Dubai General Trading License: Full Guide

When it comes to company formation in the UAE, obtaining the appropriate business license in Dubai is an important task that requires careful consideration. This can be simplified with the assistance of a company formation specialist who can assist with the application process.

General Trading License In UAE

Types of Licenses:

A professional services license is suitable for businesses that offer professional services. On the other hand, a commercial license is necessary for businesses that trade in goods.

Specific License Types:

Within these categories are specific license types that are tailored to meet different business needs. If your business deals with various goods, a general trading license may be suitable. This type of license enables you to trade in a diverse range of goods, from food and clothing to toys and electronic parts, all under one license. Applying for a general trading license in Dubai is a straightforward process. Here’s everything you need to know:

General Trading License in Dubai – All you need to know:

What Does General Trading Mean
What Is A General Trading License
What Start A General Trading Company In Dubai
How To Get A General Trading License In Dubai?
What Are The Documents Required For A General Trading License In Dubai?
General Trading License In Dubai: Mainland Vs Free Zones
Can A Business With An IFZA General Trading License Sell Products On Dubai Mainland?
What’s The Difference Between A Trade License And A General Trading License In Dubai?
Do You Have To Live In Dubai To Open A General Trading Business There?
Get Your General Trading License In Dubai With IFZA

What Does General Trading Mean?

General trading in the United Arab Emirates (UAE) involves the import, export, and trade of various goods and products. It encompasses the trading of a wide range of physical products, including but not limited to furniture, electronics, clothing, toys, and industrial equipment. However, it is important to note that there are restrictions on certain products such as cars, alcohol, medical products, and weaponry, and a specific license is required to import or export them.

What Is a General Trading License?

It’s important to note that a ‘general trading license’ is not the same as a ‘trading license.’ While a trading license only permits you to trade within a single product category of an industry, a general trading license allows you to trade in multiple products across various industries.

Why Start a General Trading Company in Dubai?

Setting up a general trading company in Dubai comes with a host of benefits and opportunities, making it a smart business decision for any entrepreneur. Here are some of the top reasons to consider starting your general trading business in Dubai:

01.Local and International Trade

Obtaining a general trading license in Dubai allows you to import all goods listed in the license. This means you can distribute these goods in Dubai’s local market or export and re-export them to profitable countries.

02.Low Tax Rate

The fact that the UAE has one of the world’s lowest tax rates makes it one of the best incentives to start a business in Dubai.

03.Wide Range of Products

With a general trading license in Dubai, you can trade a wide range of products, except for a few restricted products or sensitive materials. The initial high fees for the license pay off with ongoing benefits for several years to come.

04.Simple Process

The process of obtaining a general trading license in Dubai is both profitable and easy. You can get your trading license from DET after submitting the required documents in just one week, unlike several other long registration processes.

05.Easy Sponsorship for Dependents

The general trading license also offers investors the advantage of making it easier for their employees and dependents to apply for visas. By sponsoring their dependents, these traders can obtain UAE visas more easily.

06.Center of Global Trade

Dubai’s geographical position at the center of the global map for world trade means you will have many opportunities to make your business a success.

07.World-Class Infrastructure

Dubai has world-class infrastructure for your company, including warehouses, logistics businesses, excellent seaports and airports, and a smooth customs process.

08.Business Networks and Support Services

There are many businesses in the UAE that can provide support services for your trading company, offering things like logistics, warehousing, legal, marketing, finance, and much more.

09.Business-Friendly and High Demand

The Dubai government is business-friendly and has fostered an environment that makes general trading smooth and transparent. The country’s population is also wealthy, and the UAE has a booming economy, which means you can be confident the products you import will find a market.

How To Get a General Trading License in Dubai?

Getting a general trading license in Dubai involves several steps that are important to follow.

General Trading License in Dubai Steps:

Step 1: Choose Your Jurisdiction

Dubai offers two primary jurisdictions for businesses – Mainland and Free Zones.

Mainland companies are regulated by the Dubai Department of Economy and Tourism (DET) and are required to have a UAE national as a partner or sponsor. On the other hand, Free Zones are designed to offer foreign investors 100% ownership of their business, without the need for a local partner.

Free Zones like IFZA are particularly attractive to traders and investors as they offer several benefits, including low tax rates, 100% repatriation of capital and profits, easy business setup procedures, and simplified business regulations. Additionally, Free Zones offer businesses access to state-of-the-art infrastructure, modern communication systems, and world-class logistics facilities, making them an ideal location for international trade.

Dubai has over 30 free zones, each designed to cater to specific industries, such as technology, media, healthcare, and logistics. When choosing a Free Zone, it’s essential to consider factors such as location, infrastructure, cost, and the types of licenses available.

While both Mainland and Free Zone jurisdictions have their advantages, Free Zones are particularly attractive to traders due to their favorable regulations and business-friendly environment. With the right jurisdiction, businesses can enjoy the benefits of a general trading license in Dubai and thrive in the emirate’s growing economy.

Step 2: Choose A Company Name

Select a name for your general trading business and submit it for initial approval. Make sure to follow the guidelines for naming a company in Dubai. Once approved, you can proceed with applying for your general trading license.

