Dubai is one of the famous places to start up a business in today’s world. Dubai benefits from a strategic location at the heart of the Middle East, perfectly placed to conduct business with every corner of the globe. Country’s state-of-the-art infrastructure make it one of the most prestigious business hubs in the world.
UAE is also home to an incredibly attractive tax regime which remains at zero percent on both personal and corporate income. Entrepreneurs from across the globe likes to rush into Dubai because of its tax-free environment, therefore, it is essential for them to know about the processes involved in setting up a business in UAE.
One of the first steps to take when launching your business in the UAE is to apply for your business license. Attaining the business license in Dubai is not at all an uphill task if you have the right assistance. For every business entity to function in the country, they require an approval from the government to start its activities which is why trade licenses issued by the Department of Economic Development (DED) are mandatory. Obtaining a trade license is the same as registering a company with the government.
There are a number of license types available to choose from. Choosing the right license type for your business is relatively important. The type of license that’s right for you will depend on the nature of your business and its activities. Trade licenses are categorized into four depending on the different types of business activities.
UAE trade license categories
As mentioned above, there are few common trade license types available in the UAE. These are the professional services license, the industrial license, general trade license, the commercial license and the tourism license.
To ascertain which license is right for you, you must first outline your business activities Your business activity must match one on a pre-published list. There are over 2,000 to choose from, covering everything from food manufacturing, imports and exports to consultancy.
- Professional services license
Professional license is a type of business license issued to individuals who are skilled in a particular profession and practice the same profession to earn revenue. Professionals licenses are also required for companies that are service-focused. A professional license is mandatory for all service-focused firms like consultancy services, accounting firms, healthcare services, professionals like teachers, lawyers and trade-oriented professions like carpentry, etc. The Department of Economic Development issues a Professional License in Dubai.
The professional trade license comes with many advantages, among which the fact that it can be obtained by sole proprietors in Dubai
- Industrial License
From name itself, an Industrial License in UAE is essential for all business establishments that undertake industry-oriented businesses in Dubai, UAE. Some of the prominent business activities that make use of Industrial License in UAE are aluminum manufacture, oil and petroleum industry, etc. The Department of Economic Development is the sole authority in charge of issuing an Industrial Trade License in UAE.
3. General Trading License
General trade license is needed by businesses in trading, exporting and importing products. Goods like electronics, furniture and food should get this license. This license permits companies to trade locally inside the UAE. Moreover, it also allows you to trade with markets across the globe. General trading licenses in UAE allow businesses to trade in mixed goods. This means that a business can export, trade and import any number of goods like toys, building materials or cosmetics.
The Department of Economic Development (DED) is a government body that offers these licenses. It serves to individuals and corporate entities who start businesses in Dubai mainland.
- Commercial License
Commercial License in UAE is mandatory for any business establishment that aims to buy or sell commodities. This license is necessary to conduct trading both in and out of the Emirates. There are many business activities that make use of a valid Commercial Trade License in the UAE. And some of the major activities are goods and commodities trading, import and export, real estate business, logistics enterprises and a lot more. The authority in charge of issuance of the Commercial License is the Department of Economic Development (DED). A commercial license for a limited liability company in Dubai is issued if the UAE national owns 51% of the business while the foreign investor owns 49%.
- Tourism License
Dubai is one of the world’s famous travel destinations. Business establishments that operate in the travel and tourism sector require a valid Tourism License in Dubai. Hotels, restaurants, travel agents require a Tourism License. The license approval is carried out by the Department of Tourism and Commerce Marketing.
Documents related to obtaining a Dubai trade license
The following documents must be presented to the Trade License and Commercial Registration Department within the DED when applying for a trade license in Dubai:
- a standard application form which must be filled out and signed by the company’s legal representative;
- the company’s statutory documents, both in original and copy;
- the DED’s letter with the approval of the company name;
- the DED’s letter attesting the approval for setting up the company;
- the tenancy agreement;
- all shareholders’ details (copies after their passports).
-One must also pay attention if any other special licenses are required.
Steps to get trade license in UAE
- Request the DED Department for original approval
- Name the category for the profession, business, commercial and industry
- Regulate all the connected business work for each business license (Almost 10 actions exist for each license)
- Prepare the business legal status in the UAE
- Get useful approvals from other suitable government authorities
- Create a name for the company
- Lease business premises and get the correct consent from the authority
- Collect all the required documents such as the memorandum of association
Read more; https://beyondnumbers.ae/importance-of-vat-in-uae