Business License in Dubai, Types and Cost

The motivations for establishing a company in Dubai or the United Arab Emirates are numerous. One primary reason is the attractive location, coupled with the exceptional lifestyle that Dubai offers, including its perpetual summer. The tax exemption is a significant draw, as mainland companies, comparable to a German GmbH, are not subject to income or corporate taxes, and VAT is a minimal 5 percent. Dubai also financially supports start-ups, and the free zones significantly ease international trade. The free zone company is particularly appealing for foreign founders regarding tax law. Dubai boasts more than 44 free zones, allowing nearly any industry to establish a company with the appropriate license.

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However, there are specific requirements to establish a company in Dubai. Essential documents include a business plan, proof of address, and identity verification for shareholders and directors. Most crucially, obtaining a business license in Dubai is mandatory to confirm the company’s legality. Residency and visas for Dubai are not necessary, but selecting the right business license among the various options is vital. There are three primary categories of business licenses in Dubai: trade, industry, and services. Additionally, there are numerous special licenses and permits available for influencers or freelancers.

What is a Business License in Dubai?

A business license in Dubai is a permit issued by the Dubai Government that allows a business to operate legally. This is a mandatory requirement for all businesses in Dubai, UAE, regardless of their size or industry.

Business licenses are issued by local government authorities, such as cities or counties. The requirements for obtaining a business license can vary, but they typically include providing detailed information about the business, such as its name, address, and type of operation.

Business licenses in Dubai are crucial for several reasons. They ensure that businesses comply with local laws and regulations, providing a framework for legal and safe operations. Additionally, they protect consumers by guaranteeing that businesses are properly licensed and insured, thereby fostering trust and reliability in the marketplace. Securing the appropriate business license in Dubai is a critical step for any enterprise looking to establish a legitimate and successful presence in the region.

Type of Business Licenses in Dubai

There are several types of business licenses in Dubai available for starting your business. Choosing the right business license in Dubai is a crucial step for a successful business startup. Here are the main types of licenses you can consider:

1. Commercial Trading Business License in Dubai:

One of the main business licenses in Dubai is the Commercial Trade License, essential for companies involved in buying and selling goods and products. With this license, businesses can operate both domestically and internationally, but must be based in Dubai or the United Arab Emirates. The scope of the license varies depending on the type of company. For Mainland companies, the license is valid throughout the UAE, while for Free Zone companies, it is only valid within the Special Economic Zone.

Industries such as real estate and logistics often require a Commercial License, as do companies dealing in motorcycles, cars, and other trading activities. Business activities that require a commercial license include:

Logistics
Import and export
Tourism and travel
Intermediary activities
Product-oriented sales (electronics, construction, retail, etc.)
Real estate
Rental business

It’s important that business activities are conducted with a legal business license in Dubai to avoid sanctions and hefty fines. Companies with a trading license enjoy several advantages, such as the ability to trade in any region of the UAE, deal in multiple products, conduct business abroad, and hire foreign employees. However, the trading license is always limited to a specific product category. We are happy to help you choose the right business license in Dubai for your business needs.

2. Industrial License in Dubai – Business License in Dubai:

If you want to set up a company in Dubai in the industrial manufacturing sector, you need an industrial license. This license allows the holder to manufacture semi-finished or fully finished products, encompassing activities such as production, collection, and packaging. Businesses that require an industrial license typically have the following characteristics:

All business activities involve the production, manufacture, or generation of physical products.
Business activities require the import or export of materials or goods used in a manufacturing process.
Packaging and producing a series of new products from existing raw materials.
Combining two or more existing products into a single product.

A prerequisite for obtaining an industrial license is possessing at least one physical warehouse, which must be located in Dubai or the UAE. The industrial license is issued by the Department of Economic Development (DED). Additionally, various permits from Dubai Municipality or other authorities may be necessary. These must be obtained in advance by the founder and may include:

Permits from the Chamber of Commerce and Industry
Registration with the Industrial Registry
Approval from the Ministry of Health

We can assist you in navigating the process of obtaining the necessary business licenses in Dubai to ensure your industrial manufacturing company is set up correctly and legally.

