Are you considering starting a business in Dubai or elsewhere in the UAE? Would you like to engage in both domestic and foreign trade? If so, obtaining a commercial license is an important step towards legally starting your business operations. In this post, we will walk you through the steps of obtaining a commercial license in Dubai, including the benefits, required paperwork, expenses, and more.
What is a Commercial License?
A commercial license is a legal permit that allows individuals and businesses to engage in trading activities, both in goods and services. With a commercial license in Dubai, you have the flexibility to conduct various business activities and trade domestically and internationally. It enables you to buy and sell a wide range of products, from jewelry and toys to furniture, automobiles, and virtual goods. Additionally, you can provide specific services like brokerage or real estate services under a commercial license.
How to Obtain a Commercial License in Dubai?
The process to obtain a commercial license in Dubai are listed below:
Choose a name and legal structure for your company
The first step is to choose a unique name for your company that complies with the rules and regulations of the Dubai government. Ensure that the name is available for registration and does not contain any prohibited content. Next, determine the legal structure for your company. You have several options to choose from, including sole proprietorships, corporations, partnerships, limited liability companies (LLC), holding companies, and free zone companies.
Select the Business Activity You Want to Perform.
Finalize the specific business activity or activities you wish to engage in with your company. Consider your skillset, available resources, and manpower when selecting a business activity. A commercial license allows you to choose from a wide range of options, and you can even perform multiple activities if you have the capabilities to do so.
Choose the location of your business operations.
Decide whether you want to establish your business on the mainland or in one of the free zones. Both options have their advantages and requirements. Free zones offer benefits such as 100% ownership, tax advantages, quick company incorporation, and no currency restrictions. However, if you choose the mainland, you will need a local sponsor who owns at least 51% of the company. Establishing your business on the mainland allows for direct access to the UAE market.
Apply for a commercial license
Submit your application for a commercial license to the Dubai Department of Economic Development if you are operating on the mainland. If you are establishing your business in a free zone, apply through the respective free zone authority. You can also complete the application process online.
Submit Relevant Documents
Prepare and submit the necessary documents to support your application. The required documents may vary depending on the type of business activities you intend to perform under the commercial license. Ensure that all the information provided is accurate and up to date to avoid delays or complications. Seeking professional assistance at this stage can be beneficial.
Pay the Fees and Collect the License
Once your application is approved, you will need to pay the required fees to obtain your commercial license. The approval process may take some time, but once the payment is confirmed, you can collect your license from the local office. With the commercial license in hand, you can legally commence your business operations in Dubai.
Documents Required to Obtain a Commercial License in Dubai
To obtain a commercial license in Dubai, you will need to submit certain documents. Here is a list of the essential documents:
- Completed application form with the registered company name
- Registered lease contract
- Copy of shareholders’ passport
- Passport-size color photos (2)
- Investor VISA (if required)
Cost of Getting a Commercial License in Dubai
The cost of obtaining a commercial license in Dubai is a fundamental consideration when setting up a business. The price typically ranges from AED 10,000 to AED 30,000, depending on various factors. These factors include the location of your business, the size of your company, and the type of business activity you intend to engage in. Additional approvals may also incur extra costs. If you are a startup company, starting your business in one of the free zones can be a cost-effective option.
Advantages of Obtaining a Commercial License in Dubai
Some of the advantages of obtaining a commercial license in Dubai are mentioned below:
- A single commercial trade license can cover up to ten activities.
- Flexibility in selecting from a variety of corporate structures.
- The ability to execute several related commercial operations under a single license.
- Trading companies with commercial licenses do not need to be audited for license renewal.
- A simplified approach for getting a commercial trade license in Dubai.
- There are no personal taxes and minimal corporation taxes.
- Ability to transfer profits to your home nation and relocate capital upon liquidation.
- Opportunity to hire foreign workers and sponsor their visas with the necessary office space.
- Authorization to import foreign products and export them internationally.
Documents Needed for Commercial License Renewal in Dubai
When renewing your commercial license in Dubai, you will need to submit the following documents:
- Copy or original of the license
- Copy of the leasing contract for the registered address.
- Concerned authority approvals (if necessary)
- Information on staff accommodation (relevant to foreign shareholder enterprises)
Once the license is renewed, it will be valid for another five years.
Activities List For Dubai Commercial License
The Dubai Department of Economic Development provides an extensive list of business activities that can be performed under a commercial license. Here are some examples:
- Medical Commodities
- Aircraft and train spare parts trading
- Bags and Packaging material trading
- Beauty and baby care essentials trading
- Animal skin trading
- Flowers and plants trading
- Home appliances trading
- Surgical Equipment
- Cleaning services
- Advertising services
- Foodstuffs
- Furniture
- Readymade Garments
- Software
- Communication Equipment
- Automobiles
- Logistics
- Import and export
- Brokerage
- Real Estate
- Rental business
This list is not exhaustive, and you can access the full list from the Dubai Department of Economic Development.
Conclusion
Acquiring a commercial license in Dubai is a crucial step in establishing and operating your business legally. It allows you to engage in a wide range of trading activities, both domestically and internationally. By following the steps outlined in this article and providing the necessary documents, you can obtain your commercial license and begin your entrepreneurial journey in Dubai. Remember to consider the advantages, costs, and benefits of each business jurisdiction before making a decision. Seek professional assistance from OnDemand International, if needed to ensure a smooth and successful license application process.
