One of the business licences you need to establish your company in the mainland area of the UAE is a commercial licence. The other two common business licences in Dubai, UAE are Professional Licence and Industrial Licence. This is a mandatory requirement, so you have to get acquainted with the procedure to apply for the same. Granted by the Department of Economic Development (DED), the commercial licence enables foreign entities to set up and operate their business legally on Dubai’s mainland, a non-free zone area. The licence allows the holder to perform the chosen business activities, which can be either trading in goods or providing services, within or beyond the territory.
Which licence is best for my company formation in Dubai?
It is not about what is the best business licence, but the right business licence. There are more than 3000 activities in the UAE that can be capitalised on legally as a business person or investor. Which type of trade licence an entity needs to apply for company formation in Dubai, UAE totally depends on the nature of the business or activity they choose to perform. For instance, if you simply want to open a business formation consultancy firm then you must acquire a professional licence, on the other hand, if your business involves the manufacturing of a product or any industrial activity then you have to receive an industrial licence. Similarly, to be able to supply goods or services to the public or other businesses or governmental entities within and outside of the jurisdiction, one has to obtain a commercial licence.
What is a commercial licence in Dubai, UAE? And what activities are permissible under a commercial licence?
Simply put, a commercial licence is an official document that allows its holder to trade in any type of goods and sell certain services. These goods can be imported and sold in the UAE, exported for sale outside of the UAE, or traded solely within the UAE.
Commercial Licence Activities
There are thousands of business activities that are approved by the Department of Economic Development (DED) under a commercial licence. You may request the complete list of permitted commercial business activities from the DED or approach a business setup specialist for the same. Below is a list of just a few permissible commercial activities in Dubai, UAE for your understanding:
- General store
- Aircraft and train spare parts trading
- Bags and Packaging material trading
- Beauty and baby care essentials trading
- Animal skin trading
- Amusement equipment and supplies trading
- Exchange and financial services
- Flowers and plants trading
- Home appliances trading
- Filling stations
- Foodstuff supply
- Building maintenance services
- Surveillance services
- Cleaning services
- Advertising services
- Plumbing and sanitary contracting
- Radio, T.V. station, cinema theatre equipment installation and maintenance
- Automobile trading
- Shoe trading
- Tanks and silos trading
- Cold storage
- General warehousing
- Self-storage services
- Rental services
- Restaurant management
- Readymade garments and many more
Why commercial licence is most popular in Dubai, UAE?
The commercial licence is the most common licence in Dubai and the UAE. And it’s easy to see why! One, most entrepreneurs prefer the mainland to free trade zone for their business in Dubai, UAE. Two, trading of goods (raw material or final products) and services is less hassle-free, easier to perform and cheaper than manufacturing them from scratch and supply to the wholesalers for further sale. Three, Dubai is one of the easiest countries in the world to do business. Business persons and new entrepreneurs flock to the country to make the most of its strategic trading location to make their business reach far and wide. It is easy to trade with Africa, Asia, Europe and the Middle-East from Dubai, UAE as they are located in the vicinity of the emirate plus the country has no dearth of international airports and seaports. Jebel Ali is the world’s 9th busiest port, the largest man-made harbour, and the biggest and by far the busiest port in the Middle East.
What are the benefits of having a commercial licence in Dubai?
Establishing a business in Dubai under a commercial licence is always advantageous for business persons. Let’s check out some major ones:
- A commercial licence not only acts as a regulation but protection as well for trading companies in Dubai
- Just one commercial trade licence allows the holder to perform a minimum of ten business activities
- Enough choices to select the type of company the applicant wants to register
- Several similar business activities can be conducted under one commercial licence
- You can enjoy exemption from taxes and the free repatriation of capital gains when used in a free trade zone
- It gives you the freedom to engage in international trading activities
- The licence eases the procedure of acquiring employment visas for foreign workers and the company can hire a large number of foreign employees
- Trading companies that function under a commercial licence don’t need to be audited to renew their licence
- The procedure for getting a commercial trade licence in Dubai is the easiest of all. However, if the business involves very specific activities, you have to obtain special permits and authorizations in addition to the commercial licence
Is commercial licence for mainland businesses not free zone companies?
Commercial Licence in the UAE is granted by all three jurisdictions. A limited liability company (LLC) in Dubai can be incorporated in the mainland region as well as any of the free trade zones in the emirate under the commercial licence issued by the regulating authority of the jurisdiction. The fact that each free zone authority grants its own licences is one of the specific aspects of starting a free zone company in Dubai; however, the commercial licence is the same regardless of which special economic zone the business is registered in. A free zone company’s commercial licence, on the other hand, can only be used for trade activities inside the respective Dubai free zone. Commercial licences can also be acquired for international companies that desire to open branches or subsidiaries in Dubai.
How can I get a commercial licence in Dubai?
The process of obtaining a commercial licence in Dubai is pretty straightforward under the guidance of an experienced business formation specialist or a qualified Dubai business advisor. It starts with choosing the suitable location and the business activity as until you are not sure about the nature of your business you won’t know what place would be the best for you and what licence you would need to conduct the desired business activity. Let’s take a look at the four key steps involved in the process of acquiring a commercial licence for your Dubai company.
