Commercial License in Dubai: Requirements and Differences

Commercial License in Dubai: All You Need To Know

Among the available licenses, the commercial license is a popular choice for many business owners in Dubai and the UAE.

Commercial License in Dubai:

• What is a Commercial License
• How to Get a Commercial License in Dubai?
• Documents Required for a Commercial License in Dubai
• How to Obtain a Commercial License in Dubai Free Zone
• The Renewal Process of the Commercial License in Dubai
• Benefits of Having a Commercial License in Dubai
• What are the Other Kinds of Business Licenses in Dubai?
• What’s the Difference Between a Professional License and a Commercial License in Dubai?
• What are the Business Activities Allowed Under Commercial License in Dubai?
• FAQs about Commercial License in Dubai

What is a Commercial License?

A commercial license enables a company to trade, import and export products, and sell some services within the UAE. With Dubai’s strategic location, surrounded by major markets in Africa, Asia, Europe, and the Middle East, a commercial license is an attractive option for businesses looking to establish themselves in the region. It also allows businesses to participate in trading relationships, both locally and internationally.

How To Get a Commercial License in Dubai?

Obtaining a commercial license in Dubai requires a few simple steps, which can be made easier with the help of IFZA’s global network of Professional Partners. Here are the detailed steps involved in getting a commercial license in Dubai:

Step 1: Decide on Free Zone or Mainland Setup

The first step is to decide whether to set up your business in a free zone or on the mainland. Consider the advantages of both options, such as the business support, financial incentives, and license types available. The decision you make will depend on the nature of your business.

Step 2: Choose A Company Name

Choosing a company name is a crucial step in the process of establishing a UAE business. The name must follow a set of naming conventions and avoid any offensive or blasphemous language, as well as the names of well-known organizations. Ensure that your chosen name is available to register.

Step 3: Submit Your License Application

The final step is submitting your commercial license application. If you are setting up on the mainland, you can apply directly to the Department of Economy and Tourism (DET). If you have chosen a Free Zone setup, you can apply directly to the Free Zone. Make sure to provide all the required documents and proof of payment of the charge for obtaining a trade license.

It’s important to note that throughout the process of obtaining a commercial license in Dubai, it’s beneficial to seek help from IFZA’s global network of Professional Partners. They can provide valuable advice and guidance, ensuring a fast and smooth process.

Documents Required for A Commercial License in Dubai

You are usually only required to provide a few details and some basic documentation, including:

• Completed application form.
• Passport copy of the proposed owner or owners.
• Two colour passport size photos.

How to Obtain a Commercial License in Dubai Free Zone with IFZA

Setting up a business with IFZA is a straightforward and efficient process.

Here are the steps to follow to obtain a commercial license in Dubai Free Zone for your business setup:

Step 1: Consultation

• Discuss your business requirements with IFZA’s multinational, multilingual team.
• Determine your license type, business activities, visa package, and office solutions.

Step 2: Prepare Documents

• Fill out a license application form, including Ultimate Beneficial Ownership information.
• Prepare a copy of your passport.
• Submit a digital passport photo.
• Submit Emirates ID and visa copy for UAE residents (If applicable)

Step 3: Registration

• IFZA support team registers the documents on the registration portal.
• Upon approval, two e-legal forms will be issued to be signed before the issuance of incorporation documents.

Step 4: License Issuance

• A soft copy of the commercial license will be sent via email.
• The original copy of the license will be available for pick up from the IFZA office.

Documents Required for Obtaining a Commercial License with IFZA:

• License application form (including Ultimate Beneficial Ownership information)
• Passport copy
• Digital passport photo
• Emirates ID and visa copy for UAE residents (If applicable)

Partnering with IFZA for your business setup will provide you with premium-standard business setup solutions and easy access to global markets. IFZA’s network of Government Authorities and Professional Partners will pave the way to prosperity for your business. Reach out to us learn more about obtaining a commercial license for your business setup.

The Renewal Process of The Commercial License

Renewing a Commercial License in Dubai Mainland:

• Visit the Dubai Economic Department (DED) website and log in to the eServices portal using your credentials.

• Select the “Renew License” option from the menu and enter your trade license number.

• Review the details of your trade license and make any necessary changes.

• Pay the required fees using a credit card or through a bank transfer.

• After completing the payment, the renewed license will be issued and sent to you by email or can be collected from the DED.

Renewing a commercial license in Dubai Free Zone:

1. Get in touch with IFZA Professional Partners to review the details of your trade license and make any necessary changes.

2. Pay the required fees using a credit card or through a bank transfer.

3. After completing the payment, the renewed license will be issued and sent to you by email or can be collected from the free zone authority.

It is important to note that the specific steps and requirements may vary depending on the type of business and Free Zone authority or DET in question.

Benefits Of Having a Commercial License in Dubai:

1. Tax Exemptions and Repatriation of Income to the Foreign Investor’s Home Country:

   Companies with a commercial license operating in a free trade zone are exempted from taxes and are allowed to repatriate their income to their home country without any restrictions.

2. Prospects of Involving the Dubai Business in Foreign Trade:

   With a commercial license in Dubai, businesses can engage in foreign trade activities and expand their market reach globally.

3. Allows Businesses to Sell Several Goods:

   A commercial license in Dubai enables businesses to sell a wide range of goods and services under a single license, providing them with greater opportunities for growth and profitability.

4. Simplifies the Method of Securing Work Visas for Foreign Nationals:

   Companies with a commercial license in Dubai can easily obtain work visas for their foreign employees, making it easier to hire and retain top talent from around the world.

