Businesses can’t be established simply at the stroke of a pen. You have to follow a certain process that can involve a series of steps and tons of paperwork. And obtaining a relevant trade licence is one of them. Ahead, you will see some common steps to follow if you are seeking a DED licence for your business formation in Dubai.
What is a Dubai DED Licence?
A trade licence is a fundamental requirement for an individual looking to start a business in Dubai. As Dubai is divided into three jurisdictions or territories for business incorporation – Mainland or Onshore, Free Zone & Offshore – to support and meet different needs of different businesses, you have to choose one that checks all the boxes. At present, Dubai has about 30 free zones, each with different benefits and regulations. And the left-out area within the boundaries of the city that doesn’t come under the Dubai free zone jurisdiction is the mainland territory of Dubai. To get a better understanding of both the jurisdictions, you may read our blog on mainland vs. free zone in Dubai. A business owner will only need to register with Department of Economic Development (usually called DED) in Dubai if they want to set up in Mainland Dubai.
To understand the Dubai DED licence you must know that you have to choose between the Dubai Mainland and Dubai Free Zone. If you opt for the former, then you are required to apply for your trade licence with the DED Dubai, which is the governing authority of mainland businesses in the emirate. And this trade licence that you receive from DED to be able to operate as a legal entity from the onshore territory of Dubai is known as the “Dubai DED licence”. Simply put, DED licence in Dubai is nothing but a trade licence issued by the DED in Dubai to individuals intended to establish a mainland company in Dubai.
What is the process to apply for a DED Licence in Dubai?
After you choose a mainland location in Dubai for your business formation, you have to work towards getting a DED licence to conduct the intended activities from the territory. But before you apply for one you have to determine whether the chosen activity qualifies for the complete business ownership or not. If not then you must partner with a local Emirati citizen or company (can be more than one) and share 51% of your ownership with them. Furthermore, you might be required to attain special approvals from external authorities depending on the type of trade activity selected. Your business setup advisor can help you figure out all this and come up with the best possible solution. Now let’s talk about the general steps to obtain the DED licence in Dubai.
Step 1. Determine your mainland business activity. DED approves about 2000 commercial and industrial business activities that are eligible for 100% foreign ownership.
Step 2. Figure out the DED licence type that covers all the desired economic activities.
Step 3. Choose a name for your mainland company in Dubai that is in line with the requested trade activities and most importantly with the UAE standards and trade name guidelines. At this stage, you will receive a trade name certificate that you have to submit for the DED licence in Dubai.
Step 4. Decide the legal form of your mainland/LLC company in Dubai. DED allows you to opt for 16 legal forms:
- Sole Proprietorship
- Partnership Company
- One Person Company (LLC)
- Limited Liability Company
- Simple Limited Partnership
- Private Share Holding Company
- Public Share Holding Company
- Branch of a Foreign Company
- Representative Office
- Civil Company
- SME Licence
- Intelaq (Home-based business for UAE Nationals)
- Branch of a Dubai-based Company
- Branch of a UAE-based Company
- Branch of a GCC-based Company
- Branch of a Free zone Company
This is to be noted that the type of business activity, the number and nationality of owners, and the ownership options will influence the entity’s legal structuring.
Step5. Receive initial approval from DED. Here you are required to furnish a few documents and details to DED such as:
- Unified number or ID number
- The parent company’s board resolution to open a branch in Dubai, appoint the manager and list the company’s activities
- Basic details of your partners, manager and LSA (if applicable) such as an address, contact information, identification number (Emirates ID number, passport or unified number), position in the company and ownership shares
The process of acquiring initial approval hardly takes 10 minutes. The certificate helps you in obtaining other documents that are essential to attain the trade licence from Dubai DED.
Step 6: Buy or rent out commercial space in a mainland jurisdiction that suits you the best. At this step, you will be provided tenancy documents including EJARI.
Step7: Complete all the paperwork required by Dubai DED for licence issuance. The list of those documents includes:
- Valid trade name certificate
- Valid Initial Approval Certificate
- Tenancy contract approved by Dubai Municipality and attested by RERA (Ejari)
- Memorandum of Association (Applicable for LLCs, One Person Company, Private Shareholding Company (Private Joint Stock Co), Public Shareholding Company, Simple Limited Partnership, Partnership Company and Civil Company)
- Local Service Agent Agreement (Applicable when a UAE national, represents your business with regard to licensing and compliance.)
- Approvals from Government bodies (Applicable to certain business types)
Note: Applicants can apply for the Trade Name Certificate and Initial Approval Certificate through DED’s online portal. However, for the drafting of the Memorandum of Association (MoA) they must approach a law entity such as the DED Legal Affairs or Notary Public. In addition, the tenancy contract must be registered with EJARI for attestation. And the additional approvals can be attained from the relevant federal and local government offices only if the chosen business activity demands. Once the above-listed documents are ready, you can proceed with your trade licence application online.
What is the cost of DED licence in Dubai?
No two business persons have the same requirements or budget. Therefore, we can’t quote the exact price of the DED licence in Dubai until we know your requirements and decisions. From the cost of collecting initial approval to attestation fees for legal documents to the rental amount of the office space, myriad factors affect the overall cost of acquiring a DED licence. However, it is safe to say that the cost of obtaining a Dubai DED licence can range anywhere from AED 15,000 to AED 50,000 depending on the choices you make on your way and the additional costs caused by them.
What is the cheapest, fastest and easiest way to get the DED licence in Dubai?
Applying for the trade licence in Dubai online under your own steam can be the cheapest way to get the DED licence ONLY if you are hands-on with the process like a pro, know the UAE company formation rules and regulations adequately, make the right choices not to regret later and complete the paperwork flawlessly. However, the fastest, easiest and most effortless way to get a DED licence in Dubai is to work with one of the best business setup advisors in Dubai such as Adam Global. Click here to know how you can find the right Dubai business advisor.
Get in touch with one of our business formation consultants in Dubai to obtain your DED licence in the most cost-effective and time-efficient manner. You don’t have to pay for your first consultancy with our Dubai DED licence specialist.