Having a trade license in a Dubai location is the most important step that you must take to start your business. And this legal document will not only legitimize your company but also help you cover your business activities in Dubai. However, it is vital to consider the Dubai trade license cost and know its requirements before applying for it.
In this article, you will learn all you need to know about this license available in Dubai. And you will also discover the different types of trade licenses that you can apply for in this emirate. Besides, you should know about the license renewal process and its cost to be prepared for it.
Why do you need a Trade License in Dubai to do business?
There are several reasons why you need a trade license, and the main one is that it is mandatory for investors. Regardless of the business location in which your company operates, it is a legal requirement to have this license. However, there are many other reasons why your business should possess this document in Dubai or the UAE.
For instance, you should keep in mind that a license like this will identify both you and your company. Besides, having this document also allows your business to take accountability for its commercial activities in the Dubai emirate. In addition, a trade license can also protect the public’s interest and provide safety through procedural measures.
And also, investors that have their trade licenses can participate in many profitable measures that the government introduced. On the other hand, there are many other benefits that investors can enjoy by having a trade license in Dubai. For example, some of those benefits that they can get are the following ones:
- 100 percent of repatriation of both capital and profits.
- Low import duty.
- No paid-up capital requirement.
- Multiple banking benefits.
- Tax-free jurisdiction.
- And it also provides a getaway for both local and international trading as well.
However, if you want to apply for a trade license in this emirate, you will to learn about the application process. Besides, it is also vital to know about the types of trade licenses and the main authority that issues them. Furthermore, you should also keep in mind the Dubai trade license cost and the renewal process and fees.
Who in Dubai issues Trade Licenses?
The only authority that issues this type of legal document in Dubai is the DED. These acronyms stand for the Department of Economic Development, which is a government entity that sets and drives the emirate’s economic agenda. And this authority also supports the structural transformation of the emirate into a diversified and innovative service-based economy.
The DED also counts on several agencies that develop and manage economic policies and plans. Besides, these agencies also have the function of identifying and support the economic growth of different strategic sectors. And in order to support them, the DED agencies provide them with services to both local and international investors and companies.
There are three main DED agencies that have the main purpose of supporting investors and their different types of businesses. And those agencies are Dubai SME, Dubai Industries & Exports, and Dubai FDI (Foreign Direct Investment). Each of them was launched for supporting and promoting specific kinds of businesses, besides facilitating their success and growth.
To summarize, this government body has the goal of improving the business environment and speeding up Dubai’s productivity growth. Therefore, one of the services that the DED provides is the issuance of different business licenses, including trading licenses. However, in case you want to establish your company in another emirate, you must issue your license through other entities.
What are the different types of trade licenses available in Dubai?
Depending on the types of business activities that your company carries out, you will need a specific trading license. And you can find four main types of this business license in Dubai and other emirates in the UAE. It is important to know about each license so you can choose one that suits and covers your activities.
Let’s take a look at the four main types of trading licenses that you can apply for in Dubai:
- Commercial License: with this license, your company can carry out different trade activities within the jurisdiction, including buying and selling products. However, you must know that it is only possible to trade these activities for the items that your license mentions. Additionally, traders could also import and export goods by having this license.
- Professional License: on the other hand, this license is only for those who carry out individual activities or services. For example, local or foreign professionals who have experience with multiple activities from certain industries can use this license. And the most common ones tend to be marketing, management, education, accounting, healthcare, advertising, and more. It is worth mentioning that it is not necessary to have a local sponsor if you have this license.
- Industrial License: this one is useful for investors who desire to set up a factory and carry out industrial activities. The main activity that this license allows is importing raw materials, which leads to other activities and processes. For instance, it is possible to manufacture goods and then exporting the finished products.
- Tourism License: as for this one, it is exclusively for tourism-related companies or agencies that operate in Dubai. Therefore, some taxes, regulations, rules, permissions, and compliance are somehow different when it comes to the tourism sector.
Is it necessary to renew a trade license in Dubai?
It is mandatory for company owners to renew their trade licenses every year if they want to keep operating. And the main reason is that they could face certain penalties if they keep running their businesses with an expired license. Therefore, it is vital to consider not only the Dubai trade license cost but also the renewal cost.
