6 Step To Commercial License in Dubai: An Easy Guide

Dubai is a shiny, exciting city in the United Arab Emirates (UAE) that’s perfect for starting a business! It’s a great place to be an entrepreneur, no matter how big or small your business idea is. 

Dubai has a great location for trade, fancy buildings and technology, and a fast-growing economy full of new ideas.

If you want to open a shop or offer a service in Dubai, the first thing you need is a commercial license in Dubai. This license is like your official permit to run a business there and sell things or do work for people.

What is a commercial license in Dubai?

A Commercial License in Dubai, issued by the Department of Economy and Tourism (DET) Dubai Department of Economy and Tourism website, formerly known as the Department of Economic Development (DED), is a legal document authorizing a company to trade specific goods or services within the UAE, and potentially beyond.

There are various types of Commercial Licenses available in Dubai, each catering to different business activities and structures. The most common ones include:

• General trading license: This license allows you to trade a wide range of products, with some exceptions like food and vehicles.
• Commercial trade license: This license is more specific and restricts trade to a limited set of products. A good example would be a license to trade specifically in electronics.
• Professional license: This license is required for businesses offering professional services like consultancy, engineering, or IT solutions. 
• Industrial license: This license is mandatory for companies involved in manufacturing or industrial activities. The DET provides a guide on industrial licenses.

Benefits of obtaining a commercial license in Dubai

• Legal framework: A Commercial License provides a legal framework for your business operations in Dubai, ensuring compliance with local regulations.
• Market access: The license grants you permission to operate within the Emirate and conduct commercial activities.
• Business bank account: With a license, you can open a corporate bank account for your business transactions.
• Visa sponsorship: You can sponsor visas for employees under your company’s name, allowing them to work and reside in Dubai.
• Tax advantages: Dubai offers attractive tax benefits for businesses operating under a Commercial License. It’s recommended to consult with a tax advisor for specific details.

Steps to obtaining a commercial license in Dubai

The process of acquiring a Commercial License in Dubai typically involves the following steps:

1. Choose your business activity: Define the specific goods or services your company will offer. Researching market demand and identifying a niche can be helpful in this stage.
2. Select a company structure: Decide on a business structure like a sole proprietorship, limited liability company (LLC), or branch of a foreign company. Each structure has its own advantages and considerations. You can find a helpful guide on choosing a business structure with a professional business setup provider.
3. Choose a legal location: Determine the location for your business operations. Dubai offers options like operating in the mainland (directly under the DET) or within a Free Zone (with specific regulations and benefits). The DET provides a comparison of these options here: 
4. Register your trade name: Reserve a unique name for your business through the DET.
5. Apply for the license: Submit the required documents and fees to the DET. The specific application process may vary depending on your chosen structure and location.
6. Obtain approvals: Secure necessary approvals from relevant government authorities (e.g., municipality) depending on your business activity.

Documents required for a commercial license

The specific documents needed for a Commercial License application may vary depending on your chosen business activity and structure. 

However, some general requirements include:

• Completed application form
• Passport copies of company owners and shareholders
• Business plan outlining your company’s goals and strategies
• Lease agreement for your office space
• NOC (No Objection Certificate) if applicable, such as if you’re relocating a business from another Emirate

Cost of obtaining a commercial license 

The cost of acquiring a Commercial License in Dubai can vary depending on several factors, including:

• Type of license: License fees differ depending on the category (e.g., General Trading License vs. Professional License). You can find a general fee structure on the DET website, but specific costs are best confirmed during the application process.
• Business activity: Certain industries may have additional fees associated with permits or regulatory approvals.
• Location of operation: Operating within a Free Zone may have different fee structures compared to the Dubai mainland.
• Number of visas required: Sponsoring employee visas incurs additional costs.

Generally, license fees range from a few thousand Dirhams (AED) to tens of thousands, depending on the chosen category. 

There are also additional costs for services like visa processing, medical testing, and business setup consultancy (if you choose to utilize that service).

Recent updates on commercial licenses in Dubai

Dubai is constantly working towards streamlining the business setup process and enhancing its attractiveness to foreign investors. Here are some recent updates to keep in mind:

• 100% foreign ownership: As of June 2021, Dubai allows 100% foreign ownership for over 1,000 designated business activities, making it even more attractive for international entrepreneurs.
• DED trade license: This new license simplifies business setup for online businesses and startups with lower fees and streamlined processes 
• E-Services platform: The DET offers a user-friendly online platform for license application, renewal, and other services, making the process more convenient.

Additional Considerations

• Business setup consultants: Consulting with experienced business setup specialists in Dubai can ensure a smooth and efficient licensing process. They can provide guidance on choosing the right license type, navigating regulations, and completing the application accurately.
• Visa requirements: Depending on your business structure and needs, you may require visas for yourself and your employees. Explore the different visa options available through the General Directorate of Residency and Foreigners Affairs (GDRFA).
• Taxation: While Dubai offers tax advantages, it’s essential to understand the specific tax implications for your business. Consider consulting with a tax advisor to ensure compliance with local tax regulations.

List of activities under the UAE commercial license

While the DET doesn’t publish an exhaustive list online due to the sheer volume of possibilities, there are over 2,000 business activities you can choose from when applying for a Commercial License in Dubai. 

These activities are categorized into broad groups, and here’s a general breakdown:

• Trading activities: This is the most extensive category and encompasses the buying and selling of a wide range of goods. Examples include:
  • Import and export of various products (clothing, electronics, machinery)
  • Retail trade (clothing stores, electronics stores, grocery stores)
  • Wholesale trade (supplying goods to retail businesses)
  • Commission-based sales
• Services activities: This category covers businesses offering professional or intangible services. Examples include:
  • Consultancy services (management, IT, legal)
  • Advertising and marketing agencies
  • Travel and tourism agencies
  • Educational institutions (private schools, training centers)
  • Hospitality services (hotels, restaurants, cafes)
  • Transportation and logistics services (car rentals, shipping)
  • Information technology services (software development, web design)
• Industrial activities: This category is for businesses involved in manufacturing or industrial processes. Examples include:
  • Food and beverage production
  • Chemical and pharmaceutical manufacturing
  • Metal fabrication and engineering
  • Textile and clothing manufacturing
• Tourism activities: This category caters to businesses operating within the tourism sector. Examples include:
  • Tour operators and travel agencies
  • Hotel establishments and accommodation services
  • Restaurants and cafes catering to tourists
  • Event management companies specializing in tourism-related events
• Agricultural activities: This category is for businesses involved in agricultural production or related services. Examples include:
  • Farming and cultivation of crops
  • Livestock breeding and animal husbandry
  • Fishing and aquaculture
  • Forestry and related services

Important note: This list provides a general overview, and specific activities within each category may have additional requirements or limitations. It’s crucial to thoroughly research the specific activity you plan to undertake and ensure it aligns with the type of Commercial License you choose.

Finals words

Obtaining a Commercial License in Dubai is a straightforward process with immense benefits for aspiring entrepreneurs. By carefully considering the types of licenses available, the application procedures, recent updates, and additional factors like visas and taxation, you can confidently embark on your business journey in this dynamic Emirate. 

Remember, consulting with business setup specialists and legal professionals can provide valuable guidance and ensure a smooth transition into the exciting Dubai market.