A trade license is more of a necessity than a formality in Dubai. It not only legitimizes your business but also dictates the scope of your business activity. Therefore, it is necessary to exercise great care when applying for it.

The various Free Zones and the Department of Economic Development (DED) are the principal licensing authorities for businesses in Dubai. They mainly issue three types of licenses:
Professional License – Dedicated license for services like consulting, teaching, training
Commercial or Trade License – Mandatory license for trade-related business
Industrial License – For factory or processing-related business

The UAE government has also committed certain ministries and authorities to grant approval for specific businesses like:

  • the Central Bank of UAE for financial establishments
  • the Ministry of Economy and Commerce for insurance companies
  • the Ministry of Finance and Industry for production and processing units
  • the Ministry of Health for pharmaceutical businesses
  • the Chamber of Commerce and Industry for commerce-related companies

We have listed the seven steps to help you obtain a trade licence for your business in Dubai:

Step 1: Categorize your business
After you’ve decided on the business you want to establish in the UAE, you must identify the appropriate category it falls under, from the category listing provided by the Free Zone or the DED. If you are unable to pinpoint the suitable category, Worldwide Formations can assist you in selecting the relevant one for you.

Step 2: Choose a suitable legal structure
Your company’s legal structure is just as important as the trade name of your company. Several free zones in Dubai allow you to operate as:

  • a free zone limited liability company/ free zone company
  • a free zone establishment
  • a branch of a foreign company

The legal structure mainly depends on the number of shareholders you have in your business, and the jurisdiction you choose to operate your business in. Apart from this, Dubai also lets you form your business as a subsidiary or a partnership. However, it is imperative that you seek expert advice before you determine the legal structure for your business.

Step 3: Choose a trade name
Choose a business trade name that defines your business activity and adheres to the government guidelines. Before finalizing on your choice of name, you must inquire with the respective free zone authority or DED whether or not the proposed trade name has already been registered by any other businesses. There are certain rules that you need to abide by before selecting a trade name, such as:

  • The name should have the legal entity attached to it like FZE or LLC.
  • It should not be against or hurt the sentiments of the country, people or any religion.
  • The name should not resemble the name of any other registered company.
  • It should be in sync with the nature of the business activity.

Step 4: Decide on your investment
Investment varies from business to business. There are some businesses that require major investment and injection of capital while some others don’t require major investments. So, investment largely depends on the type of business you have opted.

Step 5: Lease or purchase an office space
Office space is one of the basic requirements of any business. While choosing your office space, you have to make sure that it suits your business requirements and can conveniently accommodate your employees. Dubai free zones offer many types of offices ranging from flexi-desk to multi-floor executive office spaces. It is recommended that check you with your free zone authority and opt for one that matches your requirements.

Step 6: Get initial approval from the authority
Getting the initial approval from the free zone authority is a fundamental step for obtaining a trade license. Check the list of documents given below and ensure that you have everything in place before presenting it to the authority for the initial approval:

  1. Duly-filled application form
  2. The master plan of your business activity
  3. Copy of present trade license, in case you run a local company (optional)
  4. Copy of passport (of every shareholder/partner associated with your business legally)
  5. Copy of signature (of every shareholder/partner associated with your business legally)
  6. Certificate of reference from the bank or 2 years financial statement
  7. NOC from your sponsor
  8. Unit title deed
  9. Letter of Intent
  10. Original and notarized copy of Registry Identification Form (for the Director)

Step 7: Business registration and obtaining a license
The initial approval is followed by the payment of fees for registration and license. Here is the list of documents to be submitted for registration:

  • Application form for registration duly filled
  • Notarised and attested Board Resolution for the appointment of Director or Manager
  • Notarised and attested Power of Attorney endowed to the Director or Manager
  • Notarised and attested Memorandum and Articles of Association
  • Notarised and attested proof of the signature of the Director or manager
  • Passport-size photograph of the Director or the Manager
  • Details of Share Capital

Following registration, the authority prepares the lease agreements and issues the trade license.

Following these seven steps can help you obtain your trade license and establish your business setup in Dubai. But it is always best to approach a registered company formations agent to eliminate any hassles that might arise. With more than 15 years of experience in company formations, Worldwide Formation is a registered company formations agent in Dubai. We can step in to help you ease your way in obtaining your business license.

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