Obtaining a business license is a mandatory requirement for any company formation in Dubai. A business license validates the legal status of the business entity and permits legal conduct of activities.
As the commercial capital of the Middle East, the industry, trade and logistics sectors of the UAE have grown considerably in the past two decades. The city of Dubai contributes significantly to the economy of the UAE. Therefore, it is always a lucrative prospect to set up a business in Dubai.
Several factors affect the choice of the business license, ranging from the type of activity to the legal structure of the business entity.
The following sections detail the different types of business licenses offered in Dubai and which business activities are allowed by them.
Overview of Dubai Business license
For company formation in Dubai, business license secures the identity of the respective business firm and warrants accountability for its operations in the region. The business license also certifies the firm’s legal status, organises, safeguards and categorises its legal status.
In Dubai, the Department of Economic Development (DED) is the responsible body for issuing the business license and regulating all related procedures. It is important to note that DED license companies operate only within the UAE mainland. Freezone companies are licensed by the respective freezone authority.
Commercial operations in Dubai are grouped into five categories:
Professional licenses are provided to corporations or individuals who provide services that involve the use of intellectual abilities. Firms owned by more than one male are classified as Civil Works Corporations. IT service suppliers, craftsmen, mechanics and others may also be required to provide UAE Technical License.
Business activities that are permitted by a professional license are:
- Insurance consultancy
- IT and IT infrastructure consultancy
- Environmental consultancy
- Management consultancy
- Tax consultancy
- Marketing consultancy
Professional license holders enjoy the following advantages:
- Fixed annual fees
- Transparency in dealing with clients
- Possibility to apply for employee’s visa
A commercial license is given to businesses engaged in the purchase and sale of goods either within or outside the UAE. A general trade license is given to businesses intending to trade in the local sector. Import/Export authorisation might be required from the concerned bodies for import/export activities.
Operations allowed by the commercial license are:
- Publication and media materials trading
- Oil and gas trading
- Spare parts trading
- Gold and precious metals trading
- Automobile trading
- Safety equipment trading
Besides protecting and regulating the operations of business entities, a commercial license provides the following advantages:
- Possibility for including up to 10 commercial activities in one license
- Several options for the company’s legal structure
- Residence visa for employee and management staff
- Assistance with opening a corporate bank account
- Cost-effective renewals
Industrial license permits manufacturing activities in either Dubai’s mainland or its freezones. Activities include:
- Textile manufacturing
- Food processing and manufacturing
- Cosmetics and speciality chemicals manufacturing
The Department of Tourism and Commerce Marketing permits the operations of tourism and travel agencies. A tourism licence allows for three main activities:
- Outbound tour operators
- Inbound tour operators
- Travel agents
Freelance license is the latest type of permit issued by many freezones in Dubai and other emirates like Dubai Media City, Dubai Knowledge Park, Dubai Internet City, Twofour54 and others. The new license allows skilled individuals in the media, art, telecommunication and entertainment sectors to provide consultancy services. A freelance permit is issued to individuals in the following professions:
- Media Specialists
- Content and copywriters
- Audio/sound engineers
For more information on the freelance permit in the UAE see our blog entry
Requirements of Dubai Business License
Applying for a mainland business license at DED entails the following general requirements:
- Presence of one of the business partners during the application process
- Passport copies for all business partners including directors and managers
- A No Objection Certificate (NOC) from the local sponsor for expatriates and foreign partners
- Registered trade name
- Clear business plan and organisation structure outline
- Initial approval from the DED and external approvals from relevant authorities concerned with the business activities
- Office space tenancy contract and Ijari number