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How to get a trade license in Dubai?

 

UAE is popularly known as the business hub of the Middle East. There has been an immense growth in the financial, business, trade and logistics sectors over the last two decades. Their contribution to the world economy is substantial. There are many business setups in UAE, interested in trading goods with neighboring countries; such people should have a valid general trading license to do the same. A Trade License is not just a formality in Dubai; it is more of a necessity. It dictates the scope of your business activity along with legitimizing your Business. Although costlier, having this license has its own perks and advantages. When applying for it, one has to take great care of it.

The Statutory body, The Department of Economic Development (DED), with the institutional support from the Dubai Chamber of Commerce & Industry regulates and controls the licensing procedures for an entity in Dubai. Certain Ministries’ and other authorities’ approval is necessary for some categories of business. Such instances include pharmaceutical and medical products from the Ministry of Health, banks and financial institutions from the Central Bank of the UAE, manufacturing from the Ministry of Finance and Industry, insurance companies and related agencies from the Ministry of Economy and Commerce. Businesses engaged in oil or gas production and related industries require more detailed procedures. Businesses like printing and publishing, food trading require more clearances than say a general trading business. In short, all commercial and industrial businesses in UAE should be registered with the Chamber of Commerce and Industry in the respective Emirate.

A general trading license in UAE costs approximately from AED30,000 to AED40,000, depending upon several factors. The type of services and activities performed by a business is the factor that indicates which type of license you should apply for. There are mainly three types of general trading licenses. They are Commercial License, Industrial License and Professional License. You should apply for the commercial license if you intend to engage with your company in trading. Industrial License is to be issued to a company that will engage in manufacturing or any industrial activity. The Professional trade license is a special business permit and is usually issued in industries such as accounting and finances, management, IT, healthcare, education, advertising, marketing, etc. The professional trade license comes with many advantages. It can be obtained by sole proprietors in Dubai. If you are a foreign citizen applying for a trade license and if you want full foreign ownership over the sole proprietorship you must first become a resident of Dubai.

company setup in dubai

To obtain the general trade license one has to follow a few steps. First of all, categorize your Business. The Free Zone or the Department of Economic Development (DED) provides a category list. So you must identify the appropriate category for your Business. Worldwide Formations can assist you in selecting the relevant one for you if you are unable to pinpoint the suitable category. Choosing a suitable legal structure is the next step. Your company’s legal structure is just as important as the trade name of your company. Several free zones in Dubai allow you to operate it. The legal structure mainly depends on the number of shareholders you have in your business, and the jurisdiction you choose to operate your business in. Choosing a trading name is the next step. While choosing a trading name whether it defines your business activity and also make sure it adheres to the government guidelines. You must inquire with the respective free zone authority or DED before finalizing your choice of name. It is to cross-check whether the proposed trade name has already been registered by any other business or not. The next thought you need to have is on how much you need to invest. Depending on your business you must have an idea of your investment. The next is an action that you have to make is to lease or purchase office space. Choose an office space that suits your budget and business requirements and also make sure, you can conveniently accommodate your employees. The next step is to get initial approval from the authority. It is a fundamental step for obtaining a trade license. Make sure you have the documents such as Duly-filled application form, The master plan of your business activity, Copy of present trade license, in case you run a local company (optional), Copy of passport (of every shareholder/partner associated with your business legally), Copy of signature (of every shareholder/partner associated with your business legally), Certificate of reference from the bank or 2 years financial statement, NOC from your sponsor, Unit title deed, Letter of Intent and Original and notarized copy of Registry Identification Form (for the Director) before presenting to the authority for the initial approval. The initial approval is followed by the payment of fees for registration and license. Make sure you have submitted documents such as Application form for registration duly filled, Notarized and attested Board Resolution for the appointment of Director or Manager, Notarized and attested Power of Attorney endowed to the Director or Manager, Notarized and attested Memorandum and Articles of Association, Notarized and attested proof of the signature of the Director or manager, Passport-size photograph of the Director or the Manager and Details of Share Capital.

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How to start a business in Dubai

You don’t need the fortune to create a successful business with the success of low-budget startups. It has been proved. Company formation in UAE can be launched on budget, and shouldn’t be undone by prohibitive levels of investment. So it is crucial to use accurate planning. Starting a Business in Dubai is a progressive decision as well as a challenging one. Since Dubai has shown its stability in economics in the International market, business investors have been attracted to Dubai.

Starting a business in Dubai takes eight days on average. Current market trends in Dubai have plenty of opportunities for foreign investors who tap into imports and export of commodities. They take advantage of the growing tourist traffic of the city for an almost unlimited number of potential clients and customers. You need to be pretty much aware of the facts associated with a business startup in Dubai. It will help you to avoid the problems that are supposed to happen while launching a profitable enterprise in the United Arab Emirates [UAE].
It wouldn’t take more than a week to start your business in Dubai if you have sorted out all your legal procedures. The kind of license you require for your business depends on the type of your business. Your operations will be defined on the basis of commercial, professional or industrial licenses. But there are exceptional cases where you require approvals from Governmental departments. It includes food trading, jewelry trade, veterinary activities, and legal consultancy. In Dubai, the Department of Economic Development (DED) has a list of over 2100 activities you can choose from. You can contact the DED, if you’re unable to find your specific one from it. Each and every free zone has its own regulations and approval formalities.

Most of us have an eye on 100 percent ownership of our company. If that is what you are looking for you need to opt for a license and location in one of the many free zones of the UAE. There are specific kinds of activities in every free zone. Clarify it in the first step, so it will help you find your best option. You don’t feel lack of choice since there are over 45 free zones in the UAE with plenty of categories of operations. And still, if you are in need of a local license or you need to operate locally, you have to approach the Department of Economic Development (DED) to get the license. The DED license comes with certain restrictions on the share of ownership for foreigners.

company formation in dubai

The rules regarding the make-up of your firm depend on the location and type of business you choose. For example, if you plan on a legal consultancy firm, it can be done only as a branch of the company or as a stand-alone company. This activity should not be taken up by a sole proprietor. Alike, Each and every free zone has its own regulations and approval formalities; it has its own restrictions regarding the company structure as well. You can look these up on the official website of a free zone or the DED. We suggest you for detailed research and study before you move on to your startup.

One of the important parts of the legal procedure is your Trade name. Unless it is a branch of another company, the company name should ideally and clearly indicate the nature of your business or startup. All the rules regarding trade names can be also seen on the official website of DED.
In the Memorandum of Association of your proposed company Minimum share capital is usually set out. In most of the cases, during the time of setting up you do not need to pay minimum capital.
Once you are done with your legal procedures and forms ready to go, half of your procedures are done. The next move you better do is to it filter some offices with costs and other details. This would show you a crystal clear path forward. Find premises suitable to your requirements along with help to set up electricity, internet, water, and other amenities aren’t a difficult task in the free zone since; you will get the right assistance at the free zone.
Before your registration is approved, you need to hire a manager to oversee operations and have him ready to be on board. This is how it is usually in most legal forms of the DED, but in some other cases, you may not be allowed to hire at all. For example, Intelaq license holders (license for home-based Emirati business owners) are not allowed to hire staff but can engage contractors. Regarding the structure of a business, each free zone has its own specific regulations.

It is mandatory to have a local agent, partner or sponsor for DED Licenses since this is great support for foreign nationals. Having a local contact can help take the business forward effectively for free zones. However, this is not mandatory. Dubai as a business destination boasts easy set-up for all businessmen regardless of nationality and Dubai is a strong platform for all the enthusiastic entrepreneurs out there.

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