How to Get a Dubai Trade License: Process & Costs
Setting up a business in the United Arab Emirates (UAE) is an attractive opportunity for entrepreneurs due to its strategic location, business-friendly policies, and tax advantages. One of the most crucial steps in this process is obtaining a trade license, which grants legal permission to conduct business within the UAE. This comprehensive guide covers everything you need to know about trade licenses in the UAE, including types, requirements, the application process, and the costs involved.
What is a Trade License in the UAE?
A trade license in the UAE is an official permit issued by the relevant authorities that allows businesses to operate legally within the region. The Department of Economic Development (DED) is the primary authority that grants trade licenses for businesses operating on the mainland, while Free Zone authorities regulate licenses for businesses in specific Free Zones.
Types of Trade Licenses in Dubai and UAE
The UAE offers various types of trade licenses based on the nature of business activities. The primary categories include:
1. Commercial License
A commercial trade license is required for businesses engaged in trading, buying, and selling goods, including general trading and specialized trading activities such as electronics, automobile parts, or food items. A commercial license costs approximately AED 12,000 and can go up depending on additional requirements and approvals.
2. Professional License
A professional trade license is issued to individuals or companies providing specialized services, such as consulting, legal services, accounting, marketing, IT services, and artisans. The cost for a professional license starts at around AED 10,000 and varies based on the type of professional service.
3. Industrial License
An industrial trade license is necessary for businesses engaged in manufacturing, production, or industrial activities. The cost of an industrial license typically starts at AED 15,000, with additional fees depending on the size and type of the industrial setup.
4. Tourism License
A tourism license is mandatory for businesses in the travel, hospitality, and tourism industry. The cost for a tourism license starts from AED 15,000 and varies depending on the business model and required permits.
5. E-commerce License
With the rise of online businesses, the UAE has introduced e-commerce licenses to regulate online selling platforms, dropshipping businesses, and digital marketplaces. The cost for an e-commerce license starts at AED 5,500, making it one of the most affordable options for new entrepreneurs.
Mainland vs. Free Zone Trade Licenses
Entrepreneurs in the UAE can choose between two primary jurisdictions for obtaining a trade license:
Mainland and Free Zones.
Mainland Trade License
A mainland trade license is issued by the Department of Economic Development (DED) of the respective emirate. Businesses with this license can operate across the UAE and internationally.
Key features:
• Can conduct business anywhere in the UAE and beyond.
• Requires a physical office space.
• In certain sectors, full foreign ownership is allowed.
• More expensive than Free Zone licenses but offers greater flexibility.
• Cost: Starting from AED 14,500, excluding additional fees for office space, visas, and approvals.
Free Zone Trade License
Free Zone trade licenses are issued by Free Zone authorities and allow businesses to operate within designated Free Zones. Free Zones are areas with their own regulatory framework and offer benefits like tax exemptions and full foreign ownership.
Key features:
• 100% foreign ownership.
• No corporate or personal income tax.
• Businesses can only operate within the Free Zone or internationally unless a local distributor is appointed.
• Lower setup costs compared to mainland businesses.
• Cost: Starting from AED 12,500, with additional costs based on office space and visa requirements.
Cost of Acquiring a Trade License in the UAE
The cost of obtaining a trade license in the UAE varies based on several factors, including the type of business activity, jurisdiction (Mainland or Free Zone), office space requirements, and additional approvals needed. Below is a detailed breakdown of the key cost components involved in the process.
1. Trade License Registration Fee
The trade license registration fee is the primary cost for setting up a business in the UAE. The cost depends on the jurisdiction and business activity:
• Mainland Trade License: Issued by the Department of Economic Development (DED) in the respective emirate, with prices generally starting at AED 5,000 and varying based on the activity and additional services.
• Free Zone Trade License: Fees vary among Free Zones, with licenses typically ranging from AED 5,500 to AED 15,000. Some Free Zones offer startup packages or installment plans.
