Business License in Dubai - A GuideNovember 24, 2022
All companies are required to have a Business License in Dubai to continue trade and showcase their lawfulness. Even though getting this license can be expensive, the post-acquisition phase brings numerous advantages and incentives.
There are many types of company licenses in Dubai depending on the activities you are planning to conduct in the UAE. Therefore each license is limited to only ten business activities except a general trading license that allows the businesses to trade in different types of commercial activities.
What is a Business License in Dubai?
Company License in Dubai provides the business with a legitimate identity. It clarifies the legal status of any business or trade company operating in a particular region. Furthermore, it also ensures that the firm takes complete accountability for its operations. Lastly, it manages, protects, and classifies legal cases for the company.
Difference between A Trade License & Business License in Dubai
Understanding the true meaning of these terminologies can be difficult since both are the same. Some people say a Trade License in Dubai and some people say a business license in Dubai.
Generally, investors get a certificate after forming a company in Dubai which is called a business license or trade license.
Why do you need a Business License in Dubai?
As stated above, a Business License in Dubai will make you or your company eligible to operate in the city as a certified entity. The license not only administers the company's commercial operations but also looks over consumer safety & well-being. Above all, it also provides the business with legal recognition from the authorities.
Types of Business License in Dubai
Business Licensing is one of the first steps in establishing a company. In Dubai, the authorities have approved four different types of business licenses, just like the UAE. These are:
- Commercial License
- Professional License
- Industrial License
- Tourism License
However, the jurisdiction and agencies for all these licenses differ. We have explained more about these in detail below.
Commercial License in Dubai
Companies that have a Commercial Trade License in Dubai are permitted to sell or buy goods. Businesses with this license are eligible to export/import goods, logistics operations, brokerage agencies, product trading, services on rent, etc. Additionally, having this business license is mandatory for any entity, whether they plan on trading in or outside Dubai.
List of Commercial Licenses in Dubai
With this license, businesses can start trading the following:
- Gold & Precious Metals
- Automobiles & their Spare Parts
- Used Furniture
- Oil & Gas
- Publications & Media Material
- Safety Equipment, etc.
- Any many more trading and commercial sectors
Benefits of Commercial Licenses in Dubai
Some of the top advantages of having a Commercial License include:
- Under one Commercial Company License in Dubai, a firm can perform ten related activities.
- Diverse Company Type Options Available
- Safer Business functioning through DED and Company’s Register
- Helpful in opening a Corporate Account in Banks
- Easy Fiscal Reporting; no taxation or corporate tax
- Renewal is quite Affordable as well
Businesses that employ an individual's theoretical knowledge to serve the consumer group require a Professional License. These are provided to auditors, consultants, and professionals with similar backgrounds. Entities with more than one male owner will be categorized as 'Civil Works Corporation' after receiving their license. Furthermore, complete ownership will be provided to the expatriate with a professional degree.
List of Professional Licenses
In Dubai, individual consultancy services can receive a Professional License in the following sectors:
- IT & IT Infrastructure
- Real Estate Brokerage
- Commercial Brokerage
- Any many more consultancies and professional services
Businesses that offer services for Tour & Travel can get a Tourism License in Dubai. Considering that this city has emerged as a popular tourist destination for UAE, this license type has become a standard option among businesses. Firms offering hospitality, recreation, accommodation, tour management, etc., apply for this license.
Activities of Tourism License
Outbound Tour Operator
This license grants permission to the business to plan and execute outbound trips. Additionally, it also assists the companies to function inside and outside the region smoothly. Operators in this category are responsible for helping tourists traveling from UAE to other nations.
Inbound Tour Operator
Inbound is the exact opposite of Outbound Tour Operator. Licensees under this classification have to manage tours to Dubai from other countries. With this permit, the operators can also organize exhibits or conferences at a global level.
Individuals who want to open their own Tourism Agency and issuing tickets should apply for a Travel Agent License. After receiving the license, the holders can perform air ticketing services or offer Visa assistance to interested tourists.
Types of Business Licenses in UAE Jurisdictions
Business License in UAE Mainland
An individual or corporate entity wants to do business in UAE local market then they must start a business in mainland area in any emirates of UAE. business license will be issued from the Department of Economic Development of each Emirate and these are called Mainland Licenses.