3. The Tourism Business License in Dubai:

Besides trade and production, the tourism industry is particularly strong in Dubai. Dubai is an attractive destination for people from all walks of life, with millions of tourists enjoying its breathtaking beaches and unique flair every year. This makes starting a company in the tourism sector extremely lucrative. To operate hotels, restaurants, travel agencies, or car rental companies, a Tourism License is required. Additionally, the company must be registered with the DED and the Department of Tourism.

There are various types of Tourism Business Licenses in Dubai, each catering to specific aspects of the industry:

Inbound Tour Operator License: This license is for businesses that deal with tourists within the city, offering local tours and experiences.
Outbound Tour Operator License: For companies organizing excursions outside of Dubai.
Travel Agent License: This license allows businesses to offer tours, flights, car rentals, and hotel bookings to customers.
Tour Guide License: Required for individuals who wish to work as tour guides in Dubai. Obtaining this license necessitates extensive knowledge of the city, and candidates must successfully complete the Top Guide program. The license is valid for one year and must be renewed annually. Operating without this license can result in severe penalties.

Starting a business in the tourism sector involves understanding and complying with specific regulations and obtaining the necessary business licenses in Dubai. We can assist you in navigating these requirements to ensure your tourism business operates smoothly and legally.

4. E-Commerce Business License in Dubai:

In today’s market, e-commerce has become a major hub for the international movement of goods, shifting the focus from traditional stationary trade. The Dubai government has adapted to this trend by introducing a special license for internet retailers, which has been available since 2017.

E-commerce Business license in Dubai allows sole proprietors and individuals to sell services and products online through websites and social media platforms. Notably, a physical office space is not required to obtain this license. However, it is important to note that the e-commerce license can only be registered to a single holder. To apply for this license, you must first open a merchant account with the Dubai Department of Economic Development (DED).

5. Professional License:

If you aim to establish a service-oriented business in Dubai, you will need a Professional License. This license is designed for businesses based on specialized services or professional skills, and is often referred to as a trade license in broader terms.

A Professional License caters to individuals offering services in fields such as arts, crafts, or other professional areas requiring specific expertise. One significant advantage of holding a Professional License is the ownership structure. As a sole proprietor, you can retain 100% ownership of your business, eliminating the need to partner with a local investor under the 49/51 rule.

To obtain a Professional License, you must provide proof of relevant qualifications. In some cases, additional documentation, such as a training authorization, may also be required.

6. Freelance Permit – the business license for freelancers:

In recent years, freelancing has surged in popularity as a flexible alternative to traditional employment. This mode of self-employment is increasingly recognised in Dubai and the wider UAE. Previously not acknowledged, freelancing is now an accepted form of entrepreneurship in the region.

To work as a freelancer in Dubai, you need both a Dubai visa and a work permit. Freelance permits are available in various free zones across the UAE and Dubai, including:

Dubai Media City
Dubai Studio City
Dubai Production City
Dubai Knowledge Park
Dubai Design District

The cost and conditions for a freelance visa can vary, but generally, a freelance permit is valid for three years. Freelancing in Dubai encompasses a broad range of activities and business fields, such as:

Software Development and Database Management
Music, Journalism, and Photography
Styling and Coaching

Each of these fields requires a freelance permit to legally operate in Dubai.

7. Technical Service License – Business License in Dubai:

For companies looking to provide technical services in Dubai, a Technical Service License is required, as a standard Professional License is not sufficient. This specialized license is essential for businesses involved in technical craftsmanship and installation work.

Common business activities that fall under a Technical Service License include:

Air Conditioning, Ventilation, and Air Filtration: Installation and maintenance of HVAC systems.
Carpentry and Flooring: Woodwork, installation of flooring materials, and related services.
Concrete Works: Services related to concrete construction and repair.
Cleaning Services for Businesses: Industrial and commercial cleaning solutions.
Electrical Installations and Equipment: Wiring, electrical systems, and equipment installation.
Installation of False Ceilings and Light Partition Walls: Setting up interior partitions and ceiling systems.
Floor and Wall Tiling Works: Tiling for floors and walls in various settings.
Insulation Works (Contracting): Insulation for buildings and structures.
Plastering and Cladding Works: Application of plaster and cladding materials.
Plumbing and Sanitary Works: Installation and maintenance of plumbing and sanitation systems.
Installation of Solar Energy Systems: Setup of solar panels and related energy systems.
Other Technical Services: Any additional technical work that requires specialized skills.

