Each year, approximately 90,000 new business licenses are issued in Dubai, testament to the ease of doing business in the emirate and the culture of innovation and entrepreneurship that the UAE has created.
Thanks to a slew of commercial and residency reforms over the last few years, it’s now easier than ever for foreign investors to obtain residency, register a business and capitalise on the growing business opportunities in the UAE, Middle East and beyond.
Of the 45,653 business licenses issued in Dubai in the first half of 2022, 45% were commercial.
There are thousands of business activities that can be carried out with a commercial license, ranging from import and export activities, trading, rental and leasing services, retail, real estate investment, and broadcasting and communication.
A commercial license is available on the mainland, through the Department of Economic Development (DED)or in any of the emirate’s 20+ free zones directly from the free zone authority itself.
Mainland Commercial License
A mainland commercial license is obtained from the DED and allows the holder to trade, import and export goods and sell services across the UAE territory and abroad, without restriction. Up to 10 activities can be included on a single license and it’s valid for one year before renewal will be required.
Leasing of business premises is required, whether that be an office space, retail unit or warehouse facility.
The number of residence visas that can be obtained for foreign employees is dependent on the size of the business premises leased, with an allowance for 1 residence visa for every 9 square metres of office space or 1 visa for every 15 square meters leased for warehouse premises. In some instances, more visas can be obtained under 1 license. However, this is subject to approval, and you’ll have to submit an application with reasoning behind the request.
Free Zone Commercial license
Free zone company setup has distinct advantages over onshore company setup with the availability of significant tax incentives such as exemption from corporate tax, import and export duties, customs duties, and the allowance of full repatriation of capital and profits to the business owner’s home country without restrictions.
The primary drawback of free zone company setup in comparison to the mainland is that free zone companies are generally restricted to conducting business within the free zone itself or with other free zone entities. You’ll typically have limited access to the local UAE market and may require a local distributor or agent to sell your products or services to customers outside the free zone’s jurisdiction. This limitation can hinder business opportunities within the broader UAE market.
Most Dubai free zones offer commercial licenses to businesses operating within their respective jurisdictions, allowing businesses to engage in trading, import/export, and various other commercial activities. However, it’s important to note that the specific activities permitted under a commercial license may vary from one free zone to another depending on their industry focus.
Some free zones have a specific focus on certain industries or sectors. For example, Dubai Internet City primarily caters to technology and IT-related businesses, while Dubai Media City focuses on media and creative industries. Therefore, it’s essential to choose a free zone that aligns with your business activities and objectives.
What documents are required for a commercial license in Dubai?
The specific documents required for a commercial license in Dubai may vary depending on the type of business, the selected free zone or jurisdiction, and other factors. However, below is a general list of documents that are commonly requested during the commercial licence application process in Dubai:
- Completed application form: The application form provided by the relevant authority, such as the Department of Economic Development (DED) or the specific free zone authority, should be completed accurately and signed.
- Business plan: A comprehensive business plan outlining the nature of your business, market analysis, financial projections, and operational details.
- Passport copies: Copies of passports of the company’s shareholders, directors, and managers. In some cases, the copies may need to be notarised or attested.
- Visa copies: Copies of valid UAE residency visas of the company’s shareholders, directors, and managers, if applicable.
- No Objection Certificate (NOC): If the company’s shareholders, directors, or managers are employed by another company, a NOC from their current employer may be required.
- Memorandum of Association (MOA): For companies with multiple shareholders, a MOA detailing the shareholding structure and distribution of responsibilities among shareholders.
- Board resolution: A board resolution issued by the company’s shareholders or directors, authorizing the setup of the company and appointing authorized signatories.
- Lease agreement: A copy of the lease agreement or tenancy contract for the business premises in Dubai. The lease agreement should comply with the requirements of the relevant authority.
- Trade name reservation: A copy of the approved trade name reservation certificate obtained from the relevant authority.
- Bank reference letter: A reference letter from the company’s bank confirming the account opening and the good standing of the account.
- Other licenses and permits: Depending on the nature of the business, additional licences or permits may be required. For example, businesses in specific sectors like healthcare, food services, or construction may need additional approvals from relevant authorities.
What are the steps for obtaining a commercial license in Dubai?
The specific steps for obtaining a commercial license in Dubai can vary depending on the type of business and the jurisdiction (mainland or free zone) you choose. However, below is a general overview of the process:
- Determine the business activity and legal structure: Identify the nature of your business activity and the legal structure that suits your needs. Determine whether you want to set up in Dubai mainland or a specific free zone.
- Choose a trade name: Select a unique trade name for your business and ensure it complies with the naming conventions and guidelines set by the relevant authority.
- Prepare the required documents: Gather the necessary documents, which may include passport copies, visa copies, business plan, lease agreement, MOA, board resolution, and other specific documents as requested by the authority or free zone.
- Apply for initial approval: Submit the required documents to the relevant authority or free zone to obtain initial approval for your business setup. The application form provided by the authority or free zone should be completed accurately.
- Lease office space: Secure a suitable office space in Dubai that meets the requirements of the authority or free zone. This may involve signing a lease agreement or tenancy contract.
- Obtain external approvals (if applicable): Depending on the nature of your business activity, you may need to obtain additional approvals or NOCs from relevant government departments or regulatory bodies. This could include obtaining approvals from the Dubai Municipality, Dubai Health Authority, Dubai Civil Defense, or other relevant entities.
- Payment of fees: Pay the applicable fees for the commercial license, registration, and other related services. The fee structure can vary depending on the authority or free zone.
- Finalize legal documents: Finalize the necessary legal documents, such as the Memorandum of Association (MOA) or Articles of Association (AOA), in accordance with the requirements of the authority or free zone.
- Obtain commercial license: Once all the necessary documentation is complete and fees are paid, you can obtain the commercial license from the relevant authority or free zone.
- Visa and employee sponsorship (if applicable): If you require residency visas for shareholders, directors, or employees, you can initiate the visa application process and fulfil the requirements set by the relevant authority or free zone.
How can Global Link help?
Global Link has over 16 years’ experience working with local and global businesses, providing bespoke consultancy services for company incorporation in Dubai and the wider UAE.
We can advise you on the best business license and jurisdiction for your business venture, assisting with the preparation of all documentation and liaising with government bodies and free zone authorities on your behalf to ensure a swift and seamless setup and full compliance with all local laws and regulations.
If you need advice on this or any other company incorporation, visa or PRO service, please get in touch with us on +971 4 553 9901 or email us at [email protected] and we will be happy to assist you.