business activity from the DED’s list of approved activities. Once you have chosen an action, you must submit several documents, including a business plan, the lease agreement for your office or shop, and your passport and visa. You will also be required to pay a fee.

After your application has been approved, you will receive your trade license. You will then be able to apply for the necessary permits and approvals from the relevant authorities, such as the Dubai Municipality and the Department of Health.

A trade license is a crucial part of doing business in Dubai. It allows you to operate legally and protects your business from being shut down or fined by the government. Make sure you obtain a license before beginning operations in Dubai.

How Many Types of Trade Licenses Are There in Dubai?

Types of Trade Licenses in Dubai

A trade license is different from other licenses, such as an occupational or professional license, which may be required for certain occupations or professions. A trade license only permits the holder to conduct business activities within the city and does not allow them to practice a particular field or discipline. 

There are four main types of UAE business license:

  • Commercial License: Is for retail, wholesale, storage, and distribution of goods. These businesses must have a physical location in Dubai to conduct their business activities.
  • Professional License: Allow competent professionals to operate businesses in their respective disciplines.
  • Industrial License: Is for companies who develop and manufacture new goods using natural or raw materials.
  • Tourism License: This allows companies to operate in any of Dubai’s tourism sectors.

Each type of license has different requirements and allows businesses to conduct other activities.

Once the DED has approved the business plans, businesses can apply for their trade license. The application process for a trade license is completed online through the DED website.

After the trade license has been issued, businesses must register their employees with the Ministry of Human Resources and Emiratisation (MOHRE). Companies are also required to obtain a work permit for each employee.

How to Obtain a Trade License in Dubai?

How to Obtain a Trade License in Dubai

There are a few simple steps you need to follow to obtain a trade license in Dubai. 

  • First, you need to choose the type of business activity you will be engaging in. 
  • This will determine the kind of trade license you need to apply for.
  • Next, you need to submit all the required documents and fees to the Department of Economic Development (DED). 
  • Once your application is approved, you will be issued a trade license which will allow you to operate your business legally in Dubai.

Obtaining a trade license in Dubai is relatively straightforward and can be completed within a few days. First, however, you must select the correct type of business activity and submit all the required documents to avoid delays or problems with your application. Suppose you have any questions or need assistance with your trade license application. In that case, you can contact a professional company incorporation Dubai agent who will be able to guide you through the process and ensure that everything is done correctly.

To obtain a trade license in Dubai, you must submit the following documents:

  • A typical application form must be completed and signed by the legal representative of the company.
  • Original and copies of your company’s statutory documents.
  • The letter from the Department of Environmental Protection (DED) approving your firm name.
  • The letter from the Department of Economic Development attested to the approval of your company’s formation.
  • A lease agreement.
  • Shareholder information, such as copies of passports.

After submitting your documents and paying the fees, your application will be processed by the DED. If everything is in order, you will be issued a trade license which will allow you to operate your business legally in Dubai. Please note that your trade license must be renewed annually, and you will need to submit the required documents and fees once again.

It is important to note that you must renew your trade license before it expires. If you allow your trade license to lapse, you will be required to pay a fine and may even have your business operations suspended. Therefore, to avoid any penalties, renew your trade license on time.

Benefits of Dubai Trade License

There are many benefits to having a trade license in Dubai:

  • Ensures businesses are following government rules and regulations to avoid costly fines or penalties.
  • Allows businesses to develop a good reputation amongst customers as those with a valid trade license are seen as committed to complying with the law.
  • It helps businesses quickly obtain other licenses or permissions required for operation in Dubai, such as from banks.

Overall, having a trade license is essential for any business operating in Dubai. It helps to ensure compliance with the law, build trust with customers and can make it easier to get other licenses and permissions that may be required. Thus, it is evident that trade licenses play an essential role in ensuring the smooth running of businesses in Dubai and should be obtained as soon as possible.

The Cost of Getting a Trade License in Dubai

There is no specific answer regarding the Dubai trade license cost. The overall cost will depend on various factors, such as the type of business you are running, the location of your business, and the number of employees you have.

