Dubai is one of the fastest-growing business hubs in the world, offering entrepreneurs and investors numerous opportunities to start or expand their businesses. However, before you can start operating a business in Dubai, you need to obtain a commercial license. A commercial license in Dubai is a legal document that permits companies to engage in commercial activities within the UAE.
In this blog, we will discuss everything you need to know about obtaining a commercial license in Dubai, including the different types of licenses available, the application process, and the requirements you need to fulfill. So, whether you are a small business owner or an international corporation, read on to learn more about obtaining a commercial license in Dubai.
What is a Commercial License in Dubai
A commercial license in Dubai is a legal document that allows companies to engage in commercial activities within the UAE. It is a requirement for businesses of all sizes and types, from small startups to multinational corporations. The commercial license specifies the type of business activities a company is allowed to conduct, and the license category depends on the nature of the business.
Companies must obtain the relevant commercial license before they can begin trading or conducting any commercial activity in Dubai. The license is issued by the Department of Economic Development (DED) and is mandatory for all businesses operating in Dubai. It ensures that businesses are operating in compliance with local laws and regulations and helps to protect the interests of customers and investors.
The licensing process involves a thorough review of the company’s business activities, financial statements, and other relevant documents. Once the license is granted, businesses are required to comply with various regulatory requirements, such as submitting annual reports and maintaining proper financial records.
The Process of Getting a Commercial License in Dubai
Choose a Business Activity and Legal Structure
The first step in getting a commercial license is to identify the business activity you want to engage in and the legal structure of your business. The type of license you require will depend on the nature of your business activity, and the legal structure will determine the type of license you need to obtain.
Dubai allows various legal structures for businesses, including sole proprietorships, partnerships, and limited liability companies (LLCs). An LLC is the most common type of business structure in Dubai and is preferred by most investors. LLCs are considered separate legal entities and offer limited liability protection to shareholders.
Choose a Trade Name
After determining the business activity and legal structure, the next step is to select a trading name for your company. The trade name should be unique and not similar to any other existing company name. You can check the availability of a trading name on the DED website or seek assistance from a business setup service provider.
Apply for Initial Approval
Once you have chosen the business activity, legal structure, and trade name, you need to apply for initial approval from the DED. The initial approval process involves submitting the necessary documents, including passport copies of the shareholders and the proposed business activity, to the DED. The approval process typically takes two to three days.
Get External Approvals
After obtaining the initial approval, you need to obtain external approvals from various government departments, depending on the nature of your business activity. For example, if you plan to operate a restaurant, you need to obtain approval from the Dubai Municipality and the Dubai Health Authority. Similarly, businesses involved in manufacturing and trading require approval from the Ministry of Economy and the Chamber of Commerce and Industry.
Sign the Memorandum of Association (MOA)
The Memorandum of Association (MOA) is a legal document that outlines the shareholding structure, business activities, and other details of the company. The MOA must be signed by all shareholders and notarized at a Dubai court. The MOA is an essential document for obtaining a commercial license.
Rent a Commercial Space
To obtain a commercial license in Dubai, businesses are required to have a physical presence in the UAE. This means you need to rent a commercial space that is compliant with local laws and regulations. The commercial space should be rented in the name of the company and must be approved by the DED.
Obtain the Commercial License
Once you have completed all the above steps, you can apply for a commercial license from the DED. The application process involves submitting the necessary documents, including the initial approval certificate, MOA, lease agreement, and external approvals, to the DED. The license fee depends on the type of business activity and legal structure.
The commercial license is typically issued within five to seven working days. After obtaining the license, businesses are required to renew it annually and submit the necessary documents and fees to the DED.
Activities Come Under a Commercial License in Dubai
A commercial license in Dubai allows businesses to carry out commercial activities such as trading, manufacturing, and professional services. The license permits companies to conduct their business activities legally within the UAE.
Trading activities covered under a commercial license include buying and selling goods, wholesale trading, and retail trading. A commercial license is also required for manufacturing activities such as food production, textiles, and other industrial products. Professional services such as legal, accounting, engineering, and consultancy services also fall under the commercial license category. Businesses offering these services must obtain a commercial license to operate in the UAE.
However, it is important to note that some business activities require additional approvals from government departments. For example, businesses involved in healthcare services, food production, and education require approvals from the Dubai Health Authority, Dubai Municipality, and the Knowledge and Human Development Authority, respectively.
Additionally, businesses offering certain types of services such as travel agencies, real estate agencies, and event management companies require a special license from the relevant authorities.
Cost of a Commercial License in Dubai
The cost of a commercial license in Dubai can vary depending on the type of business activity and the legal structure of the company. The fees associated with a commercial license are determined by the Dubai Department of Economic Development (DED), which is responsible for issuing and renewing business licenses in Dubai.
The cost of a commercial license in Dubai includes a one-time application fee, an annual renewal fee, and additional fees for services such as name reservation and amendment of business activities. The application fee for a commercial license in Dubai can range from AED 2,000 to AED 10,000 depending on the type of business activity.
The annual renewal fee for a commercial license can also vary depending on the legal structure of the company. For example, the annual renewal fee for a sole proprietorship is AED 2,000, while the fee for a limited liability company (LLC) is AED 15,000.
In addition to the application and renewal fees, businesses may also incur additional costs for services such as name reservation and amendment of business activities. The cost of name reservation is AED 650, while the cost of amending business activities can range from AED 250 to AED 5,000.
It is important to note that some business activities may require additional approvals from government departments, which can also impact the cost of a commercial license. For example, businesses involved in healthcare services, food production, and education require approvals from the Dubai Health Authority, Dubai Municipality, and the Knowledge and Human Development Authority, respectively.
Start Any Business UAE is the go-to destination for individuals and businesses looking to obtain a commercial license in Dubai and UAE. Our team of experts is well-versed in the local laws and regulations and is dedicated to providing hassle-free and seamless license acquisition services to our clients. We work closely with the relevant authorities to make sure that the process is completed in a timely and efficient manner. Whether you’re a start-up or an established business, we offer tailored solutions to meet your specific needs and help you succeed in the dynamic business landscape of Dubai, UAE.
Also Read: Who Needs a Professional License in Dubai?
