What is a Trade License?
In simple terms, a trade license is a certification acquired through the concerned judiciary that allows a company to practice its specified business activity under legal authority. In UAE, the Department of Economic Development (DED) is the statuary body that oversees and controls the legalities and procedures of trading licenses along with the institutional support of the Dubai Chamber of Commerce & Industry.
Different Types of Trade Licenses in UAE?
DED (Department of Economic Development) in Dubai has categorized every business under specific activity to help investors incorporate proper business structures on the mainland and start an LLC business in Dubai. Similarly, across all the free zone jurisdictions in UAE, the free zone authorities have a pre-defined list of business activities allowed to obtain a trade license.
There are 3 major types of trading licenses in UAE:
- Professional Trade License
- Commercial Trade license
- Industrial Trade License
Professional Trade License
Fundamentally, a professional trade license is issued to service providers, professionals, artisans, and craftsmen in Dubai and all around UAE. While the license allows 100% foreign ownership, 100% profit possession and freedom of operations, a local service agent must be appointed to complete judicial formalities. The license is issued on the basis of academic entitlement as well as professional skills.
Business Setups in UAE That Require This License
- Marketing consultancy
- Management consultancy
- Event Organizers
- Law firms and Associates
- Accounting companies
- Businessmen Forum
Advantages
- Fast approval of documentation from concerned departments in UAE
- Step by step licensing and company formation through government channels
- Easy procedures for visa, labor quota, family sponsorship and related services
- Fast and hassle free provision of corporate bank account
- Transparency in dealing with fixed annual fee from the business
- Suitable for Startups, SMEs and MNCs making their debut in UAE
Commercial Trade license
Commercial Trade License is issued to companies dealing in the buying and selling of goods, or any other form of commercial activity. General traders or specialized traders can apply for commercial license, engaged in either goods, commodities or even services. The license taker must abide by certain requirements, especially the business activity plan for which the number of goods the company will be allowed to trade in.
Business Setups in UAE That Require This License
- Imports and Exports
- Broadcasting and Communications
- Home Appliances Trading
- Electronics Trading
- Chemicals Trading
- Car Rental Services
Advantages
- The investor has several options in different types of company structures
- General Trading License allows trading of multiple goods under one certification
- Access to a diverse community of DED registered company
- Easy procedures for visa, labor quota, family sponsorship and related services
- Assisting with the opening of corporate bank accounts.
- Government facilitated corporate bank account provisions
Industrial Trade License
All business involved in Industrial and manufacturing activities are required to register for Industrial License to operate in UAE. The license allows the companies to convert or modify natural resources or raw materials through specialized units such as factories, plants or refineries. Due to such characteristics, the company is required to own a physical office space or warehouse within UAE to attain eligibility for Industrial License.
Business Setups in UAE That Require This License
- Appliances and Machinery Manufacturing
- Equipment and Engines Manufacturing
- Manufacturing of Food Products
- Casting of Steel and Iron
- Furniture Manufacturers
- Storage and Packaging
Advantages
- Investors are exposed with preliminary analysis before the licensing process
- Allows expansion of business parameters with reliable and trustworthy sources
- A judicial body oversees and safeguards all revenue transactions and proceedings
- An Industrial License welcomes further investors and consumer
- Zones gives special incentives to businesses operating in specific products
- International business community with state of the art infrastructure
Starting prices* for Trade License Renewals in UAE across jurisdictions
| Activity | Jurisdiction | ||
| Ajman FZ | SHAMS | UAQ | |
| General Trading | 17,200 AED | 16,500 AED | 9,500 AED |
| Commercial Trading | 11,500 AED | 2,500 AED | |
| E-commerce | 18,210 AED | ||
| 1 Activity | 13,310 AED | ||
| 2 Activity | 12,010 AED | ||
| 3 Activity | 14,600 AED | ||
| Consultancy | 2,500 AED | ||
| Micro Business | 2,500 AED | ||
| Freelancer | 2,500 AED | ||
*Business license cost only.
Documentation Required to Obtain a Trade License in UAE
The procedure and documentation is quite simple and straightforward which involves a systematic process starting from selection of business license, activity, trade name registration, documentation, approvals, pay fees and registers
- Select the licensing structure the business falls into – Professional, Commercial, Industrial
- The business must decide the activity/activities (Maximum 10) it plans to pursue
- Submit application to register a trade name and attain legal status
- Secure an office space from designated authority to conduct operations
- Produce documentation such as MOA and related government approvals
- Pay required fees and submit final application to attain your respective license
Trade License Cancellation
Trade license cancellation or Liquidation is a facility that allows the company to roll-back and withdraw its business from the UAE. The reasons may vary from insufficient funds, debt, corporate fraud or personal issues. The process requires the company license to be fully cancelled - which is irreversible. To get fast, hassle free and cost effective company liquidation solution, the investor must hire a professional business consultancy agency to give legal guidance and conduct all the necessary procedures.
During this process, the registered agent liaisons with UAE departments, auditors and liquidators for government clearance, closure of banking accounts, labor immigration and other documentation. The process is as follows:
- Preparation of paperwork for company liquidation
- Prepare the owner/shareholders for company board resolutions
- Connect investors with liquidators
- Submit all documents to DED to get company dissolution letter
- Propagate company liquidation notice through newspaper
- Acquire clearance letter from Etisalat
Trade License Renewal
If you have the subsequent documents after one-year validity of Trade License, you can further extend it to a four-year term. Depending on the type of business, permissions will be required from DED and other regulatory bodies based on the following:
- Copy of Trade License issued to the investor
- Registration & Licensing Application Form – typed and stamped
- Copy of EJARI Registration Certificate and Tenancy Contract
- Submit all documents to DED to get company dissolution letter
- Passport Copies of all shareholders
