Setting up a business in Dubai comes with a notable advantage – 0% corporate tax on businesses under specific revenue. This allows companies to maximise their profits and reinvest in their growth. A crucial step in establishing your business is obtaining an appropriate business licence. It is a compulsory requirement for any company you want to start in Dubai. Let’s explore the different types of business licences in Dubai to set your business up for success in this tax-efficient city.
- What Is a Business Licence and Why Do You Need It in Dubai?
- Types of Business Licences in Dubai
- Business Licences in Dubai According to UAE Jurisdictions
- Who Grants Business Licences in Dubai?
- How to Get a Business Licence in Dubai
- How Much Does a Business Licence Cost in Dubai?
- Business Licence Validity and Renewal
- FAQs
What Is a Business Licence and Why Do You Need It in Dubai?
A Dubai business licence is proof of validation required to start a company in the city as a certified entity. The licence is a must to identify you and your company’s enterprise.
It is accountable for all your commercial dealings and the public’s safety, protection, and health. A business licence also classifies, protects and manages all the company’s legal operations.
Types of Business Licences in Dubai
One of the most important initial steps to starting a business in Dubai is to make it legally certified. That’s what a business licence does. Like other Emirates, Dubai authorities have also approved six different types of business licences. However, the judiciaries and agencies for all these licences differ.
Here is a breakdown of the different types of business licences in Dubai.
Commercial Licence
Companies with a commercial licence in Dubai are permitted to buy and sell goods. They are also eligible to import and export goods, carry out logistic operations, run brokerage agencies, trade products, provide services on rent and more.
This business licence must be obtained by trading goods in or outside Dubai. With a commercial business licence, you can sell or buy the following goods:
- Automobiles or their spare parts
- Gold and other precious stones or metals
- Oil, gas and other chemicals
- Used furniture
- Safety equipment
- Publications and media material, among others
Benefits of a Commercial Licence
Some top benefits of having a commercial licence include:
- A company can do ten related activities with one commercial licence in Dubai.
- Various types of companies to choose from.
- Safer business operations through the Department of Economic Development (DED) in Dubai and the company’s register.
- Makes it easier to open a corporate bank account in Dubai.
- Simple financial reporting with no taxes or corporate tax.
- Affordable renewal costs.
Professional Licence
Any person or company aiming to earn profits using an individual’s intellectual knowledge requires a professional business licence. These types of licences are provided to consultants, auditors, and other professionals with similar backgrounds.
If a company is owned by more than one person, it will be registered as a ‘Civil Works Corporation’, after they get their professional licence. However, complete ownership is provided to the individual with a professional degree.
In Dubai, you can get a professional licence in the following sectors:
- Management
- Computer
- IT and IT infrastructure
- Real estate
- Medical
- Commercial brokerage
- Tax
- Marketing
- Insurance
- Environmental and other consultancies
Tourism Licence
A tourism licence in Dubai is granted to businesses related to travel and tourism services. Because of Dubai’s growing economy and tourism industry, this licence has become one of the country’s most popular and standard licences.
Dubai offers many things to do, which attracts millions of visitors every year. That is why companies offering hospitality, recreation, accommodation, and tour management services must obtain a tourism licence in Dubai.
The following are the types of tourism licences in Dubai:
Outbound Tour Operator
This licence allows the company to plan and execute outbound trips from the UAE. With this licence, your tourism company can function smoothly inside and outside Dubai.
Inbound Tour Operator
An inbound licence permits the company to bring travellers from abroad to Dubai, unlike an outbound tour operator.
Travel Agent
Individuals who want to open their own travel agency in Dubai are provided with a travel agent licence, which allows them to issue tickets and provide visa assistance to UAE travellers.
Industrial Licence
Businesses can apply for an industrial licence if they are involved in industry and manufacturing-related activities. This licence allows businesses to assemble and manufacture goods using imported or local raw materials.
With an industrial licence in Dubai, you can manufacture:
- Textile
- Metals
- Food
- Paper
- Petroleum products
- Engines and equipment
- Dairy Products
- Animals and birds feed
- Carpets and many others
Agriculture Licence
You must obtain an agriculture licence if your company provides services related to harvesting crops, cultivating crops or pesticide trading. Businesses with an agriculture licence can also offer greenhouse installation services and run an agriculture consultancy.