5. Facilitates International Employee Visa Admission:

   A commercial license in Dubai allows businesses to recruit a larger number of foreign workers, making it easier to build a diverse and talented workforce.

6. Protection for Trading Companies in Dubai:

   A commercial license in Dubai not only serves as a regulatory framework for trading companies but also offers protection against legal and financial risks.

7. Can Carry Out a Minimum of Ten Business Activities:

   A commercial license in Dubai enables companies to carry out a minimum of ten business activities, providing them with greater flexibility and the ability to diversify their business operations.

What are the Other Kinds of Business Licenses in Dubai?

Dubai offers various types of licenses for businesses to operate in the city. Some of the most popular ones include:

• Professional License:

  Businesses that generate revenue through service-oriented activities can apply for a professional license. This includes consultancy firms, management services, educational and training providers, as well as technical services such as hair salons and spas.

• Tourism License:

  Tourism-related businesses require a tourist trade license to operate. This includes hotel apartment rentals, vacation home rentals, travel agencies, outward and inbound tour operators, and maritime excursions.

https://youtu.be/8kSGLyyjT1Y

What’s the Difference Between a Professional License and a Commercial License in Dubai?

When it comes to obtaining a business license in Dubai, there are two popular options to choose from: professional license and the commercial license. It’s important to understand the key differences between these licenses before deciding which one is right for your business.

• Business Activity

  One major difference between the two is the type of business activities they cover. A professional license is required for businesses that provide services or advice that involve a unique skill set. This could include fields like consultancy, artisanship, or medical services. On the other hand, a commercial license is necessary for businesses that deal with tangible goods or services. Examples of activities covered by a commercial license include the sale of vehicle parts, rental of properties, or software trading and development.

• Ownership Types

  Another important distinction is ownership. Professional license holders can own 100% of the business and all its shares. In the UAE Mainland, investors with a commercial license can only own up to 49% of the shares, with the remaining 51% being owned by a local agent in the UAE Mainland. If you choose to set up your business in a Free Zone like IFZA, 100% ownership is possible.

• Ownership Liability

  There are also differences in terms of ownership liability. A company with a professional license has unlimited liability unless the business decides to be designated as a limited liability company. Meanwhile, a company with a commercial license always holds limited liability. Overall, it’s important to carefully consider the nature of your business and your goals before choosing between a professional license and a commercial license in Dubai. Understanding these key differences can help you make an informed decision and ensure that your business is set up for success in Dubai.

What Are the Business Activities Allowed Under Commercial License in Dubai?

• Mainland Commercial License in Dubai:

The activities allowed include import and export activities, sale of electronic products, supply of brokerage services, real estate-related services, sale of construction materials, and more. The Dubai Department of Economy and Tourism (DET) approves all commercial activities that can be carried out under a mainland commercial license.

• Freezone Commercial License in Dubai:

On the other hand, freezone commercial licenses have a wider range of activities that are specifically tailored to the freezone’s industry focus. Some Free Zones are focused on technology and IT-related businesses, so the activities allowed under its commercial license include software development, electronic commerce, IT consultancy, and more. Similarly, other Free Zones are focused on healthcare-related businesses, so the activities allowed under its commercial license include medical equipment trading, healthcare consultancy, and more.

Overall, while there is some overlap in the types of activities allowed under mainland and freezone commercial licenses, the Free Zone licenses are more specific to the industries and business activities that each freezone is designed to support.

Commercial License in Dubai FAQs

1. What is a Commercial License in Dubai, And Who Needs To Apply For It?A commercial license in Dubai is required for companies that sell products or services within the UAE and abroad. Any entrepreneur interested in conducting economic activities in Dubai needs to apply for a commercial license.
2. Who Issues the Commercial License in Dubai, And What Documents Are Required for it?The Department of Economy and Transportation in Dubai and the Federal Ministry of Economy in UAE are responsible for issuing commercial licenses in the Mainland. The documents required for a commercial license application in Dubai include:- Completed application forms from the relevant authorities.
   – Copy of the rental contract where the business is located.
   – Company documents of incorporation.
   – Payment of specific fees at the time of application.
3. Are There Any Specific Economic Activities That Require a Commercial License in Dubai?Yes, several activities require a commercial license in Dubai, including real estate companies, trading activities, brokerage services, travel agencies, logistics, and transportation companies. One must apply for a commercial license before starting any of these activities.
4. Can I Apply for a Commercial License in Dubai at The Time of Company Incorporation?Yes, it is advisable to apply for a commercial license at the same time as company incorporation to ensure all necessary licenses and permits are obtained.
5. How Many Activities Can Be Provided Under a Commercial License in Dubai?According to UAE business regulations, companies established in Dubai cannot have more than 10 activities linked to a commercial license.
6. What is the Validity of a Commercial License in Dubai, And Can It Be Extended?A commercial license in Dubai Mainland is valid for one year, and it can be extended before the expiry date. The application requires the same documents, but additional approvals may be necessary. However, in an International Free Zone like IFZA, entrepreneurs have the option of choosing multi-year licenses of up to 5 years! These multi-year licenses also come along with various discounts.
7. Do I Need a Commercial License for a Healthcare Company in Dubai?Yes, activities in the healthcare system require a commercial license in Dubai. One must apply for such a license before starting any healthcare-related activities in the UAE.
8. Can I Hire Foreign Workers Under a Commercial License in Dubai?Yes, the visa and immigration procedures are straightforward under a commercial license, allowing international companies to hire staff from abroad.