Dubai Company Formation, Trade Licenses, and Business Setup(DED)

Dubai is known as one of the most promising Emirates in the world. Equipped with advanced technology, state-of-the-art infrastructure, and a high standard of living, business professionals from all over the world consider Dubai to be a blessing for their organizations. Whether it is a startup or a well-formed conglomerate, Dubai offers many perks to entrepreneurs in terms of growth and employment.

While forming your company in Dubai, you will have to register for a trade license which is essential to conduct business in the UAE and the world. The licenses are issued by the Department of Economic Development (DED) and vary according to the nature of the business of every company. This article will majorly focus on the types of trade licenses you can obtain for your business in Dubai and how to go about issuing the same, in addition to the host of benefits you can receive by doing so.

Why do you need a Trade License for your Business in Dubai?

Generally, a trade license or permit issued by the DED in Dubai is useful for the following activities:

• Most trading companies request a license for the import and export of goods.
• To go forward with the sale and purchase of various commercial services in Dubai.
• Free zones also issue trade licenses to benefit your business.

What are the types of Trade Licenses available for Businesses in Dubai?

The Department of Economic Development (DED) issues the following types of trade licenses depending upon the nature of activity pursued by your company in Dubai:

• Commercial License: A Commercial License is usually issued to companies indulging in trade activities.
• Industrial License: If your company deals with manufacturing or infrastructure-related activities, then the Industrial License will be beneficial for you.
• Professional License: The Professional License is most commonly used for the following services in Dubai:
  • Management
  • IT
  • Marketing and Advertising
  • Healthcare
  • Education
  • Accounting and Finance

The Professional License works as a special permit, enabling sole proprietors in Dubai to engage in full foreign ownership of their company. Although, if a foreign national wishes to obtain a trade license in Dubai, it is important to note that they need to become a resident of Dubai in order to gain full ownership of the sole proprietorship.

In case you register your company in one of the 44 free zones in Dubai, then a trade license will be issued to you via the authority of the particular free zone instead. It will also be limited to pursuing trade activities within that free zone.

Which Documents do you require to obtain a Trade License in Dubai?

While issuing a trade license for your company in Dubai, you need to show the following documents to the Trade License and Commercial Registration Department within the DED:

• An application form which needs to be filled out by the company’s legal representative.
• Statutory documents issued in the original and copies.
• The approval letter issued by the DED for the company’s setup.
• The approval letter issued by the DED for the company’s name.
• Details of all the shareholders of the company.
• The tenancy agreement.

Besides these, if there are any other agreements or documents required, it will be suggested by the DED itself.

What are the Advantages of Obtaining a Trade License in Dubai?

Since a host of licensing options are available for your company setup in Dubai, the below-mentioned factors suggest why it is beneficial to obtain a trade license for your business:

• A trade license requires hassle-free paperwork and limited documents for issuing. Further, the general span within which it gets issued is 4-5 days.
• Trade licenses can be issued for a cheap cost. It usually ranges between 30,000 and 40,000 AED.
• It allows local companies in Dubai to trade into the national and international spheres as well.
• If you are a foreign national wishing to set up a holding company in Dubai, obtaining a trade license will take you one step further towards that goal.

In case you still need any consultation, we at Water and Shark UAE can guide you through.