Understanding Trade License Costs in Dubai
As a business start-up owner, you must know the whole process from the start till the end. To obtain a trade license for your business is essential, without doing so you can’t proceed further. It’s a green signal from the government that now you have a right to start and operate a new business in Dubai. For a trade license, it is essential to know the Dubai trade license cost
On setting up a company in Dubai, ensure to grant specific permissions needed for conducting business activities which is a trade license. Without a trade license, you can’t start and operate a business in Dubai. It allows you to conduct most of the business activities in the UAE. The UAE General Trade License is issued by the DED Dubai. It is called a Dubai DED license.
Introduction to Trade Licenses
In the most economic and prominent hub of the world Dubai, a trade license is one of the initial steps to owning a business. The entrepreneurs acquire business setup services for various options available:
- Mainland Company Formation in Dubai
- Offshore Company Formation in Dubai
- Freezone Company Set up in Dubai
It is essential to go through the complete business process before you set up a business in Dubai. From trade name registration till your company starts functioning.
Importance of Obtaining a Trade License
Trade license is a green signal for businesses that want to manufacture and import goods. By obtaining a trade license, you will be able to:
- Send your products to the local Dubai market or
- To send them abroad and gain profits.
Factors Affecting Dubai Trade License Costs
Typically, business owner have to pay 15,000 to 50,000 AED to obtain a Trade License in Dubai. The two variables that affect the Dubai trade license cost are setup location and business activities.
Type of Business Entity
There are three types of business entities in Dubai:
- Sole Proprietorship
- Civil Company
- Limited Liability Company
Limited Liability Company
The limited liability company is the most employed type of company in Dubai. It can be a private or public company as well, subject to its various requirements. The structure of such a business type depends on whether the company will be registered in its free zone or Dubai.
Business Activity and Industry
Business activity and industry should be mentioned in the trade license. For registering a trade name, choose a unique trade name. After that, you need to register it with the relevant DED or the respective free zone authority. You will get the initial approval from the DED or the free zone authority. It must outline your shareholders and business activities
Location of Business Setup
Choosing the best location for your business setup in Dubai depends on several factors such as target market, nature of your business, and Budget.
For excellent connectivity and central location, the Dubai International Financial Centre (DIFC) is a great option. To many multinational companies, it’s a home that offers a wide range of amenities and facilities. However, for start or small businesses, it’s quite expensive.
Here comes another popular location, the Dubai Multi Commodities Centre (DMCC). Offering free zone status, which means that:
- Businesses can enjoy 100% ownership
- Zero taxes, and
- Full repatriation of capital and profits.
It is an ideal location for businesses involved in commodities trading. For other type of businesses, it may not be the best fit.
Additionally, for an affordable option, you can go for Dubai Outsource Zone (DOZ) as it is worth considering. It is an outsourcing and technology hub offering cost-effective solutions for businesses
Additional Permissions and Approvals
Additionally, a business operating license from DED or the Dubai Free Zone need to be obtained depending on the type of business. These are called additional approvals or third-party approvals. It is a confirmation permit or approval from a third-party governmental establishment. It allows you to do a particular business activity. The third-party approvals are called No objection certificates or NOC letters (NOC). They are the most common additional approvals in the UAE.
Types of Trade Licenses in Dubai
In Dubai, mainly four types of trade licenses are working. Given that some are exclusive ones only for specific free zones and business activities.
We delve into the four different types of trade licenses. With this information, you will get familiar with each type now.
- commercial license
- Industrial license
- Professional license
- Tourism license
This type of license allows a company to conduct trade activities such as selling and buying goods.
The industrial license allows the company:
- To manufacture products
- Import the raw material required for the product, and
- Export the finished product.
- On seeking an industrial license, it is mandatory to have a physical office in Dubai
The professional license can be utilized by both professionals and service providers. You can enjoy 100% company ownership with this license with no need of a local sponsor.
-
Tourism License:
Dubai is a tourism hub and it values Tourism. For tourism sector, it has a separate license for companies. In regard to this, the tourism sector has different regulations, taxes, compliance, and permissions
LLC Trade License
LLC commonly known as Limited Liability Company. It is a legal structure for businesses set up in Dubai. It’s a separate legal entity from its owners. It means that the owner’s liability is limited to the capital amount they have invested in the company.
The cost for an LLC license in Dubai starts from AED 18,500. On the other hand, the additional charges will be AED 2,000 for foreign trade name and non-Arabic name. While the renewal cost for an LLC license in Dubai is around AED 8,000-AED 15,000.
Dubai Mainland License
A Dubai mainland license is a document that allows you to conduct business activities within the city without any restrictions. This license validates your company as a legal entity. This license is necessary for a business setup in Dubai mainland.
Small Business License
The owner who wants to start and run a particular type of business in the city, country, state, and region is required to obtain a small business license. By issuing this permit, the company has the government’s approval to operate.
Conclusion
In conclusion, it is essential to obtain a trade license to start a business in Dubai. Without a permit from Dubai government, the UAE citizen can’t start operating his business in Dubai. It is crucial to know the business industry or location before making a decision. These are the factors that affect your cost to huge numbers.
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Shak Malik Muhammad RishadHe is an accomplished Business Development Executive with a strong background in driving revenue growth and fostering strategic partnerships. Known for his proactive approach and keen market insight, he excels in identifying new business opportunities, developing innovative strategies, and building long-lasting client relationships.
