Business License Cost in Dubai: Navigating Legal Requirements

But like anywhere, Dubai has legal requirements for all businesses operating in the region, including rules and regulations, licenses that need to be acquired, and all manner of industry-specific laws that you'll need to follow to trade legally in the UAE. Opening your business brings with it a long to-do list, but nothing on that list, from finding premises to sourcing your staff and stock, is quite as essential as getting all of these legal licenses, certificates, and learning the laws.

But don't worry! In this blog, we'll go over everything you need to get your business off to a good (and legal) start in Dubai, UAE. We'll cover:

• Why business licenses in Dubai are so important
• How to know if you need a business license
• What licenses and certificates you need to trade
• How you can get your licenses
• What you need to get a business license
• How much your business license costs
• Industry-specific rules and regulations for retail and hospitality
• What else you might need when opening a small business in Dubai

It may feel like there's a lot to take in, but we've got you covered. 

Why business licenses in Dubai are so important

Business licenses are how states and customers can vet potential entrepreneurs to maintain safety, quality, and legitimacy in businesses across their society. A business license is like having the seal of approval from the government so that your partners, customers, and anyone looking into who you are can see and immediately know that you operate to a certain standard and in line with the law.

Business licenses are often specific to certain industries, and depending on the kind of business you are beginning, you may need to demonstrate different competencies, show certain qualifications and certifications, and show that your business is prepared to operate in accordance with different laws.

For example, to get a trade license in Dubai to open a restaurant, you'll need to show you understand food hygiene law. Retailers will not necessarily have the same requirements.

Having a business license in Dubai is a vital way to legitimise your business and is a legal requirement.

Do I need a business license?

In many countries, whether or not you need a business license depends on the type of trade you're in, the amount of trade you'll be conducting, or other specifics of your business activities.

For instance, in the US, all brick-and-mortar businesses need a business license, as well as anyone who sells goods (this requires a seller's permit), and many service providers will need a business license due to regulations. Anyone that sells products like food and tobacco or offers services like medical care, child care or trade services such as electricians all need business licenses in the USA. These show they are in line with state regulations (though, it being the US, there can be variety across state lines).

The United Arab Emirates, however, does not discriminate based on the company. All companies in the UAE require business licenses, which means if you plan to trade in Dubai in any capacity, you will need to obtain the business license offered by the Department of Economic Development (DED).

What licenses and certificates do you need to trade?

The administrative difficulty of starting your company can feel like an unnecessary worry when you have so many other things to be doing. Setting up a business is a very labour-intensive process, and forgetting to apply for the right licenses could be an understandable mistake. This simple mistake, however, could prevent you from opening. With this in mind, which licenses do you need for business in the UAE?

The three types of business licenses in Dubai

• Commercial permits -  A commercial permit is relevant if your business model involves selling products to the public on any scale. If you have limited involvement in the handling and production of your wares and your business has a retail setup, this is the business license to get you started.
• Professional certification -  A business setup that involves you providing a service, perhaps one that utilises special skills you have, such as plumbing, gardening, performing, etc., will need professional certification. This certifies you to perform service duties as a professional in the UAE.
• Industrial permit -  If you produce the goods you sell on an industrial level, i.e. as manufacturing materials (which goes beyond mixing and preparing ingredients), you may need to obtain an industrial permit alongside or instead of a professional certification.

What else do you need to apply for?

• Request for initial approval - Before getting your business license, you can apply for initial approval for your business. The helps you obtain premises (if you need them) before your trade license is approved. It also registers the number of company partners or owners involved in the business and is also useful if you need to deal with certain authorities to do with other certifications, such as the Health Authority.
• Request to book a trade name - Booking a trade name reserves the name of your business solely for you and certifies that name so you can use it when making contracts and deals during the setup of your business. The Department of Economic Development states that booking a trade name and obtaining initial approval can be performed in either order.

The free zones of the UAE

A free zone is a sub-division of the UAE that has its own regulations within the UAE. When registering your company, you will have a choice whether to get your license to trade across the country as a whole or within one of the specific free zones, which will limit your sphere of operation, but might potentially bring tax benefits and make ownership simpler if you're not based in Dubai full-time.

Examples of UAE free zones include the Dubai Airport Free Zone (DAFZA) and the Jebel Ali Free Zone (JAFZA).

