Before you start the process of starting a business in Dubai – or anywhere else in the UAE – you must first choose the type of license you want. The essence of your business practices will determine this entirely. There are many types of licenses available, including commercial, manufacturing, and technical.
We’re going to concentrate on the commercial here. A commercial license allows you to trade, import and export products into, out, and throughout the UAE as well as sell some services. For a variety of reasons, the commercial license is very common in Dubai and the UAE.
For starters, Dubai is well-known around the world for its fantastic, strategic trading position, which is surrounded by large markets in Africa, Asia, Europe, and the Middle East. The UAE is extremely popular with cargo companies due to its numerous international airports and direct access to the Persian Gulf.
Finally, with the aid of a business setup representative, the emirate’s streamlined company incorporation process makes it simple to start trading. All businesses operating in Dubai are required by law to apply for one of the available licenses. One of the most common forms of business licenses is the commercial license, which enables a company to participate in trading relationships.
The Dubai limited liability company, which can be formed in mainland Dubai as well as any free trade zone in the Emirate, is the most common form of the company used for operating under a commercial license.
The fact that each free zone authority issues its own licenses is one of the unique aspects of starting a free zone company in Dubai; however, the commercial license is the same regardless of which special economic zone the company is registered in.
A free zone company’s commercial license, on the other hand, can only be used for trade activities inside the respective Dubai free zone. Commercial licenses can also be obtained for international companies that want to open branches or subsidiaries in Dubai.
Requirements for obtaining commercial licenses
Investors must meet certain conditions and take a few measures in order to apply for a trade license in Dubai. The first step will be to identify the primary form of operation that the company will engage in, as well as any related activities that can total up to ten per commercial license. The investor must determine which type of company to register in Dubai, as there are many types of companies to choose from.
The business must be registered with the Companies Registry in order to receive a Dubai trade license. Following this, the following documents must be sent to the Dubai Department of Economic Development and the UAE Federal Ministry of Economy in order for a commercial license to be issued
- An application form that includes the business name in both English and Arabic.
- The company’s registered address’s initial lease contract.
- The permit from Dubai Municipality’s Building Department allowing the company to use the office space as a business address.
- Proof of payment of the charge for obtaining a trade license.
The procedure required obtaining the license
It’s necessary to note that a commercial license cannot be obtained prior to a company’s official incorporation in Dubai. The following steps need to be followed:
- Choose a business form and operations that correspond to the commercial license’s requirements.
- Draft the company’s Memorandum and Articles of Association, which must include a list of the tasks that must be done.
- Obtain a VAT number and register the company with the Department of Economic Development in Dubai.
- Pay the fees associated with the registration of your business and the issuance of your commercial license.
Types of business activities allowed under commercial licenses
- Import and export activities
- Sale of electronic products
- Supply of brokerage services
- Real estate-related services
- Sale of construction materials.
Tourism companies operating in the emirate, as well as subsidiaries of international companies, must obtain a Dubai commercial license. Companies that provide healthcare facilities in Dubai are also covered by the commercial license.
It’s worth noting that a Dubai company’s trading license can only have ten operations. After the license has been granted, a business with less than ten operations may complete the list of services or products.
The renewal process of the commercial license
A Dubai commercial license is valid for one year from the date of issuance and can be renewed. The validity of a renewed trade license in Dubai is four years. The following documents must be submitted in order to apply for a Dubai trade license renewal:
- The original or a copy of the trade license,
- A copy of the office space lease contract,
- Approval from the relevant authorities, if it is necessary,
- Details of employees’ accommodation for companies with a foreign shareholder.
Benefits of having a commercial license in Dubai
Most foreign investors are unaware that obtaining a commercial license will provide numerous advantages to those establishing businesses in Dubai. Many of the benefits are mentioned as:
- If used in a free trade zone, tax exemptions and free repatriation of income to the foreign investor’s home country are available.
- The prospect of involving the Dubai business in foreign trade.
- Companies with a commercial license may have their headquarters in any part of Dubai.
- A Dubai commercial license allows businesses to sell several goods
- It simplifies the method of securing work visas for foreign nationals.
- Companies with commercial licenses do not have to undergo audits in order to extend their licenses.
The commercial license enables investors who establish businesses on Dubai’s mainland to carry out their operations and sell products and services in the other UAE Emirates as well as internationally.
One of the lesser-known aspects of the commercial license is that it facilitates international employee visa admission, allowing businesses to recruit a greater number of foreign workers. It is easiest to obtain a commercial license than going through the process of obtaining special permits for certain activities.