Starting a business in Dubai is an adventure full of opportunity. Investors and entrepreneurs from different parts of the world come here to do business. The most critical requirement, however, is the UAE trade license, which grants legal authority to operate in this dynamic environment. So, if you are planning to establish a business here, securing this license should be at the top of your to-do list.
In this article, we will shed light on the trade license in UAE, its meaning, and explore the main costs involved in obtaining one.
Trade license in UAE
A UAE trade license is the authorization granted by the government of the Emirates to businesses and companies, allowing them to operate legally. Every business, regardless of its nature, industry, or size, must obtain this license to comply with UAE law, whether operating on the mainland or in a free zone. Depending on the industry and activities conducted, there are various types of trade licenses in the UAE:
- Commercial License: Covers trading of goods, import-export, and logistics.
- Industrial License: For manufacturing-based activities.
- Professional License: For service-based activities.
- Tourism License: For tourism-related activities.
- Agricultural License: For livestock and agricultural businesses.
Trade license validity:
A trade license in the UAE is valid for one year from the date of issuance and must be renewed upon expiry. To continue operating legally in the country, it is essential to renew the trade license on time. Failing to do so can result in consequences such as fines, blacklisting, or even a prohibition on conducting business.
Process to obtain UAE trade license:
Let us quickly walk you through the leal procedure to get a trade license in UAE or Dubai:
Decide business operations
Choose from over 2000 activities provided by the Department of Economic Development (DED). The activity you select will determine the type of license you will need.
Choose a business structure
Decide the legal form of your business, such as an LLC, a sole establishment, a branch, or a joint stock company, based on your business goals.
Choose your business name
Select a suitable name for your business and get it registered. Ensure the name is not offensive, as it may be rejected otherwise.
Receive initial approval
Apply for initial approval with the DED. Once you receive the NOC, you can proceed with the business license application.
Get additional approvals
Some activities require permissions from external bodies like the municipality, ministry, etc., depending on the industry.
Submit license application
Complete the application form and submit it with the DED or the relevant free zone authority. Ensure all paperwork is in order and pay the application fees.
Collect your license
Your application will be reviewed, and upon approval, your trade license will be issued.
UAE trade license cost breakdown:
Let us have a closer look at the costs of obtaining a trade license in the UAE. The costs associated with a trade license in the UAE vary depending on whether you are setting up on the mainland or in a free zone. On the mainland, you can expect to pay around AED 17,900* for a professional business license. In a free zone, the cost of trade license is approximately AED 11,050*. Several components factor into the cost of obtaining a trade license in the UAE:
Initial approval fees
This is the fee paid to the Department of Economic Development (DED) to secure the NOC (No Objection Certificate) for your business. Once approved, you can proceed with the business license application.
License fees
License fees must be paid when applying for the license through the DED or the relevant free zone authority. Additionally, there are annual charges for renewing the license.
Additional charges
Based on your specific business needs, you may incur the following expenses:
- Trade name and intellectual property registration fees
- Immigration and visa fees for yourself and employees
- Rental and licensing costs for office space
- Fees for specialized permits, such as municipality fees
- Typing and notarization fees for essential documents
- Service agent fees, if required
- Medical and Emirates ID fees
- PRO services fees
Factors affecting the cost of a trade license
The cost of a trade license Dubai may vary based on various factors, including:
- Type of license: Different licenses, such as commercial, agricultural, or professional, may have different costs.
- Location: The cost of a UAE trade license varies between mainland and free zones.
- Legal structure: The business’s legal structure can influence the overall cost. An LLC may cost more than a sole establishment.
- Office requirements: The size and location of the office can impact the total expenses.
- Additional approval fees: Some businesses may need special approvals from various government departments, which can add to the costs.
How to reduce the cost of trade license Dubai:
Here are some quick tips to reduce the overall cost of the UAE trade license:
- Choose the right business structure according to your budget. For example, starting a sole establishment can be cost-effective for you.
- Consider a free zone, as they offer more affordable trade license packages. There are more than 40 top-notch free zones in the UAE.
- Optimize the office premises. You can save on rent through rented shared spaces as well.
- Consider doing business along with a partner. That way, you can share the license costs.
- Make sure to stay legally compliant in all parts to avoid penalties and unnecessary fines.
- Stay updated on the latest government incentives and benefit from them.
Cheapest trade license in UAE:
There are plenty of options for the cheapest trade license in UAE for those who want to start a business on a budget. Free zones remain a top choice for affordable business setup in Dubai, providing top-class amenities and easy setup at low costs. You can get the cheapest trade license in JAFZA free zone starting at just AED 5,500* and in Sharjah for AED 5,750*.
Other than free zones, the mainland also provides some affordable license options, including e-commerce, tourism, and freelance licenses. You can expect to pay starting from approximately AED 17,900* for a mainland business license in Dubai.
Get trade license Dubai with Dubiz
In this article, we looked into the important aspects of UAE trade licenses and also got an idea of the process. It is very essential to understand so, as it helps in business and financial planning for your venture in Dubai in advance.
Consulting professional business experts in Dubai, such as Dubiz Business Setup, can give you a better overview and clearer picture of the costs, helping you start planning strategically. Besides that, they have a team of experts who can assist you in navigating the entire business setup process in Dubai from A to Z in the most efficient and cost-effective manner.
Visit them today at www.dubiz.com.