We all know Dubai as a city of vibrant culture, turbulent history, and modern infrastructure. Well, apart from all these incredible things, the city is also famous for its business opportunities. If you are also interested in setting up a business and getting a trade license in Dubai, this blog will help you to know everything about Dubai’s trade license.
What is a Dubai Trade License?
A Dubai trade license is a legal document issued by the Department of Economic Development (DED) that grants a permit to a company to conduct business activities within the emirate of Dubai. Any business entity, whether a sole proprietorship, partnership, or company, must have a trade license in order to conduct business in Dubai.
The trade license describes the type of business activities and ventures that organizations are permitted to carry out. Along with describing ownership and management details, it also describes the legal framework of the company. The trade license also includes the business address referred to as the registered office.
Different Types of Trade License in Dubai
The Department of Economic Development issues three main types of trade licenses in Dubai. Those are:
Commercial License
Businesses engaging in commercial activities like trading, retailing, and general commerce are granted a commercial license. If a company wants to buy and sell goods within UAE, they require this type of license.
Industrial License
Businesses involved in production, manufacturing, and other industrial operations are given an industrial license. Businesses that manufacture items in the UAE must get this kind of license.
Professional License
A professional license is given to people or businesses that offer expert services, including engineering, consulting, law, and medicine.
What is a Free Zone, Mainland, and Offshore License in Dubai
The three main business centers in Dubai are Free Zone, Mainland, and Offshore and thus Free Zone, Mainland, and Offshore Licenses are the three main types of business licenses issued on the basis of company location:
Freezone License
A Freezone is an established area in UAE where international investors can establish 100% owned businesses without the help of local sponsors. Free zone businesses are exempted from corporate and individual income taxes, customs tariffs, and other charges. Free zone businesses are only permitted to transact with counterparties from outside the UAE and are prohibited from operating within the UAE market.
Mainland License
A mainland license is a permit granted by the DED that enables a business to conduct business on Dubai’s mainland. These are issued by the DED and need to be approved by several government agencies. Corporate and personal income tax, customs tariffs, and other charges are levied against mainland businesses.
Offshore License
The competent agencies in the offshore jurisdictions of the UAE, such as Jebel Ali Free Zone Authority (JAFZA) and Ras Al Khaimah International Corporate Center (RAK ICC), issue an offshore licenses. An offshore corporation is generally used for keeping assets or investments and for international trade; it is not permitted to conduct business within the UAE market.
Benefits of Trade License in Dubai
Obtaining a Dubai trade license offers several benefits, such as:
Boost Local and International Trade
You have numerous options for importing or manufacturing goods if you hold a general trading license. You can either export your goods and benefit from markets abroad or import them and sell them locally in Dubai.
Sponsor Opportunities
Another advantage of getting a trade license in Dubai is that it is easy to sponsor dependents after getting the license. This means that you can take your family members and employees to Dubai without any hindrance.
Improve Credibility
To maximize their revenues, many businesses look for legal and regulatory vulnerabilities. Customers, however, are more likely to trust businesses that take the time to abide by the law.
Enjoy Tax Benefits
One of the major reasons why most people move to Dubai is to enjoy the benefits of tax incentives. In contrast to the majority of nations, Dubai exempts investors from paying import, sales, and manufacturing taxes. Therefore, because of the low cost business setup in Dubai, most entrepreneurs find this location perfect for their business.
Easy Set-up
A trade license in Dubai can be obtained significantly more quickly than other company licenses in the UAE. You ought to have no problems getting your license as long as you have the required paperwork.
Few Trade Restrictions
Due to the lack of trade restrictions, Dubai is a wonderful location for businesses. You won’t have to worry about limitations as long as your goods have been authorized under a general trading license.
How to Renew a Trade License in Dubai
The following steps will guide you on how to renew your trade license while your business operations in Dubai:
Check the Expiry Date
Verifying the trade license’s expiration date is the first step. The renewal procedure can begin up to six months before the license expires, but it must be finished before the license runs out in order to avoid penalties and fines.
Gather Required Documents
The next step is to assemble the required paperwork, which includes the expiring date trade license in Dubai, the tenancy agreement or Ejari, the owner’s or manager’s Emirates ID, and any other pertinent documents.
Apply for Renewal
You can apply for a trade license renewal online through the DED site or in person at one of the DED’s customer service centers. The necessary paperwork and the renewal payments must be sent with the application.
Get Approvals
The DED will assess the application when it is submitted, and if all conditions are satisfied, it will grant the renewable trade license in Dubai. Before awarding the renewed license, the DED may occasionally require more information or inspections.
Collect the Renewal License
When the license is renewed, it can be picked up at a DED customer service center or delivered to the company’s registered address.
