The commercial license is popular in Dubai for several reasons. Trading goods and services is less expensive and time-consuming than manufacturing them from scratch and providing them to wholesalers for subsequent sales.
To help guide you with your business setup in Dubai, we have looked at the different types of licenses available in Dubai, particularly the commercial license. By the end of this post, you will have a thorough understanding of the commercial license in Dubai.
- What is a Commercial Licence in Dubai?
- Activities Under Commercial License
- Steps to Get Your Commercial License in Dubai
- Documents Required for a Commercial Licence in Dubai
- Cost of Commercial Licence in Dubai
- Benefits of Having a Commercial Licence in Dubai
- Types of Company Licenses in Dubai, UAE
- Differences Between Professional and Commercial Licence in Dubai
- Why Start a Small Company in Meydan Free Zone?
What is a Commercial Licence in Dubai?
All Dubai-based businesses must have a license. You need a commercial license to purchase and sell products and services in Dubai.
In the most basic terms, a commercial license permits you to deal in products and provide specified services. You can import and sell items in the UAE, export them outside the country, or trade within the local market. The commercial license allows you to sell everything from toys and food to packaging and electronics as long as you meet the requirements. A commercial license also covers services such as brokerage and real estate.
Activities under commercial license
The Department of Economic Development (DED) approves various business activities under a commercial license. You can get the complete list of business activities allowed from the DED or Meydan Free Zone. Below are a few examples of commercial activities authorized in Dubai:
- Advertising services
- Automobile trading
- Beauty and baby care essentials
- Building maintenance services
- Cleaning services
- Cold storage
- Exchange and financial services
- Filling stations
- Flowers and plants trading
- General store
- General warehousing
- Home appliances trading
- Import and export
- Plumbing and sanitary contracting
- Radio, TV station, cinema theater equipment installation, and maintenance
- Rental services
- Restaurant management
- Self-storage services
- Surveillance services
Steps to Get Your Commercial License in Dubai
Getting a commercial license in Dubai is straightforward if you work with an experienced company formation establishment like Meydan Free Zone. Here are the four most important steps you need to take to get a commercial license for your company.
Step 1: Determine the business activity
To start a business and get a license, you must first decide what you want to do. You may choose from over 2,000 business activities, including those in the industrial, commercial, professional, and tourist sectors. You can view the complete list on the DED website. Additionally, Meydan Free Zone can help you decide what kind of business you should start for your new company. Depending on the nature of your business, you may require additional permits.
Step 2: Select a location – free zone or mainland
If you want to start a company in the UAE, one of the most crucial decisions you will have to make is where you want to locate it – in a free zone or the mainland. Both have several benefits.
Some free zones, like the Meydan Free Zone, offer benefits like quick and easy incorporation, financial incentives such as tax exemptions and no currency limits, and ongoing business support. There are several kinds of free zone licenses available.
On the mainland, you can also get a variety of licenses. Businesses on the mainland may deal directly with the UAE market and win lucrative government contracts. The appropriate jurisdiction for you will depend on the nature of your business.
Step 3: Choose your company name
Choosing a name for your business is critical in setting up a business in Dubai. In most cases, a business’s name should represent what it does unless it is a subsidiary of another firm.
The UAE has stringent name regulations, and you must abide by them. Avoid using any words that might be disrespectful or profane. Avoid well-known corporate names and abbreviations when naming your firm after yourself. You also need to ensure that the name you want to use is available for registration.
Step 4: File your license application
After deciding on the name, activity, and site of operation, submit all the papers to DED for review. Company formation and licenses happen at the same time. The nature of your company and its activities dictates whether you can receive all the approvals you need from DED.
Once the relevant authorities have authorized your company’s activity, you can apply for a Memorandum of Association, an Incorporation Certificate, and other legal papers. After approval, you may also apply for visas, tenancy agreements, and labor cards.
Documents Required for a Commercial Licence in Dubai
The documentation process of applying for a commercial licence in Dubai requires an articulate way of handling deadlines and paperwork. Here’s a list of the necessary documents for registration of a commercial licence in Dubai.
