How to Get a Business License in Dubai: A Step-by-Step Guide

For many new businesses, Dubai seems like a land of milk and honey, where profit and prosperity springs from the desert overnight. In some ways, this is a fair assessment. Dubai is a world-renowned destination, with a diverse population and dynamic economy. The UAE government is also keen to attract new businesses and offers many incentives to entrepreneurs.

With this in mind, you've decided to start your own business in the UAE. That's great; as a champion of small businesses, Epos Now always admires the gumption of the entrepreneurial spirit. But before we get too ahead of ourselves, there are a few administrative hoops to jump.

Securing a trade license is one of the admin tasks you'll have to take care of before you start a business in Dubai. A trade license in Dubai is an essential document for new businesses, and you will need to get it before you can start trading.

It's easy to get overwhelmed with admin before you open your business, but don't worry, we're here to help. In this blog, we'll go through the ins and outs of the bureaucracy you'll deal with and how you can get your trade license in Dubai, UAE.

What is a trade license in Dubai?

In the UAE, a trade license is an official document allowing businesses to trade there. The Department of Economic Development issues it and shows that the business has met all relevant guidelines and regulations in the UAE.

The interesting thing about attaining a trade license in Dubai is that the city operates its own "free zone". This means that while Dubai is part of the UAE, it operates its own economic trading zone. There are two different types of business structures in the UAE: mainland and free zone licenses.

You can operate worldwide and anywhere in the UAE if your business has a mainland license. These businesses are 100% operated by their owners but require a UAE sponsor. Generally, these licenses are intended for international businesses and corporations and are monitored directly by the Department of Economic Development.

Free zone licenses are for businesses operating in the special Dubai economic free zone. These businesses are 100% foreign-owned and are overseen by independent authorities. Free zone businesses are only allowed to operate within the free zone and outside the UAE.

When you apply for your trade license, choosing the right one is very important. If you're planning to open a business in Dubai, make sure that you apply for a free zone trade license. Applying for a mainland trade license may bar you from operating in Dubai.

What types of trade licenses are available in Dubai, UAE

There are four main types of trade licenses in Dubai: a commercial trade license, a professional trade license, an industrial trade license, and a tourism trade license. These licenses depend on your industry and dictate what kind of business activities you'll be able to carry out. Your trade license in the UAE may also show what trade authority you'll answer to.

The four main trade licenses in Dubai are:

• Commercial trade license - This Dubai trade license is for businesses that are involved with buying and selling products. Export and import companies, rental companies, and brokerage businesses will benefit from this license.
• Professional trade license - This license is for individuals and businesses that sell their services to to the public or other businesses. Businesses with a professional trade license can also sell their services to the government via lucrative official contracts. A professional trade license is best for healthcare businesses, consultancy companies, and marketing agencies.
• Industrial trade license - Industrial licenses are for businesses involved in manufacturing in Dubai. These licenses are only available to businesses with a physical office in Dubai. While there are many different types of manufacturing businesses, the license generally covers importing and processing raw materials, packaging and selling finished products, as well as exporting products.
• Tourism trade license - If you’re a tour operator or a similar tourist-based business, you’ll need the newest license available. The tourism trade license covers businesses that handle tours in Dubai and the UAE. Businesses such as travel agencies or tourism hospitality businesses will need to get a tourism trade license.

How do I get a trade license in Dubai, UAE?

Thanks to the business-friendly Department of Economic Development, obtaining a trade license in Dubai is relatively simple. The process should be quick and easy as long as you have all the right documents required to get a trade license. In the next section, we'll give you a step-by-step guide on how to get your license.

Write a business plan

A well-thought-out and considered business plan is one of the most important parts of getting a trade license and starting your business. It defines your mission, your business activities, and everything that sets your company apart from your competition. Before you apply for a trade license in Dubai, you must ensure your business plan covers all your bases.

