There are many reasons why the UAE remains one of the world’s most popular business destinations. Its great global location, stable political and economic environment, and low barriers to entry continue to bring thousands of entrepreneurs to our shores every year.
They come from far and wide to join our largely expatriate population, starting businesses in a wide range of industries from consultancy to healthcare, technology, and trading. But each have one thing in common: To work in the UAE, they require a UAE trade license.
And every year, Worldwide Formations helps many obtain this license and get up and running in the UAE. If you’re looking to do the same, here’s how we can help.
What are the UAE trade license categories?
There are three common license types on offer in the UAE: commercial, professional, and industrial.
In short, commercial licenses cover all manner of trading activities; professional licenses tend to be for consulting and services business; and industrial licenses are for those wishing to manufacture goods from raw materials.
There are other license types available within these categories, such as the ecommerce license, and the general trading license. Ecommerce licenses are for businesses that wish to operate solely online while general trading licenses are for those wishing to trade in multiple unconnected goods.
How to get your UAE trade license
There are several steps to take before applying for your business license in the UAE. No step is particularly complex but the entire process does require some knowledge of UAE business. For this reason, it is always a good idea to undertake your application with the help of a company formation expert such as Worldwide Formations.
Step 1: Choose your business activity
Every business in the UAE must list a business activity, or activities, on its business license. It’s important that you list every activity that applies to your business when making your application as failure to do so can lead to fines or even license revocation.
There are over 2,000 to choose from so no matter your industry or the type of business you undertake, you are sure to find an activity that fits the bill. The type of activity you intend to undertake will decide the type of license and setup that you require.
Step 2: Choosing your company name
A step of the business incorporation process that takes on more importance here in the UAE is the choosing of your company name. That’s because as well as the need for a name that’s catchy and captures the essence of your business, you’ll also need to stick to the UAE’s clearly defined naming conventions.
In short, UAE company names must not contain any blasphemous or offensive language, any references to well-known institutions or any abbreviations of your name – though your full name is acceptable.
Your name should also have a legal entity attached to it such as FZE or LLC. It must also relate to your business activity, not resemble the name of any other company and be available to register.
Step 3: Free zone or mainland?
There are two overarching business types in the UAE. These are free zone and mainland. Mainland companies can be registered anywhere in the country. They are permitted to trade freely throughout the UAE and, in many cases, can be owned 100% by foreign entrepreneurs.
Free zone companies can only operate from within their free zone. They can always be owned 100% by foreign entrepreneurs but must use a local agent to trade with the UAE market. However, free zone companies are afforded 100% customs tax exemption, can operate without currency restrictions, and are permitted to repatriate 100% of profits and capital.
Step 3: Applying for your license
You can now make your UAE trade license application. There is a slightly different process here depending on whether you are setting up in a free zone or in the mainland.
If you’re setting up in the mainland, you can make your license application directly to the Department of Economic Development or equivalent. If you’ve chosen a mainland setup, you should apply directly to the managing authority of your chosen free zone.
In both cases, it is much quicker and easier to permit a company setup agent to handle this process for you. As part of your application, you are usually required to submit several documents along with your application form, including:
- A copy of your passport – and that of any other shareholders
- Your business plan
- A copy of your signature
- A No Objection Certificate from your current employer (if applicable)
Step 4: Applying for your visa
At the stage, you should also apply for your UAE trade license visas. This process involves four stages including a medical fitness test and biometric capturing. Your UAE trade license visas are usually issued in around a week.
As the holder of a UAE business license, you can also sponsor others such as children, a spouse or domestic staff for their visas too, providing you meet the eligibility criteria.
Understanding UAE trade license fees
It is not always easy to estimate the UAE trade license cost, as it will depend on many factors. If you are starting your business alone in a free zone, with a professional license, for example, you will likely pay less than if starting an industrial business in the UAE mainland.
As a guide, free zone licenses tend to start in the region of AED 10,000 to AED 15,000. Mainland licenses start around the top end of that bracket, and can range beyond AED 40,000.
Get your UAE trade license today with Worldwide Formations
By following the steps above, it is possible to obtain your trade license in the UAE with minimal fuss.
However, it is always advisable to undertake the steps with the assistance of a registered company formation agent to eliminate any potential hassles that might arise.
With more than 15 years of experience in company incorporation, Worldwide Formations can help you get your business up and running within a week or two. We’ll manage your license and visa application and correspond with all relevant authorities for you. All you need to do is wait for the green light to start trading.