- Application form with the company name in English and Arabic
- Original leasing contract for registered office
- Permission from Dubai Municipality’s Building Department to use the office as a business address
- DED’s letter of approval for the company name
- Proof of payment for a trade licence
- Passport-sized colour pictures of the applicant
- A No Objection certificate
- Letter of intent
- Comprehensive business plan
- Details of shared capital
- Reference certificates of financial statements
- Notarized copy of Registry Identification form
Cost of Commercial Licence In Dubai
Based on a set of criteria, the approximate cost of a commercial licence in Dubai can vary. Costs can range from visa fees, residence fees, transport fees, trademark registration fees, and fees that are incurred when handling documentation and government authorities. Generally, a commercial licence in Dubai costs from AED 10,000 to AED 50,000. With Meydan’s business setup calculator, you can expect a more accurate estimate of the cost of registering your business using a cost effective commercial licence.
Benefits of Having a Commercial Licence in Dubai
With commercial licences being widespread in Dubai, there’s quite a lot of benefits you would encounter once you obtain the licence.
Like mentioned earlier, you can perform up to ten activities under one commercial licence that you own. This allows you to scroll through different options that operate in the region and pick what benefits you and your business the best. You can bundle on several business activities that are similar to each other, all under one licence. For example, warehousing, storage, and shipping can be utilised in combination to support an import-export business.
Meydan Free Zone allows you to choose from over 2000 business activities spread across industrial, commercial, professional and other sectors.
- Cost- effective
Dubai has a vast amount of mainland and free zones that will aid you in cutting down your registration and set up costs. If you choose an economic jurisdiction like Meydan Free Zone, your commercial licence can be obtained with 100% of personal and corporate tax being excluded. The renewal of your commercial trade licence also incurs a lower cost in the UAE.
In terms of opening up bank accounts or going through processes of registration, safety can be guaranteed with Dubai authorities. Also, a new business can expect active engagement on their queries about visa, bank account setup and company management.
Types of Company Licenses in Dubai, UAE
Let’s take a look at the other types of trade licenses available under the DED:
- Professional License :
The DED issues a professional license to service-oriented businesses that generate revenue from their services. Among the many companies in this category are consultancies, management services, educational and training services, and technical services such as hair salons and spas.
- Industrial License :
Industrial activities include developing and manufacturing new items from natural or artificial raw materials. A few examples are the production of fiberglass items, food industries, textiles, and the fabrication of equipment and engines, to name a few. This license also stipulates that organizations applying for it must have a locally based physical warehouse.
- Tourism License :
Tourism-related enterprises require a tourist trade license. This sector includes hotel apartment rentals, vacation home rentals, travel agencies, outward and inbound tour operators, and maritime excursions.
Differences Between Professional And Commercial Licence In Dubai
There are significant differences between professional and commercial licences which are the most sought out business licences in Dubai. Here are some of the focal points you should be aware of to note the difference between commercial and professional licence in Dubai.
With a professional licence, you are required to possess a unique skill set that can be employed in services like consultancy, artisanship, medical services and more. It covers any business activity that involves the provision of a service or advice. You are able to make use of appropriate knowledge and expertise in order to ensure quality and boost business performance.
As for a commercial licence, trade is the centre point of the activities you undertake. Any good or service that’s tangible can be included under a commercial licence. You can access activities like supplying vehicle parts, renting houses, software trading, and development.
Professional licence holders can have 100% ownership whilst inheriting all shares of the business. On the other hand, an investor holding a commercial licence can own 49% of shares and the remaining 51% will be owned by a local agent in the UAE mainland. Although, if you decide to set up your business in a free zone area like Meydan, receiving 100% ownership of the business would not be a problem.
The liabilities of companies that hold commercial and professional licences have certain distinctions. For instance, a professional licence holder has unlimited liability unless it’s decided that the company wants to be deemed as a limited liability company. On the contrary, a company that has a commercial licence will always hold limited liability.
Why Start a Small Company in Meydan Free Zone??
Located in The Meydan Hotel, the Meydan Free Zone has quick access to Downtown Dubai, Dubai Media City, and Sheikh Zayed Road and is 15 minutes from Dubai International Airport. Additionally, a prestigious business address can help attract top-of-the-line clients.
As a member of the Meydan Free Zone family, you also get access to a fully equipped Business Centre and monthly networking events. Our Business Center has a world-class professional environment and an ambience that inspires performance and provides privacy.
At Meydan Free Zone, our advisors can guide you through every stage of your business setup in Dubai.