Your business plan should consist of the following sections:

• A cover page - This is a basic page that includes your company name, your name and the names of your business partners, your contact information, and your logo. There are certain business name regulations in Dubai, such as banning vulgarity, so make sure your name meets the rules.
• Executive summary and business concept - This section covers the introduction of your company concept, a summary of your business activities, and how you'll achieve your goals.
• Market analysis - As a business owner, knowing what's going on in your industry is important. Your market analysis section covers industry trends, your competitors, and target market research.
• Business structure - Operating in the Dubai free zone requires you to define your business structure to the relevant authorities. List your structure here, including any partners and local sponsors. Some trade licenses require you to have a physical office in Dubai, so make sure to list that here if it is relevant.
• Financials - Your financial section outlines your financial plans, sales forecasts, income statements, balance sheets, and future projections. This is one of the most important sections of your business plan, so it may be worth commissioning an outside consultant to ensure all your information here is in order.

While they're not essential to the document, you may also include sections on your marketing plan, PR strategy, and your branding. The more information you include, the better prepared you'll be when you start your business!

Define your business structure

The structure of your business defines how you'll conduct your business and where it will be able to operate. This means you'll have to decide whether you'll be a free zone or mainland company, who is liable for the business, and what authority you'll answer to.

While this is a big decision and will affect all aspects of your company, it is a series of relatively simple choices. Take a deep look at your plans with your partners and sponsors (if you have any) and run through the pros and cons of each structure. The answer will surely present itself to you.

Fill out your application form

You will receive an application form once you apply to the relevant authorities for a trade license in Dubai. This is an exciting part of starting your business, as this is the point in the process where things start to get real. Make sure you get this part right!

Generally, your form will require all your business information and some details about your business activities. There are different forms for different licenses, but most authorities only allow you to define ten business activities. If you're unsure how to complete the application form correctly, you can hire a consultant to help you through the process.

Congratulations, you're firmly on your way to getting your business license in Dubai!

Secure additional approvals

Depending on your industry and the business activities you plan to carry out, you may need to get additional approvals or licenses on top of your trade license application. While additional costs may be associated with these approvals (again, this will depend on your industry and business activities), they're very much worth it as your application may be denied without them.

Provide additional documentation

Like the above section, you may need to provide additional documentation along with your Dubai trade license application. These will generally include passports of relevant partners and owners, right-to-work documents, and proof of residency documents.

Don't worry about not knowing what documents you'll need to provide as you will be told what's needed before you send off your application.

Choose your business location

Location is everything, as they say, and this is true even when it comes to your application. Most authorities prefer businesses to have a physical location in Dubai and some trade licenses (listed above) require them as part of the application.

The city is your oyster when it comes to choosing a location in Dubai. The city is full of premium locations that can fit the needs of almost any business. Make sure you take the time to secure a location that meets your needs and best serves the business. Consider your target market and how your customers will find you.

Submit your application

Once you have all your documentation in order and you've sealed the deal on a business location, it's finally time to submit your trade license application! As long as you've followed all the guidelines and used our tips, you should receive your license once your application has been approved.

You only need to pay your licensing fees when your application has been approved. With that out of the way, it's time to open up your business and start trading!

The cost of a trade license

There is a business license cost in Dubai that you can expect to pay. These fees usually won't break the bank, but it is still important to consider them in your overall budget. This will help you stay on target and ensure that everything is covered as you open your new business.

A number of different factors determine the fees you will pay as a business in Dubai. These factors include:

• The number of business partners
• The location of the business
• Your business structure
• Partnerships with local sponsors
• Your business activities

Considering these factors, a trade license in Dubai will generally cost between 15,000-50,000 AED. Your license fees will also depend on whether you are a free zone or a mainland business.

There are also the costs of outfitting your business with equipment to consider. One of the best purchases you can make for your business is a point of sale (POS) system from Epos Now. We offer both retail POS and hospitality POS systems designed to make entrepreneurs' lives easier. With our POS systems, you can use advanced management features, access a suite of award-winning apps, and streamline your processes.

Get started in Dubai

Dubai is a fantastic place to open a business. With its strategic location and varied population, you can open up your business to the world. With your brand new business license in hand, the possibilities are truly endless.

We wish you the best on your new entrepreneurial journey and we look forward to serving your business in the future.