1st Step: First and foremost, determine the business activity
Trading, agriculture, hospitality, manufacturing, there is a cartload of commercial activities that can be carried out in or from mainland Dubai. Decide the industry in which you will trade and ascertain the nature of your business. Unlike many free zone businesses that are restricted from certain activities based on their location, mainland businesses are free to trade in any of the 3000+ DED-listed activities.
2nd Step: Find a perfect site for your company
The investor must select the most feasible location prior to applying for the Commercial Licence. Whether free zone or mainland? Keeping your business requirements and goals in view, you have to decide what location checks all the boxes. It’s the location of your company that decides the fate of your business, so you have to be very mindful while choosing one. Both the locations, mainland and free zone, have their own set of advantages to serve you in the best possible way. If you ask us to put our two cents, we would say go for the mainland option. Why? You may ask. Well, with a mainland company setup comes 100% ownership and tons of freedom! Freedom to:
- Trade within Dubai, across the UAE & globally
- Expand your presence
- Hire more employees
- Choose your office space
- Apply for unlimited visas and grow your team
- Diversify your offerings
- Deal with the UAE or GCC governments and take on potentially lucrative contracts
- Create a flexible startup
And the cherry on the top is setting up a mainland company in Dubai is cheaper in comparison to a free zone company. However, choosing a mainland jurisdiction also keeps you from the benefits that a free zone jurisdiction offers to its licence holders such as a quick & easy incorporation process, ongoing business support and financial incentives such as tax exemptions and zero currency restrictions, 100% capital & profits repatriation. The setup that’s right for you will depend on the nature of your business. We can help you make this decision, advising on the best option for your specific requirements.
3rd Step: Choose your company name
Pick a perfect name for your business in line with the naming norms in Dubai, UAE that are easy to follow, such as the name must not – comprise any offensive or blasphemous terms, be identical to well-known brands or organisations, abbreviation of your name to avoid any rejection at the time of registration. This is the simplest yet significant step in the entire company setup process and should be taken with utmost care. ‘Tis the name that’s soon going to be your identity, and you would want to have it trademarked in the later stages for all good reasons after your business reaches the next level and needs to be safeguarded against copycats. Once again, a qualified business set-up advisor in Dubai can help you choose the right name by checking the availability of the chosen name. Not only that but with one of the best business setup experts in Dubai by your side you don’t have to worry about any legwork or paperwork required to you in the company registration process.
4th Step: File your licence application
After deciding the type, location and name of your company, it’s time to take the final step to be able to trade in Dubai, i.e., making a commercial licence application. If you are incorporating your company in Dubai mainland, you can apply for the licence directly to the DED. On the other hand, if your chosen location for the company is one of 45+ free zones in the UAE, then you can directly file your licence application with the respective free zone. Hiring a business setup service professional is always a smart idea if you want to save your valuable time, money and effort while minimizing the chances of delay in the licence application process due to silly mistakes.
Documents required for a commercial licence in Dubai
Whether you are applying for the commercial licence by yourself or through a company formation expert, in general, you are only required to provide a few details and some basic documentation, including:
- The duly-filled application form, containing the business name in both English and Arabic
- The original lease contract for the company’s registered address
- The permit from Dubai Municipality’s Building Department stating that the company can use the office space as a business address
- Company name approval letter issued by DED
- Proof of payment of trade licence fee
- Two colour passport size photos of the applicant
The commercial licence renewal process in Dubai
A Dubai commercial licence comes with a one-year validity from the date of issuance and has to be renewed before it expires. Once renewed, the trade licence in Dubai is good for the next four years. Log on to DED website to renew your Dubai trade licence and select the ‘Renew licence’ option from the eServices portal. Enter your licence number, press renew and pay the required fees. As the payment processes successfully your trade licence gets renewed. Make sure the following documents are in place for Dubai trade licence renewal:
- Trade licence copy
- Office space lease contract copy
- Additional approvals from the relevant authorities, if applicable
- Details of employees’ accommodation for companies with a foreign shareholder
Cost of commercial licence in Dubai
Depending on various factors, the cost of obtaining the commercial licence in Dubai can reach from AED 30,000 to AED 50,000 in a wink considering various associated costs such as expenses made towards registrations, visas, premises, approvals. The fee of the licence alone is approx. AED 10,000. If you are seeking the most cost-effective way to start a commercial business in Dubai, it is advisable to consult with one of the best business setup advisors in Dubai, such as Adam Global.
Need professional help?
Acquiring a Dubai commercial licence can be an easy affair if you are au courant with the right knowledge or doing it under the guidance of a reliable and competent business consultant in Dubai like Adam Global Dubai. To ensure that the entire process is smooth and hassle-free from beginning to end, it is important that all the required documents are in place and your licence application is complete at the time of submission and free from errors. And that’s what we are here for. Get in touch with us to know how we can help you in piecing together bit by bit the dream of your company formation in Dubai. From setting up your company to developing & scaling up your business to everything in between, you may count on our proficient business setup professionals for every aspect of your business.