Key rules to keep in mind:

The name must be transliterated into Arabic or English without special characters or icons.
Avoid offensive, religious, or political terms.
The name can’t start with certain words like “Universal” or “International.”
The name must pass a database check for duplicates.
Trademarks need to be registered with the Ministry of Economy.
Using a country or government name requires embassy approval.

For more detailed guidelines, refer to the full naming regulations here.

Step 3: Secure Office Space

Since general trading involves physical goods, you might need to rent an office space for storage.

Step 4: Obtain Customs Clearance

Obtaining customs clearance is a primary obligation for any business that imports goods into the country. To do this, you must obtain an import code from the customs authority and pay the applicable fee. You can register with any customs authority in the emirates.

What Are the Documents Required for a General Trading License in Dubai?

If you plan to form a company with individual shareholders, you will need to provide the following:

A copy of your passport
Passport-size photo
Copy of your residence visa
Copy of your Emirates ID

These documents are necessary to verify your identity and residency status in Dubai.

On the other hand, if you plan to form a trading company with corporate shareholders, you will need to provide the following:

Certificate of incorporation: This is a legal document that confirms the creation of the company and its registration with the relevant government authority.
Certificate of incumbency or equivalent: The certificate of incumbency or equivalent is a document that lists the current shareholders, directors, and officers of the company.
Memorandum of association: The memorandum of association is a legal document that outlines the objectives, powers, and rules of the company.
Stakeholder resolution: The Stakeholder resolution is a document that allows the company to start general trading and approves the application for a general trading license.

These documents are necessary to verify the legal existence of the company and the authorized signatories who can act on behalf of the company.

It’s important to note that these documents may vary depending on the jurisdiction where you plan to set up your general trading company in Dubai. Additionally, you may need to provide additional documents or undergo additional procedures, such as getting your documents attested by the relevant authorities or obtaining a no-objection certificate from your current employer if you are working in Dubai on a residency visa.

Our global network of Professional Partners assisted by the experts at IFZA will ensure that you have all the necessary documents and to guide you through the process of opening a general trading company in Dubai.

General Trading License in Dubai: Mainland Vs Free Zones

Dubai offers two options for obtaining a General Trading License: through Dubai Economy or Dubai Free Zones. Each option offers various benefits and costs. Learn more about these options in our Dubai business setup guide.

General Trading License in Dubai – Mainland

For investors looking to open a wholesale and retail business in mainland Dubai, obtaining a General Trading License from Dubai Economy is the ideal choice.

Instant License Option

Dubai Economy offers an Instant License with a one-year validity that does not require office space. However, after one year, the investor must renew the license by securing physical office space for the company to conduct trade in and outside the UAE.

Advantages of Mainland General Trading License Dubai

Mainland is one of the most preferred locations among investors due to its flexibility and ability to scale up the trading company.

Key advantages of obtaining a General Trading License from Dubai Mainland:

Allows entrepreneurs to be actively involved in local trading in the UAE market
No restriction on the number of visas and employment visas, depending on the office space acquired.
Easy company formation in UAE Mainland, with LLC Company Structure being the most chosen by investors.

General Trading License in Dubai Free Zones

The Free Zones of UAE offer easy and smooth company formation process. IFZA offers exclusive general trading license packages that suit all investors requirements.

The General Trade License enables investors to facilitate international trade easily due to the advanced logistics and warehouse support available at the Free Zones.

100% foreign ownership
Total control of Business
Fixed fee for the term of the license
100% repatriation of profits
Customs duty exemption

Can A Business with an IFZA General Trading License (Free Zone) Sell Products on The Dubai Mainland?

IFZA general trading companies are required to establish a partnership with a local distributor holding a mainland license, who will handle all aspects of delivery and fulfilment for transactions on the Dubai mainland. This ensures that businesses with an IFZA general trading license can still effectively operate and reach customers in Dubai while complying with local regulations.

What’s The Difference Between a Trade License and A General Trading License in Dubai?

In the UAE, businesses must obtain a license before engaging in any commercial activity. Two types of licenses commonly issued are general trading licenses and trade licenses. Although they sound similar, there are key differences between them.

Difference between general trading license and trade license in Dubai:

General Trading License in Dubai: A general trading license allows businesses to retail and wholesale any goods within the UAE and outside the UAE, except prohibited goods that require approval from authorities.
Scope of General Trading License in Dubai: The scope of a general trading license in Dubai is large and wide enough compared to a trading license. This means that businesses with a general trading license can trade in any type of goods that are not exempted, including import and export activities.
Trade License: A trade license in Dubai, on the other hand, is limited to specific types of goods registered under the license. Businesses with a trade license can only trade in goods that are specified in the license. Any other goods available in the market cannot be traded without being registered under the license.
Scope of Trade License: The scope of a trade license is limited to the specific type of goods mentioned in the license. For instance, if a business has a trade license for selling clothes, they cannot sell any other product without obtaining another license.

Do You Have to Live in Dubai to Open a General Trading Business There?

