Operating a business in the United Arab Emirates (UAE) requires obtaining a relevant trade license. This official certificate legally allows you to conduct various trading, industrial or professional activities in the country. Based on your work area, you must get one of three major license types.
What is a General Trade License?
A general trade license formally approves your business operations as per UAE rules. It certifies that you meet all zoning, quality, environmental and other regulations set by authorities. Let’s understand what activities the main trade licenses permit:
Commercial License: For trading goods and services within the country and worldwide. Allows retail or wholesale operations.
Industrial License: For manufacturing products. Permits setting up production units, factories, processing plants.
Professional License: For offering expertise to clients as services. Includes areas like healthcare, finance, marketing, design and more.
The license category must align with your work area. Next, let’s look closer at the types.
Types of General Trade Licenses in Detail
The UAE has three broad categories of trade licenses for businesses:
Commercial License
This license allows trading goods or services within UAE and abroad. You can set up retail shops and stores or conduct wholesale trading. Some examples of permitted activities:
- Trading in electronics, food items, vehicles, textiles, stationery, etc.
- Offering various services like maintenance, events, advertising, recruitment
- Acting as a local distributor or dealer for brands and products
- Duration: Typically issued for 1-3 years depending on the Emirate.
- Cost: Minimum fees is AED 15,000 per year, varies across Emirates.
Industrial License
This license approves setting up facilities for manufacturing products. Some instances of allowed activities:
- Manufacturing garments, furniture, engineering machinery and equipment
- Building assembly units for electronics like mobile phones, TVs etc.
- Running processing units for raw materials like oil, textiles, food items etc.
- Duration: Issued for 1-3 years based on environmental clearance.
- Cost: Starts from AED 25,000 per year depending on Emirate.
Professional License
As the name suggests, this license allows expats and residents to offer services based on their professional skills, qualifications and expertise. Some examples:
- Doctors, nurses, therapists, labs – medical services
- Lawyers, legal consultants – legal services
- Auditors, accountants, consultants – financial services
- Engineers, architects – technical design services
- Marketing, HR, business consultants
- Duration: Typically issued for 1 year by authorities.
- Cost: Starts at AED 7,000 per year, depending on the Emirate.
Now you know the detailed activities permitted under each license type.
Key Requirements for Getting a Trade License in UAE
UAE authorities thoroughly examine all applications to enforce strict compliance and quality standards. Some key requirements are:
- Approval from the Department of Economic Development (DED) on your proposed business activity.
- Tenancy contract registered for suitable commercial space or office.
- Copies of valid Emirates ID and passport for all owners and partners.
- Location suitability certificate from relevant zoning authorities.
- Manager’s visa or appointment of a UAE national as local service agent.
- Meeting these rules is vital for your application to get approved.
Step-by-Step Process for Getting a Trade License
Follow these crucial steps to get certified with a trade license:
Step 1: Identify the Right License Category
Choose between commercial, industrial or professional category based on your business activity.
Step 2: Obtain Initial Approval
Get an initial go-ahead on your proposed activity from the Department of Economic Development.
Step 3: Arrange Compliant Office Space
Rent appropriate office or retail space as per trade license zoning norms.
Step 4: Submit Documents and Fees for Final Approval
Compile all documents, contracts, fees and submit the final application.
Step 5: Obtain Trade License to Start Operations
Upon approvals, you will receive the official trade license to kickstart legal operations.
Key Benefits of Having a Trade License
Getting certified with an appropriate trade license unlocks many incredible benefits:
- Can legally conduct business
Tax exemptions and incentives
The UAE offers attractive tax benefits and financial incentives for licensed establishments to boost investment. Based on free zone and activity, you can avail of full or partial tax holidays.
Access to funding and loan options
Banks and financial institutions provide more flexible lending terms and priority funding access to licensed businesses operating legally.
Local and international credibility
A trade license lends tremendous credibility with suppliers, partners, customers and government entities, both within UAE and globally.
In short, it formalizes your business entity and gives it legitimate standing.
Conclusion
We discussed the meaning of general trade licenses, three main types, key requirements, step-by-step application process and advantages of having one. By selecting the right license category and meeting all regulatory guidelines, you can undertake compliant business activities in the UAE. Reach out for any further assistance.
FAQs
Yes, freelancers can register for an appropriate professional category license in most Emirates.
There is no minimum capital requirement mandated by authorities for most general trade license categories.
Yes, expats can apply for and obtain trade licenses by partnering with a UAE national or company. The visa process differs slightly.
Yes, submitting audited accounts by an approved auditor is mandatory yearly for license renewal.