  • Generally, the cost of a trade license in Dubai starts from AED 10,000. However, this is just for the initial application and does not include other costs such as visa fees, office rental, or any deposits that may be required.
  • The cost of a trade license in Dubai may vary depending on the type of business you have. For example, companies that are considered high risks, such as those involving food and beverage or construction, will usually have to pay higher fees.
  • The location of your business can also affect the cost of your trade license. For example, if you set up your business in a free zone, you will likely have to pay higher fees than setting up your business in a mainland area.
  • Finally, the number of employees you have can also affect the cost of your trade license. Businesses with more employees will usually have to pay higher fees than businesses with fewer employees.

The best way to get an accurate estimate of the cost of a trade license in Dubai is to speak with a professional who can advise you on all of the necessary steps and requirements. Therefore, when considering the cost of a trade license in Dubai, it is essential to keep these factors in mind.

How Much Time Does It Take for the Trade License to Be Approved?

Applying for a Trade License can be a time-consuming process. The time it takes for the application to be approved can vary widely, from a few days to several months. In some cases, the approval process may take longer if the applicant must submit additional documentation or if the application is complex.

It is important to note that the time it takes for a Trade License to be approved is just one part of the overall process of starting a business. There is much more to learn before setting up a business in UAE. Other steps must be completed before a company can officially begin to operate, such as obtaining the necessary permits and licenses, registering the company with the relevant authorities, and opening a bank account. Depending on the type of business you start, this could add several weeks or even months to the overall time frame.

If you are thinking of starting a business, be sure to factor in the time it will take to get your Trade License approved when planning your overall timeline. Once you know how long the process may take, you can start working on the other steps needed to get your business up and running.

Dubai Trade License Renewal Process

The Dubai trade license renewal process is relatively simple. 

  1. Go to one of the Dubai Economy’s service centers.
  2. Send the specifications to the center’s e-mail address.
  3. Make a payment using one of the available options.
  4. Renew your business license.

There are a few documents that you need to submit for the renewal process: 

  • No Objection Certificate from the landlord (for renewing trade license for a commercial activity
  • Tenancy contract or title deed (for renewing trade license for an industrial activity
  • BR/1 form
  • Trade License copy
  • Trade name approval certificate
  • Approval from the concerned authorities
  • Valid passport copies of the company manager or owner

Frequently Asked Questions 

Is a Foreigner Eligible for Dubai Trade License?

Yes, a foreigner can start their own business in Dubai and obtain a trade license. The process is relatively simple, and many options are available for foreign entrepreneurs. However, it is essential to note that some restrictions are in place for certain types of businesses. These restrictions typically relate to companies that are considered sensitive, such as those involving alcohol or firearms.

What is the cheapest trade license in Dubai?

The cheapest license in Dubai is the International Free Zone Authority (IFZA) license, starting from AED 11,900

Is a trade license mandatory in the UAE?

A trade license is not mandatory in the UAE, but it is advisable to obtain one if you plan to set up a business in the country. A trade license will give your business a legal status and allow you to operate in the UAE market. For example, without a trade license, your business may not be able to obtain a bank account or lease office space.

Who needs a trade license in the UAE?

A trade license is required for any commercial activity conducted in the UAE, whether import/export, storage, distribution, manufacturing, or retail. The type of trade license issued will depend on the business’s main activity.

Businesses that are considered high-risk, such as those involved in banking and financial services, will need to obtain a professional license.

How much does it cost to renew a trade license in Dubai?

The cost of renewing a trade license in Dubai varies depending on the type and the number of employees. The fee is AED 2,000 for one year or AED 3,000 for standard license renewal for two years. The price is AED 10,000 for one year or AED 15,000 for two years for an industrial license. The fee is AED 5,000 for one year or AED 8,000 for two years for professional support. 

The cost of renewing a trade license in Dubai also varies depending on the number of employees. For businesses with 1-5 employees, the fee is AED 500 for one year or AED 1,000 for two years. For companies with 6-10 employees, the cost is AED 1,000 for one year or AED 2,000 for two years. For companies with 11-20 employees, the cost is AED 2,000 for one year or AED 4,000 for two years.

Conclusion

So there you have it. This was our short guide on how to get a trade license in Dubai. There are many reasons to get a trade license in Dubai. The city offers an excellent business environment with plenty of growth opportunities. There are also many benefits to being licensed, including access to the Dubai Chamber of Commerce and Industry and the Dubai International Financial Centre. Getting a trade license is the first step to doing business in Dubai and is essential for any company looking to operate in the city.