Commercial License In Dubai, UAE
Acquire Your Commercial License for Business Ventures
A commercial license is issued to those involved in trading specific goods or services. Unlike a General Trading License, a Commercial Trade License in Dubai is more focused, covering a limited range of products. Certain items, such as automobiles and software, can only be traded with a Commercial Trade License, as they are not included under the General Trading License.
If you plan to establish a trading company, it can be incorporated as a Limited Liability Company (LLC), depending on the number of shareholders. An LLC can be formed with as few as one shareholder and up to a maximum of 50. The company’s liability is limited by its paid-up capital, and each shareholder’s liability is restricted to their financial contribution to the company. A subsidiary company, on the other hand, is owned by another company rather than individual shareholders.
As of June 1st, 2021, Dubai’s Economy permits 100% foreign ownership for around 1,000 designated commercial activities. Before this regulation, any company established on the mainland required 51% of its shareholding to be owned by a Local Partner, who had to be an Emirati citizen or a UAE-incorporated company owned 100% by Emiratis. This rule still applies to companies engaged in commercial activities not listed under the new regulation. It is advisable to consult an experienced business setup consultant to verify whether your proposed commercial activity falls under the designated list or not.
What Is a Commercial License?
A Commercial License in Dubai is essential for companies involved in buying, selling, or trading activities. To establish a business in Dubai, companies must apply for a valid commercial license. Three jurisdictions in the UAE issue these licenses, and the investor must select the most suitable one based on their business needs.
Dubai's Strategic Location
Dubai’s prime geographic position makes it a key trading hub, connecting Asia, Africa, and the rest of the world. The city is supported by excellent international infrastructure, including Dubai International Airport—the third busiest airport globally—and world-class seaports like Port Rashid and Jebel Ali. This infrastructure, coupled with a business-friendly environment, makes Dubai an ideal location for trade and business activities.
Business Activities under a Commercial License
Before applying for a commercial license, it’s crucial to identify the type of business activities that will be carried out. Common activities covered under a commercial license include:
- Logistics
- Import and export
- Tourism and travel
- Brokerage
- Product-oriented sales (e.g., electronics, construction)
- Real estate and rental businesses
Once you’ve decided on your business activities, you’ll need to register your trade name and submit the required documents to the Department of Economic Development (DED) and the UAE Federal Ministry of Economy to obtain the license.
Required Documents for a Commercial License
To apply for a commercial license, the following documents are needed:
- Company name (in both English and Arabic)
- Lease contract for the registered business address
- Memorandum of Association (MOA)
- Dubai Municipality Department permit for the business address
- License fee payment proof
The commercial license is valid for one year and must be renewed annually. Renewal requires additional documents such as a lease contract copy, approvals from authorities (if needed), and information on staff accommodation for foreign-owned companies. Licenses that have been renewed remain valid for five years.
COMMERCIAL LICENSE RENEWAL IN DUBAI – DOCUMENTS NEEDED:
Advantages of a UAE Commercial License
Acquiring a commercial license in Dubai comes with many benefits, such as:
- Ability to trade multiple products
- Freedom to operate across the UAE
- No mandatory auditing for license renewal
- Ability to sponsor employment visas for foreign workers
- Permission to engage in foreign trade
- Easier financial reporting
- Simple process for opening corporate bank accounts
- 100% profit repatriation and tax exemptions for free zone companies
Steps to Obtain a Commercial License
The process of obtaining a commercial license involves several steps:
- Confirm Business Activity: Determine your business type and products.
- Initial Approval: Apply to the DED for initial approval.
- Local Sponsor: For mainland companies, secure a local Emirati sponsor
- Legal Structure: Draft the Articles of Association (AOA) and MOA.
- Trade Name Approval: Select a unique, compliant trade name.
- Office Space: Rent an office or commercial space and complete Ejari registration.
- Ministry Approvals: Obtain additional ministry approvals as required.
Dubai offers immense advantages for businesses, thanks to its strategic location, world-class infrastructure, and supportive business environment. Follow the necessary procedures, and submit all documents, and you can easily establish your business with a commercial license.
THE STRATEGIC LOCATION OF DUBAI ?
Prior to the application for a commercial license in Dubai, one
needs to decide on the trading activities that are going to be
conducted under the same. Have a clear understanding of the
type or category of your business activity before you set up a
business in Dubai. Business activities related to buying and
selling and certain service-oriented endeavours come under Commercial License. Key activities included in the commercial license in Dubai, UAE are listed below.
- Logistics
- Import and export
- Tourism and Travel
- Import and Export
- Brokerage
- Product-oriented sales (electronics, construction, shops, stores etc)
- Real Estate
- Rental business