This license ensures compliance with local regulations and standards for technical services, allowing businesses to operate legally and effectively in Dubai.

8. The general trading license: Business License in Dubai

The Commercial Trading License in Dubai is designed for businesses focusing on a single product category within an industry. However, if you’re seeking greater flexibility and the ability to trade across various product categories, the General Trading License is an excellent option.

Key Features of the General Trading License:

Wide Range of Products: Unlike the standard trading license, which is limited to one product category, the General Trading License allows you to trade in multiple products from various industries. This flexibility is advantageous for expanding your business into new markets.
Coverage: This license permits trading both within the UAE and internationally. However, certain goods that require special permits, such as weapons and medical products, are excluded.
Local and International Trade: With a General Trading License on the mainland, you can actively participate in the local UAE market as well as engage in international trade.
Unlimited Visas: There are no restrictions on the number of employee visas you can obtain. This means you can hire as many staff members as necessary to support your business operations.
Tax Benefits: Entrepreneurs benefit from the low VAT rate of 5 percent. For those based in the Meydan Free Zone, additional advantages include 0 percent VAT and 0 percent income tax, enhancing the financial benefits of operating in this zone.
Banking Benefits: Obtaining a General Trading License simplifies the process of opening a bank account and managing transactions. You’ll have access to efficient processing of transactions in multiple currencies.

This business license in Dubai provides substantial benefits for businesses seeking to operate with a broad product range and enjoy financial and operational advantages in Dubai.

9. Crypto Trading License:

Cryptocurrencies are gaining traction globally, and the need for effective regulation is becoming more pressing. The UAE stands out as a prime location for cryptocurrency ventures, offering a supportive environment for these innovative projects.

Key Points on Obtaining a Crypto License in the UAE:

Crypto License Requirements: To operate legally with cryptocurrencies in the UAE, you must secure a crypto license. This license enables you to provide cryptocurrency-related services, ensuring compliance with local regulations.
DMCC Free Zone: The Dubai Multi Commodities Centre (DMCC) Free Zone is particularly well-suited for cryptocurrency businesses. The DMCC offers a robust framework for cryptocurrency operations, including trading and “cold storage” solutions.
Capital and Business Plan: To obtain a crypto license from the DMCC, you will need to meet a minimum registered capital requirement of EUR 15,000. Additionally, a comprehensive business plan detailing your cryptocurrency operations is necessary.
Residency Requirements: Currently, there are no residency requirements for obtaining a crypto license. This allows for greater flexibility in setting up and running cryptocurrency businesses in the UAE.
Tax Benefits: One of the most attractive features of operating cryptocurrency projects in the UAE is the absence of income taxes. This tax-friendly environment enhances the appeal of the UAE as a destination for crypto entrepreneurs.

In summary, the UAE offers a conducive regulatory and financial environment for cryptocurrency ventures, particularly through the DMCC Free Zone. With a crypto license, businesses can engage in various crypto activities while benefiting from favorable tax conditions and a supportive legal framework.

10. Influencer License

Dubai has adapted to contemporary trends in digital entrepreneurship with the introduction of the E-Trader license, which includes a specific influencer license tailored for social media activities. This license is designed for individuals and companies engaged in online business and social media marketing.

Key Points about the Influencer License in Dubai:

Purpose and Scope: The influencer license allows for the sale of products and services through online platforms and social media channels, such as Instagram. This license is crucial for maintaining trust and authenticity in online transactions.
Eligibility: Both private individuals and companies can apply for the influencer license. It aims to curb the sale of counterfeit goods and enhance the credibility of online sellers.
Additional Permissions: For businesses seeking to sell products outside of Dubai, further approval from the Department of Economic Development (DED) is required. This ensures compliance with broader regulatory standards.
Benefits: Holding an influencer license signals trustworthiness to customers and helps in differentiating legitimate businesses from counterfeit sellers, contributing to a more secure online marketplace.

Overall, the E-Trader license and its influencer variant provide a structured framework for digital and social media-based commerce in Dubai, promoting a secure and credible online trading environment.