Craftsmanship Licence
This licence is necessary for individuals involved in skilled work such as plumbing, carpentry, electrical work and similar trades. If a company hires a craftsman, they must apply for this licence.
It is important to note that operating or doing skilled jobs without a craftsmanship licence in Dubai is illegal and can result in hefty fines and a ban on the activity.
Business Licences in Dubai According to UAE Jurisdictions
A company can obtain its business licence in three primary jurisdiction options in Dubai. They are:
Dubai Mainland
If an individual or corporate entity wants to do business in Dubai’s local market, they must establish a business in Dubai’s mainland area. The DED will issue this business licence as a Mainland Licence.
Dubai Freezone
Free zones are designated areas in Dubai where specific business activities are allowed. Companies wishing to operate in these regions need a Dubai Freezone Business Licence. It’s important to note that these licences are only granted for limited business activities.
Dubai Offshore
An offshore company refers to a corporate firm operating outside its registered jurisdiction. In the UAE, approved authorities such as JAFZA, RAKEZ and AFZA issue offshore business licences.
Establishing an offshore company in Dubai is a good way to save on taxes, hold company assets and invest in real estate globally.
Who Grants Business Licences in Dubai?
The Department of Economic Development grants all the business licences in Dubai. It is an efficient government body that is responsible for regulating all operations related to starting a business in Dubai.
A business with a DED-granted licence is known as a ‘Local Company’. However, you must remember that the DED only grants business licences to mainland companies. On the other hand, Dubai Freezone companies are registered and licenced by other private authorities.
How to Get a Business Licence in Dubai
To get a business licence in Dubai, you must follow these steps:
- As an investor, you should choose the business’s name and activity to start the registration process. The presence of a UAE National is mandatory for businesses that require a professional licence. However, a local’s presence is optional for commercial and industrial licences.
- You must prepare a Memorandum of Association (MoA) with the local sponsor for the professional business licence.
- Next, submit your application form at the DED for approval of your business activity and desired name.
- One must also show a physical office space to apply for a business licence in Dubai. That is why, renting or leasing commercial property in Dubai should be completed before applying.
Required Documents
Here are the general documents needed to obtain a business licence in Dubai:
- A completed business licence application
- Memorandum of Association (MOA) signed by all shareholders and partners (For professional licence)
- Company name approval from the Department of Economic Development, Dubai
- Tenancy agreement attested by RERA and Dubai Municipality
- Passport copies of all shareholders and partners
How Much Does a Business Licence Cost in Dubai?
The exact cost of a business licence in Dubai is difficult to contemplate because there are many factors to consider. However, an estimate can be around AED 10,000 to AED 50,000, depending on the type of licence, business structure, activities and location, among others.
Business Licence Validity and Renewal
The maximum validity of any business licence in Dubai is two years. However, many companies apply for a 1-year business licence that renews before its expiry date.
Delays in licence renewals may result in hefty fines of around AED 5000 for running a company without a licence and AED 250 for late renewals. The DED also has a 30-day grace period and offers multiple payment options, both online and in person.
To renew your business licence in Dubai, you must:
- Keep your documents ready.
- Apply for a licence renewal form online.
- Make payments online, via SMS or in the DED office. The renewal fee is around AED 8000 to AED 15000, depending on the licence type.
FAQs
There are four main types of trade licences available in Dubai, and having one is legally required to do business in the city.
Depending on your specific requirements, the cost of a small business licence in Dubai can range from AED 10,000 to AED 50,000.
The IFZA Free Zone offers the cheapest trade licence in Dubai. They provide a cost-effective business trade licence without visas for AED 12,900. Additionally, they offer a licence without visas for a reduced price of AED 11,900.
Owning a company is a dream for many, and you can achieve it with rewards by carefully following each step. Remember, each step matters.
Also, take a look at these commercial office spaces for rent in Dubai. Starting a business requires a great location to impress your clients. Good luck!