2. Office Space Rent
Renting an office is a mandatory requirement for Mainland businesses and certain Free Zones. The cost depends on the size, location, and type of office space:
• Mainland Business Offices: Must lease physical office space, and costs typically range between AED 10,000 to AED 50,000 per year, depending on the location (e.g., Dubai, Abu Dhabi, or Sharjah).
• Free Zone Office Options: Some Free Zones allow businesses to operate with a flexi-desk (shared office or virtual office), which can cost between AED 5,000 to AED 15,000 per year, while larger office spaces may cost more.
3. Visa Costs
Business owners, partners, and employees require UAE residence visas, which involve multiple steps and costs:
• Investor/Partner Visa: AED 3,500 to AED 7,000 per visa.
• Employment Visa: AED 3,000 to AED 6,000 per employee, depending on the Free Zone or Mainland regulations.
• Medical Tests & Emirates ID: An additional cost of AED 1,000 to AED 2,000 per visa.
• Some Free Zones provide visa packages with a specific number of visas included in the business setup cost.
4. Trade Name Registration
Businesses must register a unique trade name that complies with UAE regulations. The cost varies based on the type of trade name:
• Standard trade name: AED 620
• Trade name with foreign words or special requests: AED 1,000 to AED 2,000
• Premium or trademarked trade names: Higher fees apply.
5. Approvals & Documentation Costs
Certain business activities require additional approvals from government entities, which add to the overall setup cost:
• Dubai Municipality Approval – Required for food, retail, and construction-related businesses (AED 2,000 – AED 5,000).
• Ministry of Health & Prevention (MOHAP) Approval – For healthcare-related businesses (AED 3,000 – AED 7,000).
• Civil Defense Approval – For businesses involving public spaces, safety, and hazardous materials (AED 2,000 – AED 4,000).
• External Government Approvals – If a business deals with import/export, finance, or education, additional approvals may be required from Dubai Customs, the Securities and Commodities Authority (SCA), or the Knowledge and Human Development Authority (KHDA), ranging from AED 1,500 to AED 5,000.
6. Local Sponsor or Service Agent Fees (for Mainland Businesses)
For certain business structures in the Mainland (such as Civil Companies or Professional Licenses), businesses must appoint a local service agent (UAE national).
• Local sponsor fees typically range between AED 5,000 to AED 25,000 per year, depending on the agreement and business type.
7. Additional Costs to Consider
Apart from the major expenses, businesses may also need to budget for:
• Company Stamp & Business Cards: AED 200 – AED 500
• Notarization & Legalization of Documents: AED 1,000 – AED 3,000
• Corporate Bank Account Setup: Some banks require a minimum balance of AED 10,000 to AED 50,000.
Estimated Total Cost Breakdown
The total cost to obtain a trade license in the UAE depends on several factors. Below is a general estimate:
Expense Category Estimated Cost (AED)
Trade License Registration 5,000 – 15,000
Office Space Rent 10,000 – 50,000
Visa Costs (per person) 3,000 – 7,000
Trade Name Registration 620 – 2,000
Additional Approvals 2,000 – 7,000
Local Sponsor Fees (if needed) 5,000 – 25,000
Other Documentation Fees 2,000 – 5,000
Conclusion
The cost of acquiring a trade license in the UAE varies based on business activity, jurisdiction, and operational requirements. Free Zones generally have lower startup costs with flexible packages, while Mainland businesses have higher office rent and sponsorship fees. Entrepreneurs should carefully evaluate their business needs before choosing the right setup option.
The process of obtaining a trade license in the UAE:
1. Determine the Business Activity
The first step in obtaining a trade license in the UAE is selecting the type of business activity you wish to engage in. The UAE classifies businesses under different categories such as:
• Commercial License – For businesses involved in trading activities (e.g., import/export, retail, general trading).
• Professional License – For individuals or firms offering services (e.g., consultancy, legal, IT services).