How you can get your licenses

The most straightforward way to obtain the licenses you need to run your business is to go directly to the DED, the state issuer of the licenses. Their website provides instructions you can follow and tells you what you need each license for, as well as providing support and additional information to help you with the process.

Given that the trade license you'll need will come with an expense and requires renewal, you won't want to get your license immediately when beginning the process of opening your business. It's therefore advisable to use the initial approval and name registration to begin making deals with suppliers, utility providers, before moving forward with the DED trade license application.

What you need to get a business license

When applying for your business license, you'll want to ensure you have everything you need so that your application goes through successfully. Here are the documents you can expect to need for your application:

• A completed business license application 
• Passports for each partner in the business
• Official evidence of the company name and the registration letter
• Certificates issued by any relevant regulatory bodies, such as the Health Authority or Dubai’s Municipal Food and Safety Authority’s Planning Department (you'll need to do some research specific to your trade to confirm which certificates you'll need)

In some cases, this may mean making further applications in advance for other forms of documentation. For instance, if you're a UAE national, you may not have a passport to hand. Alternatively, you might not have registered the company name yet and will need to do that before sending off your business license application.

How much your business license costs

Estimating the cost of opening your business in Dubai, UAE, is a vital part of your projections. An accurate estimate can lead to a smooth first year where you stay within budget until the money starts coming in, but that's no small feat.

So how much does a trade or business license cost in Dubai? How can you incorporate that expense into your forecasts? Well, thankfully, by going to the DED website [1], you can find an accurate quote directly from the source. This is better than going to third-party sources as you can find a wide variety of estimations across the internet, some of which are high enough that, if they were accurate, nobody in Dubai would be able to trade profitably.

But don't be put off, and don't take those wildly excessive quotes too seriously. While different trades might have slightly different expenses, with a few extra certificates needed to qualify for a trade license, the license itself should cost you around AED 600, depending on the specific license you require. If you want this confirmed, you can check on the DED website directly and even contact them using the information on the website to get any remaining questions you have about how much licenses will cost, which ones you'll need, or how you can get them.

What else you might need when opening a small business in Dubai

Staying organised when starting (and running) a business in Dubai or anywhere else isn't easy! Forgetting to do one job in several dozen can lead to the whole system falling apart.

So what steps can you follow to make sure you get everything you need to start out smoothly in business?

• Make a business plan - Putting together a business plan is an excellent way to avoid forgetting important steps as you get ready to trade, and as you look to make progress once opening. The organisational value of a business plan makes it the first thing you need to put together as it helps you with everything that comes afterwards. Your business plan can let you know when to apply for the right licenses, even as you work on everything else. It contains the concept of your business, your plans for finding premises, your target customers, marketing and finance details and more.
• Suppliers - If you're new to Dubai or have never run a business before, you may need to form new relationships with suppliers, who are a vital part of your operation, providing you with the products you need to sell to your customers. Don't settle for the first supplier you find that has the products you're looking for. Be sure to shop around for the best deals, and for suppliers that you think you can work with reliably in the long-term.
• Finding premises - Finding the right location for your business is worth tens or even hundreds of thousands of dollars every year. These days, that doesn't just mean brick and mortar; you also have to choose whether to build a website and offer ecommerce or, in the case of hospitality, delivery and online ordering options. Think carefully and research the Dubai market thoroughly before committing to your premises. Researching the free zones will be a good place to start with this, as they offer unique opportunities for UAE-based business.
• A top-of-the-range POS system - A point of sale (POS) system is an electronic device that processes sales, links with your card machine, and monitors your staff and stock while generating valuable reports you can use to make better business decisions. You'll rely on your POS as much as you do your staff, which makes choosing your POS system and setting it up to suit your unique business needs an essential part of getting started!

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• Maintain complex inventory needs with low-stock alerts on all stock down to ingredient, size, and colour level so you never have to lose a sale.
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• Have fewer headaches when you grow by using a POS system that grows alongside your business. Add more locations, more systems, and all the staff and stock you need on a cloud-based platform that gives you more options!

Get in touch with our team of experts by submitting your details below and get your Dubai business journey off to the best possible start with an Epos Now system!

Liked this blog? Take a look at some of our other resources and learn more about trading in the UAE.