In the past, foreign business owners needed to have a local sponsor or partner to open a business in Dubai or anywhere in the UAE. However, in recent years, the UAE government has made significant changes to its foreign ownership laws, making it possible for foreign business owners to own 100% of their business in some specific areas, such as Free Zones.

This means that if you want to open a business in a Free Zone in Dubai, you do not have to be a resident or citizen of the UAE. You can operate your business remotely or hire someone to manage it on your behalf. This is because Free Zones are designed to attract foreign investment by offering incentives such as simplified incorporation procedures.

On the other hand, if you want to open a business outside the Free Zones, some sectors require a local sponsor or partner to own 51% of the business, while you can only own 49%. However, in most sectors, such as technology, healthcare, education, and renewable energy, foreign investors can now own 100% of the business without the need for a local partner.

The rules and regulations for foreign ownership vary depending on the location and sector you choose to invest in. However, if you decide to invest in a Free Zone, you can enjoy 100% foreign ownership, which means you have complete control over your business operations.

Get Your General Trading License in Dubai with IFZA

IFZA is a truly International Free Zone and renowned for General Trading Licenses in Dubai. Our streamlined processes and international network of Professional Partners make it easy for you to apply for an ecommerce license without the need to physically be present in the UAE.

Our focus is on providing entrepreneurs like you with a hassle-free process of setting up your business in Dubai. With an IFZA general trading license in Dubai, you can choose from thousands of business activities and combine Commercial and Professional activities under a single license. Our Free Zone ecosystem provides ongoing support for your business, including assistance with corporate bank account opening and medical insurance coverage.

Take the first step towards success in launching your ecommerce business in Dubai today. Contact an IFZA Professional Partner to learn more about obtaining a general trading license in Dubai with IFZA.

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FREQUENTLY ASKED QUESTIONS (FAQS)

Renewing your trade license in Dubai is important for maintaining legal business operations. Neglecting to do so can lead to a series of complications and penalties. Operating without a valid trade license is illegal in Dubai. This can lead to the authorities stopping your business activities until the license is renewed. You can avoid these potential issues by renewing your license on time. If you have any questions or require assistance with the renewal process, consult with a business setup specialist in Dubai.

Free Zones in Dubai offer various advantages for businesses, including 100% foreign ownership, exemption from import and export duties, streamlined business setup processes, and access to state-of-the-art infrastructure. These factors make Free Zones particularly attractive for international trade and business expansion

To maintain compliance, businesses with a General Trading License are expected to renew their license annually or as per the specified renewal period. They are also required to adhere to local regulations regarding financial reporting, VAT compliance (if applicable), and any industry-specific regulations.

Yes, a General Trading License can typically be upgraded or modified to accommodate changes in business activities or expansion plans. To do this you will have to submit updated documents and fulfil any additional requirements required by the licensing authority.

To effectively market a business with a General Trading License in Dubai, consider strategies such as digital marketing, social media platforms, engaging in local advertising, and participating in industry trade shows and events. It is important to tailor your marketing approach to your target audience and the diverse range of products you offer.

Yes, networking can provide valuable opportunities to build relationships with potential clients, suppliers, and business partners in the UAE. You can attend industry events, join local business groups to expand your network and gain access to new business opportunities.

The costs can vary based on the jurisdiction (Mainland or Free Zone), office space requirements, and specific business activities. It’s essential to budget for application fees, trade license fees, and any additional costs for office rent and legal services.

While a general trading license allows for a broad range of products, certain items such as weapons, narcotics, and specific medical supplies are prohibited. Always check the latest regulations to ensure compliance.

With a general trading license in Dubai, you can engage in the import, export, and distribution of a wide range of products. This license allows you to conduct business across various sectors such as electronics, textiles, construction materials, food products, and more. It gives flexibility to trade in multiple commodities without the need for separate licenses for each category.

Dubai offers two main types of trade licenses:

Commercial License: For businesses involved in the buying and selling of goods.
Professional License: For service-based businesses such as consulting, IT services, and other professional activities.

In addition, there are specialized licenses like the General Trading License, which allows trading in a wide range of products.

A general trading license is a specific type of trade license that allows businesses to deal in a wide variety of products without restrictions on categories. On the other hand, a trading license is a more generic term that refers to any license granted for commercial trading activities. A general trading license covers more than one product category, whereas other trading licenses might be limited to specific products or services.

General trading works by allowing businesses to import, export, and distribute multiple categories of goods under a single license. Companies with a general trading license in Dubai can operate across various sectors, providing them with the flexibility to expand their operations without the need for multiple licenses.

If your business’s taxable supplies and imports exceed AED 375,000 annually, you will need to register for VAT in the UAE. As a trading company, this means keeping track of VAT on all your transactions, whether you’re selling goods locally or internationally. You must charge VAT on taxable goods and services, submit VAT returns, and pay the collected VAT to the UAE Federal Tax Authority.

Yes, you can apply for a general trading license remotely in Dubai, especially if you are setting up in a free zone. Through the online portals of various free zones, you can complete most of the steps for company formation, including submitting documents, selecting a company name, and paying fees, all without needing to be physically present in the UAE.