• Industrial License – For businesses involved in manufacturing or production.
Specific authorities regulate each activity, and some require additional approvals from government bodies.
2. Select a Jurisdiction
Businesses in the UAE can be set up in two main jurisdictions:
• Mainland (Onshore) – Companies registered with the Department of Economic Development (DED) can conduct business within the UAE and internationally. Mainland companies require a local service agent for certain activities if the business is owned by a foreigner.
• Free Zone – Setting up in a Free Zone allows 100% foreign ownership, tax benefits, and business-friendly regulations. However, Free Zone companies are restricted from directly trading within the UAE market unless they partner with a local distributor.
Choosing the right jurisdiction depends on business objectives, ownership preferences, and operational requirements.
3. Register the Trade Name
The trade name is an essential part of the business identity. It should be unique and comply with UAE naming regulations. The process involves:
• Submitting the trade name application to the DED (for Mainland) or the relevant Free Zone authority.
• Ensuring the name does not violate any religious, political, or moral guidelines.
• Avoiding names already registered by other businesses.
Once approved, the trade name is reserved for the business.
4. Apply for Initial Approval
Before proceeding with registration, businesses must obtain initial approval from the authorities, which confirms that the UAE government has no objection to establishing the business.
This step requires submitting:
• A copy of the business owner’s passport.
• The trade name reservation certificate.
• A business activity description.
Additional approvals may be required for specific sectors like healthcare, education, or financial services.
5. Lease Office Space
Depending on the jurisdiction and business type, a company must secure office space.
• Mainland companies require a physical office or warehouse.
• Free Zone businesses may opt for a flexi-desk, shared workspace, or a virtual office in some cases.
A tenancy contract and an Ejari (for Mainland businesses) or a lease agreement (for Free Zones) must be submitted for licensing.
6. Submit Legal Documents
The business must submit legal documentation, which typically includes:
• Memorandum of Association (MOA) – Defines the business structure, ownership, and responsibilities of shareholders.
• Lease agreement – Proof of business location.
• Approvals from relevant authorities – If required for specific industries.
Legal documents must be notarized and attested where necessary.
7. Pay the Fees & Obtain the License
Once all documents are submitted and approved, the final step is to pay the required government fees.
• Fees vary depending on the jurisdiction, business activity, and office space.
• Upon payment, the business receives the official Trade License, allowing it to operate legally in the UAE.
8. Apply for Visas
After obtaining the trade license, businesses can apply for visas for owners, partners, and employees.
• Entrepreneurs can apply for an Investor Visa or Employment Visas for staff.
• Free Zones and Mainland authorities have different visa quota allocations.
• Visa processing includes a medical test, Emirates ID application, and residency stamping.
9. Open a Business Bank Account
With the trade license and visa in place, businesses must open a corporate bank account for financial transactions.
• Banks require a valid trade license, MOA, lease agreement, and shareholder details.
• Businesses should choose a bank that aligns with their needs, considering factors like minimum deposit requirements, international transaction ease, and digital banking facilities.
Conclusion
Obtaining a trade license in the UAE is a straightforward process when approached with proper planning. The jurisdiction, business type, and regulatory requirements influence the setup process. Entrepreneurs must ensure compliance with UAE regulations and seek professional assistance if needed.
Renewal & Compliance Requirements
A UAE trade license must be renewed annually. Failure to renew on time can result in penalties or business suspension. Key renewal requirements include:
• Valid lease agreement
• Updated approvals (if required)
• Payment of renewal fees (starting from AED 8,000 annually)
Final Thoughts
Obtaining a trade license in the UAE is a fundamental step towards establishing a successful business in the region. Entrepreneurs should carefully evaluate the type of license, jurisdiction, and cost implications before proceeding. Seeking expert advice or consulting business setup firms can ensure a seamless and compliant registration process. With the right approach, the UAE can be a highly lucrative market for ambitious business owners.
