COMMERCIAL LICENSE

In order to buy and sell any commodities or goods or involve in a trading activity, companies in Dubai, UAE have to possess a valid Commercial License. Therefore, if you are planning to set up a business activity connected with trading in Dubai – apply for a Commercial License – it is as simple as that. Commercial License in UAE is issued from 3 jurisdictions. The investor may select from any of the 3. The investor should opt for the most feasible location prior to applying for the Commercial License.

The “strategic location of Dubai” is one of the biggest advantages as far as any business establishment or trading firm is concerned. Dubai is one of the most happening trading hubs in Asia. It is well connected by international air and sea routes. Dubai has the 3rd busiest airport in the world – Dubai International Airport – serves as an international gateway to both Asia and Africa. Dubai has well-equipped and world-class seaports like Port Rashid, Jebel Ali and Al Hamriya that handle both passenger and cargo operations. A well-planned and business-friendly transport infrastructure make Dubai – a trader’s paradise.

Prior to the application for a commercial license in Dubai, one needs to decide on the trading activities that are going to be conducted under the same. Have a clear understanding of the type or category of your business activity before you set up a business in Dubai. Business activities related to buying and selling and certain service-oriented endeavours come under Commercial License. The major activities that come under the commercial license in Dubai, UAE are listed below.

• Logistics

• Import and export

• Tourism and Travel

• Import and Export

• Brokerage

• Product-oriented sales (electronics, construction, shops, stores etc)

• Real Estate

• Rental business

After deciding on the business trading activities, choose your business trade name and register it. Following this, submit all the relevant documents to the Department of Economic Development and the UAE Federal Ministry of Economy to get your commercial license in the country.

The DED will issue a commercial for your business in Dubai based on the documents you submit. The commercial license in Dubai will be valid for one year; after expiry, you need to renew it. Here are the documents needed to apply for a Commercial License in Dubai.

Fill the name of the company in an application form. The name should be specified in both English and Arabic.

Lease contract form connected with the registered address of the company.

Sponsor/partner MOA

Dubai Municipality Department permit sanctioning the business address

License Fee proof.

DED issues the Commercial License after verifying the above-mentioned documents.

The validity of the license is 1 year and therefore it is mandatory to renew the same when it reaches the expiry. The documents needed to obtain the Commercial license and the ones needed for license renewal are not identical. You have a different group of Documents for License renewal. And they are listed below.

Copy/original of license

Registered address lease contract (copy)

Concerned authority approvals (if needed)

Information regarding staff’s accommodation, applicable to foreign shareholder firms.

After you have accomplished the license renewal, the renewed trade license has an extended validity of 5 years.

“Instant License” was launched in Dubai in 2017 as a measure to cut down the time involved in the process of issuance of Commercial license. The initiative was launched by DED’s BRL sector. Instant License scheme drastically reduced the time by bypassing the lease contract formalities (which is otherwise mandatory), thereby cutting down the registration and license issuance time by ninety per cent. After the launch in 2017, 6,100 Instant licenses have been issued till date. Excluding public and private shareholding firms, any business activity can take advantage of the scheme.

Select the legal form followed by the Business activity. Based on the selected legal form, add the partners. Identify the aspects like partner’s capital share and profit and loss distribution. Trade name reservation – you may either reserve a new trade name or select an automatically generated one.

Select the commercial register data of the company and specify the Capital value. Select or skip the electronic MOU.

Wait for the payment voucher and when the voucher has been issued, remit the fees. The total cost involved in attaining Commercial License in Dubai is AED 10,000. If you have plans to set up an Import/ Export company or any buying or selling endeavor in Dubai/UAE, Frank&Frank can guide you through all the official formalities regarding licensing services.

Have doubts regarding Commercial Business License or renewal of your existing License, feel free to contact Frank&Frank business consultants.

Obtaining a commercial license in Dubai is comparatively easier than many of the other types of business license. Moreover, the commercial license possesses several advantages. The business firm issued with a commercial license is permitted to carry out varying activities.

The advantages of UAE commercial license are:

• It allows the company to trade more than one product.

• The business entity can undertake trading in any region in the UAE. Thus making optimum use of the markets across the country.

• Auditing is not mandatory for renewal of commercial license.

• The company can seek for employment visas for recruiting foreign employees.

• The business organization with commercial license is allowed for foreign commercial activities and trading.

• Commercial license permits companies to choose their location anywhere in Dubai.

• The reporting of financial transactions, turnover, profit and losses is easier than other type of licenses.

• Opening a corporate bank account is unfussy when the firm has commercial license in Dubai.

• Companies in the Free Zone, having commercial license, can repatriate 100% profit. Those are exempted from taxes too.

The steps for obtaining a Dubai commercial license are elaborated in the subsequent paragraphs. It may be noted that some steps have to be pursued simultaneously. And the sequence may vary depending upon the amendments in procedure from time to time. Meticulous compliance of formalities is vital for the smooth functioning of your business entity. The federal laws of the land are stringent for preventing illegal activities and unauthorized business activities. Follow the procedure judiciously, submit all the documents and get the commercial license without any delay.

Frank & Frank will help you to gain a uae commercial license without any complications and will aid you in setting up of business. The official formalities for a commercial license are appended below.

Step 1. Confirm the Business Activity

Choose the type and product of business you want to start in the UAE. Additional approvals may be necessary according to the type of business activity.

Step 2. Obtaining Initial Approval

The Dubai Economic Department (DED) issues initial approval for commercial license. Apply for initial approval along with the requisite documents.

Step 3. Find a Reliable Local Sponsor

The federal laws stipulate that you must have an Emirati as your local sponsor for establishing a business in Dubai Mainland and obtaining a commercial license. The local sponsor will be holding 51% of the shares in the company. The ex-pats and the shareholders are authorized for the remaining 49%. The legal formalities and commercial approvals will be on the name of the sponsor. Therefore, you must get a reliable sponsor to support your firm. Frank & Frank can help you get a trustworthy local sponsor. We also provide exclusive Royal sponsorship for premium business set-ups.

Step 4. Formulation of Legal Structure

Article of Association (AOA) and Memorandum of Association (MOA) is called the constitution of a business entity. The documents will lay out the rules, regulations and policies to be followed by the company, the management board and employees. The documents have to be prepared both in English and Arabic.

Step 5. Application for Approval for Trade Name

The trade name you select must be according to the specific norms promulgated by the authorities. Else, the name will be rejected. The trade name should neither be similar to any of the existing firms. Neither should it have more stakeholders. Religious and political references are strictly prohibited.

Step 6. Hire an Office Space

Rent an office space in Dubai. However, a few types of business firms can have virtual office or flexi-desks. You must complete the registration at Ejari if you are renting or leasing an office space.

Step 7. Rent or Lease a Commercial Space

The authorities have stipulated specific dimensions for the commercial space. You must rent a commercial space for the business. The officials will inspect the commercial space for confirming the dimensions and completeness of legal formalities. Ejari formalities also must be completed for the space you are hiring.

Step 8. Obtain Approvals from Ministries and Departments

The additional approval may not be required urgently. You can commence the business and obtain the approvals in due course.