4 Types of Licenses you must know to Setup a Business in Dubai

A business license is not only a formality but also a requirement in Dubai, UAE. The license determines the nature of your business activity and legitimizes your company. While it is somewhat expensive, getting the license has its benefits. Obtaining a business license in the UAE involves getting approvals from the government and the economic department. It would help if you also got all your company formation documents cleared from different UAE agencies within a short period. For first-time investors, this procedure can be confusing and expensive.

Here’s all you need to know about the business licenses in the UAE.

Types of Trade Licenses in Dubai

The Department of Economic Development (DED) is the regulatory authority that provides a business license to Dubai businesses. The DED has categorized every business under various licenses, providing them prominence as per their business activity. Business activities are classified into five major categories. They are –

Commercial License in Dubai
  1. Commercial License
  2. Industrial License
  3. Professional License
  4. Tourism License
  5. Freelance License

We will take you through all the mentioned licenses one-by-one.

1. Commercial License

Commercial License in Dubai is for companies engaged in buying and selling goods. For trading within the UAE or even outside the country, a commercial business trade license is required. Some of the business activities under a Dubai commercial trade license are imports and exports, rental services, trading of products, logistics firms, brokerage firms, real-estate etc.

The advantages of obtaining a commercial license are –

  • Up to ten relevant business activities are permitted on a single commercial license
  • Several types of companies can be opened via commercial trade license
  • A commercial license permits the opening of corporate bank accounts
  • Business activities through commercial license are free from income tax, corporate tax, and several other types of taxes and duties
  • The renewal of a commercial license is simple and affordable
  • Business owners can apply for employment visa, family residence visa and several other types of visas after approval of commercial license in Dubai

The activities allowed under this license are –

  • Import/Export of goods
  • Travel and Tourism
  • Shops and General Stores
  • Logistics
  • Real Estate Services
  • Auto Vehicle Rental
  • Brokerage Service

2. Industrial License

Industrial Trade License in Dubai and across the Emirates is issued to businesses involved in manufacturing and industrial activities. It would help if you had a physical office inside the country to get this license. Few notable activities are manufacturing any products, the casing of products, furnishing products, and packaging products.

Here are some requirements if you want to get an industrial license –

  • A physical office and warehouse is compulsory for an industrial license
  • The minimum capital required for an industrial license is AED 250,000
  • There should be at least ten workers in your company
  • It is necessary to get the license from the area where you want to establish your industry
  • Study demand factory visit
  • Machines are necessary with a minimum of 5 horsepower

The business activities under the license are –

  • Textile manufacturing
  • Paper manufacturing
  • Bread manufacturing and related companies in the food industry
  • Engines manufacturing
  • Manufacturing of petroleum products
  • Metalcasting industries

3. Professional License

Professional Trade License in the UAE is a compulsion for service-oriented companies. Full ownership is offered under a professional trade license but requires a local service agent to complete the process. The professional license can undertake business activities such as management consultancies, law firms, marketing & designing, auditing & accounting companies, etc.

The advantages of a professional license are –

  • 100% foreign ownership
  • Cost-effective
  • Wide range of activities to choose
  • Flexible market
  • Wide range of clientele
  • No additional corporate or income tax on profit
  • Wide range of activities to choose from

The business activities under the license are –

  • Medical services
  • Beauty salons
  • Consultancy
  • Artisans
  • Printing and Publishing
  • Security Services
  • Document Clearing
  • Computer Graphic Design

4. Tourism License

Dubai is positioned as the foremost tourism destination visited by tons of individuals every year. Aiming to regulate tourism sector in the UAE – the DED the DTCM initiated tourism license in the UAE. A tourism License in the UAE needs to be obtained by businesses such as travel agents, tour operators, the hospitality industry, etc.

A tourism license is provided to owners of facilities that specialize in tourist activities, such as:

  • Hotels
  • Travel agencies
  • Restaurants
  • Cruise boat rental
  • Tourist camps
  • Floating restaurants

5. Freelance License

Freelancing has already increased popularity in the UAE. The Free zones of Dubai, Ras Al Khaimah, Abu Dhabi, and Fujairah offer Freelance Permits for individuals.

These permits focus on specialized individuals in the media, art, technology, and entertainment industry to provide their facilities on a consultancy basis, apart from their full-time jobs.

The Dubai Media City, Dubai Internet City, Dubai Knowledge Park, Fujairah Creative Zone, Ras Al Khaimah Free Zone Authority, Twofou54, etc., offer Freelance license to individuals.

Freelancer Licenses are issued to the following media and creative professionals.

  • Actor
  • Animator
  • Audio/Sound Engineer
  • Cameraman
  • Content provider
  • Copywriter
  • Media Specialist
  • And many more

When starting a business in Dubai, entrepreneurs are faced with several necessary decisions. The first one is a business activity that you want to trade under. You must know that Free Zones Company Licenses are popular due to the ease of business formation, a wide range of business activities, and a host of business advantages for the investors.

If you are interested in incorporating your business, then business setup consultants Commitbiz can assist you with it.

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