Obtaining a business license in the UAE can be an excellent way to utilize your business knowledge and conduct different business activities in one of the great centers of commerce globally. If you want to do business in the UAE and conduct trading activities, it is essential that you obtain the right business license. While the process isn’t overly complicated, you must follow the rules closely to ensure you fulfill specific criteria. Without the proper license, you will not be able to conduct your business legally and contribute to the legitimate economic development of the UAE government.
There are several different types of business licenses that you can get in the UAE. This includes:
- Commercial licenses
- Professional licenses
- Industrial licenses
- Tourism licenses
- Other types of specific professional licenses
Why Do You Need a Business License in the UAE?
There are specific legal requirements that you must fulfill to obtain a business license in the UAE. This includes:
- Determining the nature of the economic activity to be fulfilled. This will determine the type of license that needs to be sought. Licenses can include one or more business activities of which there are 2000 in the country.
- Each legal form has corresponding laws and regulations, and specific requirements that need to be fulfilled by their respective businesses. Legal forms include the following types:
- Sole Proprietorships
- Civil Companies
- Free Zone Companies
- Limited Liability Companies
- Public Joint Stock Companies
- Private Joint Stock Companies
- Branches of Foreign Companies
Applicants must apply at the Department of Economic Development of the individual Emirate (or the Free Zone Authority, depending on the type of license being sought) where they hope to conduct activities with their commercial license.
Penalties for operating without a license
As mentioned above, it is essential to get a license before you start conducting business in the country as penalties can be stiff. Fines start at AED 50,000 for first incidents and climb steadily from there. For repeated violations, fines can go as high as AED 100,000 or higher. If you become a license holder of the right license, you will be able to enjoy the benefits of doing business in the country, including security in your business and its operations. In addition, you will have greater credibility among the public, as having a license serves as a symbol that you have fulfilled the necessary requirements to conduct business legally and fairly.
Commercial License
A commercial license is one of the license types within the larger category of trade licenses. With it, you are allowed to conduct certain types of commercial activities, including retail, wholesale, and e-commerce intended for national consumption. This is the most relevant type of license for entrepreneurs who hope to conduct trade activities in the country. It allows you to operate both in the UAE and internationally. To get a commercial license in the UAE, you must first determine whether you will operate on the mainland or within a free zone. You must choose a company name, and submit the required application, along with a passport and photos. The cost varies from UAE 15,000 to 28,500 or even more, depending on your particular sphere of activity.
Professional License
Professional licenses are applicable for people who want to carry out professional services in the country. To receive a professional license, you must have the right qualifications including a professional license and a significant amount of experience in the appropriate field. Specific qualifications vary depending on the particular license being sought. There are distinct professions that qualify for professional licenses, including:
- Accountants, Auditors, and related professionals
- Professionals in advertising
- Entertainers
- Educational professionals
- Consultants
- Technical experts and IT professionals
This is an abbreviated list, but to get the full list you can look on the UAE government website. There is also a list of activities that is permissible with the professional license. This includes:
- Consultancy
- IT services
- Management and legal services
- Educational services and training activities
In terms of the ownership structure permitted with a professional license, owners can have 100% ownership of a company. Some other types of licenses only allow for partial foreign ownership. In terms of liability, companies in the UAE generally operate as Limited Liability Companies (LLCs). There are share capital requirements that align with trade license requirements and don’t need payment upfront.
Costs
The costs of getting a professional license in the country vary depending on individual circumstances. They start at AED 15,310 and can go well into the tens of thousands of AED. Costs can include the following fees:
- Fee for obtaining a professional license
- Fee for obtaining a trade name
- Fee for using a service agent
- Market fees
- Administrative fees for services given
- Legal fees
- “Cultural” fees, depending on the specialty
Renewal process
There is also a specific process that you must undergo to renew a professional license in the country, including documents required and approvals to receive. To do this, you must:
- Obtain a primary source verification (PSV) and submit the required documentation
- Submit an online application and pay fees
- Undergo a DHA review, depending on the license type
- Wait for your registration to be restored and approvals to be given. Once you get approvals, you will be renewed.
