In the United Arab Emirates, investors and entrepreneurs must obtain a trade licence to conduct business, whether in the mainland or free zone jurisdictions. Having a trade licence assures your customers that your business is legitimate and complies with local rules and regulations.

When you have decided to start a business in the UAE, you will have to obtain a suitable trade licence to make sure your company is appropriately formed for the long term. Your license is affected by the company structure, type of business, and jurisdiction where you will operate your business.

Listed below are the three types of trade licences that investors need to consider as they start their business in mainland Dubai:-

Professional Trade Licence

According to the UAE government, businesses and entrepreneurs need to acquire a professional licence from the Department of Economic Development (DED) before providing their professional services to clients.

The professional license is meant to establish that the person or business is eligible or authorised to provide services in a particular profession. These licences are issued based on the professional skills and training aptitude the applicant holds. It is given to all professionals, artisans, designers, and craftsmen to help them set up a business in Dubai.

One can form several company structures with a professional licence: A Limited Liability Company (LLC), where a local sponsor (UAE national) gets 51% of the total company shares; and a Civil Company and a Sole Establishment where the foreign investor(s) is qualified for 100% ownership of their company.

In the process of forming a Sole Establishment or Civil Company, a local sponsor or service agent who is a UAE national is appointed to work on the legal formalities.

Commercial Trade Licence

A business involved in buying and selling goods and commodities or engaged in any trade activities has to obtain a commercial trade licence to function smoothly in the UAE. This licence is also used to set up a limited liability company (LLC) or a sole establishment. Moreover, it can be used for general trading and specialised trading activities in the United Arab Emirates.

UAE has different types of commercial trade licences. So if you plan to set up your business here, make sure you have the correct type of commercial trade licence that will allow you to run your trading activities as per your business specification.

Commercial trade license is issued to rental transportation services, construction companies, broadcast and communications companies, retail companies, real estate businesses, healthcare businesses, and other general trading entities.

Industrial Trade Licence

An industrial trade license is issued to businesses that perform industrial or manufacturing related activities in the United Arab Emirates. The license permits them to engage in activities related to manufacturing and producing different end products.

This Department of Economic Development Dubai is authorised to issue an industrial license. However, you might need additional approvals that might be required from the Ministry of Finance, the Ministry of Energy and Infrastructure and other government authorities, depending on the business activity you are associated with.

What are the Requirements for a UAE Trade Licence?

Following are legal requirements to acquire a trade licence in the UAE:

  • Plan the business category – whether it is professional, commercial, or industrial;
  • Decide the type of business activity;
  • Determine the legal structure of the business entity; and
  • Give a trading name of your business.

Starting your new business in Dubai

It can be challenging to identify all of the licences and permissions that apply to your specific business. Hence, it is recommended that you consult a business setup or trade licence expert to ensure you adhere to the requirements of the licencing and regulatory rules relevant to your business.

You start your company with a suitable trade licence, ensuring successful business growth and providing value-added business support to help your establishment thrive in a competitive market.