Business License in UAE Freezone
Freezones are the demographic locations that are allowed to perform preset business activities in Dubai or UAE. If a company wishes to operate in these regions, then they require a UAE Freezone Business License. Also, one must remember these licenses are only provided to specific business activities.
Business License in UAE offshore
Offshore Company is a business term used to distinguish any corporate firm that has a business outside of its registered jurisdiction. All offshore licenses in UAE are issued from approved license authorities like JAFZA, RAKEZ, and AFZA. The intention of opening an offshore company in Dubai is to save a tax, to hold assets of the company, and to do investment into real estate worldwide.
Cost of Business License in Dubai
A business license in Dubai costs between AED 5, 750 to AED 30, 000 for instance the cost of a business in Dubai mainland is around AED 6, 000 to AED 27, 000 and the cost of the license in Dubai Freezone ranges from AED 5, 750 to AED 30, 000. Note that this is the cost of a business license only in general and does not include visas, and other expenses based on your business activities. To know exactly how much you will spend on your business license you better contact an experienced business setup consultant like Avyanco to assist you.
Benefits of a Business License in Dubai
Showcasing the Feature
Having a licensed business allows you to capitalize on the fact that you own an authorized and accredited firm. The reliability will not only attract more customers but also drive higher stakeholder and investor interest. Thus, this will be a significant contribution to your business's success.
Company License in Dubai ensures that the individuals have to file tax returns separately. While this can be tiresome, it will help you reduce significant business expenses that are hard to miss when filing personal taxes. Reporting losses and income will also become easier.
Based on the licensing and formation of the business, Licensed Companies safeguards themselves against all liabilities. Different license types offer different stages of protection. In case the industry faces certain damages, your personal finances will not face any repercussions.
How Can You Get a Business License in Dubai?
Trade License in Dubai are issued to businesses that have complied with the following criteria:
- An investor should choose the activity and name to start the company registration in Dubai. Also, if it is a professional license then they have to appoint UAE nationals as their service agent of the company but the local agent will not have any share in the company, however in commercial and industrial licenses local sponsor presence is not require.
- Prepare a Memorandum of Association or MOA or LSA with the local sponsor if the professional type of license
- Submit your Application Form at the DED to receive approval for provided business activity and name. Attach the below-mentioned Legal Documents before sending the application to the Commercial Registration Department.
- You also need proper physical Office space to run your business. Therefore, complete your Tenancy Agreement before applying for the license.
Documents Required to Get a Business License
A business should apply to get a Company License in Dubai with the following documents:
- Passport copy, visa copy of the investor and manager
- Complete application
- Tenancy Agreement
- Three Name choices for the company name reservation
- Degree certificate attested (in some cases)
- Experience certificate (in some cases)
Business License Validity in Dubai
The maximum validity of a business license in Dubai is 2 years however most of the businesses in UAE prefer to apply for a 1-year company license that they keep on renewing every year before its expiration date.
Any delay in business license renewal comes with fines and penalties for instance AED 5000 fines for operating without a valid license and AED 250 for not renewing your license. However, there is 30 days grace period for renewing a company license in Dubai and Avyanco can help you to apply for a new license or renew the existing license before it expires.
How to Renew Business License in Dubai?
The process of renewing a Business License is quite simple. To start with, you must recheck the License Validity on the original documents. Additionally, you can also check its status online. Before applying for renewal, follow this quick checklist:
- Keep all your Documents Arranged
- Fill the Renewal Application Form
- Make Payment for the Renewal Fee
The Dubai government provides a 30-day grace period to companies who have missed their renewal deadline. However, renewal applications submitted after this duration will make the business liable to pay a fine. Depending on the case, the fine starts from AED 250 and can go over a thousand Dirhams.
How does Avyanco Support getting a Business License?
Filing an application for a Business License in Dubai is relatively simple if you have the right assistance. If you want to avoid beginner mistakes, then getting expert advice can be helpful.
Avyanco is your one-stop solution to receive inclusive Licensing support. Our team of professionals endeavors to give you the best services and inclusive solutions to common queries. We will help you fill an error-free application and carefully select the right license type for your business.