Cost of Business License in Dubai

Cost of Business License in Dubai varies depending on the location and type of business you plan to establish. Here’s a general breakdown:

Dubai Mainland: The cost of a business license in Dubai Mainland typically ranges from AED 6,100 to AED 28,000. This range covers various types of licenses and business activities permitted within the mainland.
Dubai Free Zone: For businesses in the Free Zones, the license cost ranges from AED 6,000 to AED 31,000. Free Zones often offer different packages depending on the size and scope of the business.

It’s important to note that these figures represent the cost of the business license alone and do not include additional expenses such as visas, office space, or other setup costs.

For precise calculations and a comprehensive understanding of all potential expenses, consulting with an experienced business setup advisor like Alfa Zone is recommended. They can provide tailored guidance and ensure that you have a clear picture of the total investment required for your business.

Prerequisites for Obtaining a Business License in Dubai

Before applying for a business license in Dubai, there are several essential prerequisites you need to fulfill:

Sponsor: Non-GCC nationals require a local sponsor to obtain a business license. The sponsor can be a UAE national or a UAE-based company. The sponsor will typically provide financial support and may have some level of control over the business.
Trade Name: You must choose a unique trade name for your business. This name must not be identical to any existing registered names in Dubai.
Business Address: You need a registered business address in Dubai. This could be your home address or a rented office space, but it must be a legitimate location for your business operations.
Memorandum of Association (MOA) and Articles of Association (AOA): These documents are required to outline your business’s structure and management. They detail the roles and responsibilities within the company.
Photocopy of Passport: A clear photocopy of your passport is necessary for submission to the Department of Economic Development (DED).
Copy of Visa: Non-GCC nationals must provide a copy of their visa as part of the application process.
Lease Agreement: If you are leasing office space, a copy of the lease agreement must be submitted to the DED.
Trade License Application Form: Complete and submit the trade license application form to the DED.
Application Fee: An application fee is required when you submit your form. This fee varies depending on the type of business license and location.

Once you have gathered all necessary documents and completed the prerequisites, you can submit your application to the DED. They will review your application and provide approval or rejection within a few weeks. If approved, you will receive your business license, allowing you to legally operate your business in Dubai.

Read Article: 10 Business Opportunities in Dubai UAE

Steps to get a Business License in Dubai, UAE

Navigating the process of obtaining a business license in Dubai involves several key steps. Here’s a streamlined guide to help you through the process:

Step 1: Partner with Alfa Zone

Start by partnering with Alfa Zone, your trusted business setup consultant. Alfa Zone will handle all aspects of your business license application and company registration. They will guide you through the documentation required by various governing authorities and secure necessary approvals on your behalf.

Step 2: Choose Your Business Activities

Define the activities your business will undertake. Your business license will outline these activities, and it’s crucial to list all relevant activities on your application. Failure to do so can result in penalties. Alfa Zone will ensure your license application accurately reflects your business activities and complies with UAE regulations.

Step 3: Select the Legal Form

Choose the legal structure for your business. The options available in the UAE include:

Partnership
Limited Partnership
Limited Liability Company (LLC)
Public Joint Stock Company
Private Joint Stock Company
Branch of a Foreign Company

Selecting the appropriate legal form is essential for obtaining your business license in Dubai.

Step 4: Choose a Trading Name

Alfa Zone will assist in selecting and registering your company name with the UAE Registry Office. Ensure your business name complies with UAE naming regulations. Avoid using offensive or profane language, and refrain from including references to Allah or Islam. The name must be your full name if you choose to include it.

Step 5: Application for Initial Approval

Apply for initial approval from the Department of Economic Development (DED). This approval signifies that the UAE government has no objections to your business. Note that this is not a trading authorization but a crucial step in the licensing process. Foreign investors and entrepreneurs must also obtain approval from the General Directorate of Residency and Foreigners Affairs (GDRFA) before receiving initial approval.

Step 6: Find a Business Location

Identify a suitable business location in the UAE. The location should meet your business needs and budget. For your business license application, include a tenancy contract or rental agreement for your chosen location.

Step 7: Obtain Government Department Approvals

Depending on your business activities, additional approvals may be required from local or federal government authorities. This includes registering with the UAE Chamber of Commerce relevant to your emirate. Ensure you secure all necessary approvals to comply with industry-specific regulations.

By following these steps and partnering with Alfa Zone, you can efficiently navigate the process of obtaining a business license in Dubai and set the foundation for your business’s success.