Once your trading license has expired, you will only have 30 days to renew it or cancel it. And of course, you cannot keep operating your company in Dubai if you cancel your license. However, if you don’t complete any of these processes before those 30 days, you must pay a fine of AED 250.
Besides, there could be other severe penalties that your company must go through if you don’t renew your license. For example, you could face a penalty of an AED 5,000 fine, or in the worst case, there could be bankruptcy. And it could bring other consequences that could negatively affect your company’s success and reputation.
Also, there could be other worse consequences and penalties that might make things worse for your business. For instance, being banned and blacklisted are some of those negative effects. On the other hand, voluntary or forceful liquidation is another thing that could happen to your company if you don’t renew your license.
How much does it cost to renew a trade license in Dubai?
The Dubai trade license cost for its renewal is something that you should always take into consideration from the very beginning. And besides, the cost for your trading license renewal process must be paid every year. Otherwise, you will have to face the previously mentioned penalties, or even banning and freezing your business activities.
The cost for renewing a trading license in this UAE emirate ranges between AED 8,000 and AED 15,000. Nonetheless, it could vary according to your type of license and the business location in which you operate your business. Therefore, it is highly suggestible to request business consultancy at a specialized agency.
Obtaining an E-commerce License in Dubai
An e-commerce license allows investors to perform different trading activities that are related to the e-commerce sector. And working in this sector can be very favorable due to the many facilities, especially due to the Internet. Furthermore, this industry has been growing exponentially during the last few years, which means that it becomes more beneficial every day.
So in case you desire to set up an e-commerce business in Dubai, you’ll need this license to do it. And in order to obtain this license, you must follow these steps of the application process:
- Choose a legal structure for your business.
- Select a suitable business location in the emirate.
- Register your company’s trade name.
- Apply for the e-commerce license.
- And then apply for the initial approval certificate.
- Draft a Memorandum of Association and a local service agent agreement.
- Register a physical office space.
- Get the final approval of the e-commerce license.
- Then import and/or export the requirements.
- And lastly, open a corporate bank account.
And you should also consider the benefits of getting an e-commerce license in this emirate, which are the following ones:
- No currency restrictions.
- Operating costs are very low.
- You can get a visa valid for 3 years.
- No import duties.
- No corporate and personal tax.
- 100 percent of ownership in free zones.
- And also autonomy for repatriation of capital and income.
How to renew Dubai Economic Department Trade License
If you need to renew your DED trading license, it is essential to follow three simple steps. The main step is getting all necessary documents, including the tenancy contract that must be valid for at least one month. Not meeting this first requirement will not allow you to continue the license renewal process.
After that, you need to submit your renewal application along with several documents. For instance, you must include a typed BR/1 form and a copy of the current trading license. Also, you need to submit a copy of the tenancy contract and some passport copies of the business partners and investors.
Once you have completed those two steps, you can now proceed with the fee payment to finish the process. You will first receive a voucher from the DED to make the payment. And after you make it, you can get your renewed license immediately.
- Is it necessary to get a trading license even if you are operating a branch in Dubai?
Yes. Regardless of the type of business you are operating, you must apply for a trading license in Dubai.
- Do you need separate trading licenses for different product categories?
No. It is possible to carry out business activities for multiple products by using one single trading license in Dubai.
- Is it a requirement to get other types of licenses besides a trading license?
Yes. And that is due to the requirements that there are for certain business activities. Furthermore, it is a requirement to get permission from other entities in some specific cases.
- What duties does your company need to fulfill once you get a trading license?
There are three main duties, which are these:
- Applying for the establishment card.
- Complete the native workers’ registration with the Labor Ministry.
- And completing the native workers’ registration with the General Authority of Pension and Social Security.
How can Connect Service Middle East help you get the trading license that you need?
Get the professional help you need to obtain the Dubai trade license for operating your business. With Connect Service Middle East by your side, you can get business licensing services for getting your license in no time. Besides, you will be able to save both time and money if you request our services.
Furthermore, you can also request other useful services for making your company more efficient. For example, get out business consultancy services for getting the information you require about several business processes. Other services that you will find useful are human resources outsourcing, PRO services, visa services, corporate sponsorship, and many others.
Would you like to contact Connect Service Middle East to obtain more information about the types of trade licenses in Dubai, UAE? If you have any questions, call us on +97143316688. You can email us at email@example.com, and you will talk to one of our representatives who will answer your questions.