Industrial License
Industrial licenses are given to people who want to conduct industrial and manufacturing activities in the country. People should only apply for industrial licenses if they have sufficient capital to invest, and also land area on which to construct warehouses and manufacturing facilities necessary to conduct their activities. They do not apply to people who work in free zones. The list of business activities that is applicable to industrial licenses is quite extensive. It includes:
- Machinery production
- Petroleum products manufacturing
- Paper and textile manufacturing
- Raw materials processing
- Food import production
- Coating for metal products
- Steel manufacturing
Requirements
For an industrial license in particular, the list of requirements that applicants must fulfill is substantial. It includes:
- Having a physical premise, and having a trade license if items will be made for production
- Undergoing safety checks on the premises and having a regulation fire and safety unit
- Having a detailed floor plan, including safety hazards, regulation-standard electrical wiring, response management systems, and other requirements
- Including a complete business plan for each manufacturing unit
All of these requirements must be approved by the local licensing department of the Emirate in which the applicant is applying.
Cost
The cost of obtaining an industrial license in the UAE is approximately 25,000 for government fees. In addition, the applicant must pay for additional services:
- Additional permits
- Registrations
- Leasing space
Tourism License
Tourism is a very important sector in the UAE as it is a very popular tourist destination, and tourism contributes a lot to the country’s GDP. Tour operators can work in free zones or on the mainland. Tourism in the UAE encompasses a wide range of activities, including:
- Operating tours and excursions within the country
- Managing logistics and accommodations for tourists visiting the country
- Organizing tours around culture, education, or history
The following categories of people and entities need to obtain a tourism license to operate in the country:
- Travel companies that offer tours and package deals
- Hotels that offer accommodation to tourists
- Restaurants
- Car rental agencies
- Travel agencies
Beyond this, there are several different types of licenses that are given, depending on the sphere of activity. These include:
- Inbound tourism. This category is relevant to anyone who organizes events locally and/or provides transportation services.
- Outbound tourism. Outbound tourism licenses are given to those who provide travel packages to places outside the UAE. This includes flights, accommodations, and other activities.
- Travel agency licenses. This type of license is given to people operating travel agencies in the country. It includes selling airline tickets, making hotel reservations, assisting with visas, car rental, and related activities.
Cost
The cost of obtaining a tourism license in the UAE varies, but it ranges from AED 15,000 to AED 25,000. This depends on the size of the business, where it is located – on the mainland or in free zones – and the particular type of license received. You must undergo an audit to ensure compliance regulations, and be prepared to go through the renewal process once your term has expired.
Additional Specialized Licenses in the UAE
Beyond these general categories, there are also specialized licenses that you might have to receive in the UAE, depending on your sphere of activity and whether you work in free zones or another jurisdiction. This includes things like freelancer licenses, agricultural licenses, media licenses, and craftsmanship licenses.
Each of these license types is applicable for people who have skills not related to any of the major categories. Requirements vary depending on the particular sphere.
How to Choose the Right Business License in the UAE
- There are several factors that contribute to which type of license you should seek in the UAE. These include:
- Your specific sphere of business and business activity that you hope to conduct
- Your location – free zones have different requirements as free zone companies often have fewer obligations
- What the ownership structure of your company will be
- If you are not sure what type of license to apply for, contact the C-UAE site. Their customer service agents will be able to answer your questions.
Steps to Obtain a Business License in the UAE
- Although the steps to obtain a business license in the country vary, depending on the license type, the application process is usually the following:
- You must decide on your jurisdiction. It will either be on the mainland or in a free zone. Both have advantages, so you should research the details before you make a decision.
- Be sure you meet the requirements. Some licenses require a local service agent or shareholder.
- Determine what your business activity will be and select a trade name.
- Submit the required documents, including a passport copy, a memorandum of association, a no objection certificate, proof of address, and an initial application approval form to get the necessary approvals.
- Make the payment and wait 2-4 weeks.
Conclusion: Why Getting the Right License Matters
To successfully operate a business in the UAE, it is important that you align your company registration with your precise business activities and become a license holder in the relevant areas. The process can be complicated, so it could be to your advantage to get professional services from consultants. If you succeed, you will gain customs privileges and be able to contribute to the Dubai economy or the economy of your chosen Emirate. You will be able to use your expertise to the best of your advantage.
If you are an entrepreneur looking to expand your business, go into our insights section and contact us for assistance.
