Guide to Commercial Licence in the UAE
The United Arab Emirates (UAE) is a global hub for business and commerce, attracting entrepreneurs and investors worldwide. It provides a variety of licence categories, including retail, industrial, professional, and tourism.
If you're considering starting a business or expanding your existing one in the UAE, obtaining a commercial licence is one of the first and most critical steps. A commercial licence is a legal necessity for persons or firms that want to conduct business in a particular jurisdiction.
Common Types of Licences Available
1. Commercial Licence: This licence is issued to companies engaged in general trading and commercial activities.
2. Professional Licence: For individuals or entities providing legal, medical, or consulting services.
3. Industrial Licence: If you plan to engage in manufacturing or industrial activities, you will need an industrial licence.
4. Tourism Licence: You will require a licence if your business is in the tourism sector.
5. E-Commerce Licence: For businesses primarily operating online.
6. Media Licence: For publishing, broadcasting, or other media-related companies.
7. Freelance Permit: Suitable for freelancers and solo entrepreneurs
What is a Commercial Licence?
A commercial licence permits a business to import, export, and trade goods and products within the country. This licence is issued by the Department of Economy and Tourism (DET) in the Emirate where the business will be located.
A commercial licence covers various commercial activities, including trading in goods, retailing, wholesale, general trading, and other business-related activities. The scope of activities allowed under a commercial licence may vary based on the licence type and the business's legal structure.
Meanwhile, businesses engaged in industrial activities or providing professional services require different licences.
Business Activities under Commercial Licence
Here are some of the authorised activities allowed under the Commercial licence in Dubai:
1. Automobile trading
2. General trading
3. General warehousing
4. Import and export
5. Rental services
6. Home appliances trading
7. Building maintenance services
8. Advertising services
9. Exchange services
10. Garments and textile trading
Benefits of Getting a Commercial Licence
- Allows businesses to conduct several activities under one licence.
- Mainland companies can trade in any part of the country.
- Open a corporate bank account
- Freezone companies with commercial licences are allowed to repatriate capital and profits.
- Hire employees as per the office space.
- Allows companies to import and export products overseas.
How to obtain a commercial licence in Dubai?
- Select a Jurisdiction and Business Structure
Choose between setting up business in a freezone or on the mainland. Several free zones are available with specific advantages, including a range of licences. Moreover, select a legal structure for the business. Common legal structures: Sole proprietorship, a limited liability corporation (LLC), Branch, Holding company.
- Registration of a Trade Name
Choose a commercial name for your company that adheres to the licencing rules. Submit a trade name reservation registration application and the necessary paperwork and costs. This step safeguards your company's identification by preventing others from using the same or similar name.
- Rent a Commercial Property
Find a suitable commercial space for your company's activities. Lease a location that conforms with the authority's standards and criteria. Some governments may require retail office space, while others permit virtual offices or shared workplaces.
- Obtain Primary Approvals
Get permission from appropriate government agencies or regulatory authorities, depending on the nature of the firm. For example, if you intend to engage in food-related activities, you must seek clearance from the food safety department. Similarly, healthcare-related enterprises must obtain permission from the health authorities.
- Submission of an Application
Next, after selecting the name, activity and location, apply for the licence in the chosen jurisdiction with all documents. The necessary documents for registration depend on the free zone and mainland authorities.
- Issuance of a Trade Licence
You will be issued a trade licence once your application has been examined and accepted. This licence legally allows you to conduct business within the jurisdiction. The trade licence outlines the permitted business activity, the duration of validity, and any limitations or requirements.
Documents required for a Commercial Licence
- Passport copy of the shareholders
- Passport-size photographs
- Letter of intent
- Details of share capital
- Business plan
- Reference certificates
- DET's letter of approval for trade name
- Leasing contract for the office
- Notarised MOA
Compliance and Renewal
Typically, commercial licences have an expiration date. To guarantee continued legal operation, renew your licence before it expires.
Obtaining a commercial licence in the UAE is a well-defined process, but it requires planning and adherence to regulations. The type of specific requirements may vary with Emirates and the jurisdictions, so it's essential to conduct thorough research and consult with local authorities or business advisors.
The UAE is known for its business-friendly environment and the opportunities it offers entrepreneurs. With the proper guidance and compliance with the rules, you can establish a successful business in this thriving nation. So, if you're ready to embark on your entrepreneurial journey in the UAE, take the first step by obtaining a licence for your business.
How can Ascent Partners help?
Ascent Partners is a boutique consultancy providing bespoke, end-to-end corporate services ranging from company formation to accounting, bookkeeping, and compliance services for entrepreneurs looking to set up their next venture in the UAE. We work alongside to strategise, start, and scale businesses in the UAE and the broader region.
With a combined experience of 50+ years, our expert consultants provide reliable and unparalleled guidance throughout all strategic phases of a business' evolution.