Dubai’s vibrant economy, strategic location, and business-friendly policies make it a top destination for entrepreneurs worldwide. A critical step to launching your business in this dynamic city is obtaining a trade license, a legal document that authorizes your company to conduct specific activities. This comprehensive guide outlines the step-by-step process to secure a trade license in Dubai, with a detailed breakdown of costs, ensuring you can navigate the process with confidence.
Understanding Trade Licenses in Dubai
A trade license, issued by the Department of Economic Development (DED) for Mainland businesses or by Free Zone authorities, validates your business operations in Dubai. It’s essential for compliance with local regulations and accessing the UAE’s market. There are several types of trade licenses:
- Commercial License: For trading goods and services (e.g., retail, logistics).
- Professional License: For service-based businesses (e.g., consultancy, IT services).
- Industrial License: For manufacturing and industrial activities.
- General Trading License: Allows a broad range of trading activities under one license.
Your choice of license depends on your business activities, and you can select up to ten activities per license. Additionally, you’ll need to decide between a Mainland or Free Zone setup:
- Mainland: Offers unrestricted access to the UAE market but may require a local sponsor for certain activities, though 100% foreign ownership is now allowed for many sectors (UAE Government Portal).
- Free Zone: Provides 100% foreign ownership, tax exemptions, and simplified processes but limits direct local market access without a distributor.
Step-by-Step Process to Obtain a Trade License
1. Choose a Business Name
Select a unique name that complies with UAE naming regulations, avoiding offensive, religious, or government-related terms. Verify availability and reserve the name through the DED or Free Zone authority.
- Cost: Trade Name Reservation Fee – AED 620–720 (premium names may cost more).
2. Select the Jurisdiction
Decide between Mainland, Free Zone, or Offshore based on your business goals:
- Mainland: Ideal for local market access and flexibility.
- Free Zone: Suited for international trade with tax benefits.
- Offshore: For international operations without a local presence (less common for new businesses).
This choice impacts costs, market access, and regulatory requirements.
3. Define Business Activities
Choose from over 2,000 approved activities listed by the DED or Free Zone authorities. Specify up to ten activities to be included on your license, as this determines the license type and any additional approvals needed.
- Cost: Business Activity Fees – AED 150–500 per activity.
4. Choose the Legal Structure
Select a legal structure that suits your business, such as:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Partnership
- Branch of a Foreign Company
- Free Zone Company
The structure affects liability, ownership, and operational flexibility.
5. Obtain Initial Approval
Submit an application to the DED (Mainland) or Free Zone authority for initial approval. Include details about your business activities, shareholders, and managers. This step confirms your eligibility to proceed.
- Cost: Initial Approval Fees – AED 220–420 (Mainland).
6. Gather Required Documents
Prepare the following documents:
- Memorandum of Association (MoA), notarized for LLCs
- Passport copies of shareholders and managers
- Tenancy agreement (Ejari) for office space (Mainland only)
- Emirates ID and unified number (if applicable)
- Cost:
- Notarisation of MoA – AED 350
- Document Clearing – AED 150 per document
7. Rent an Office (Mainland Only)
For Mainland licenses, secure a physical office space and obtain a tenancy contract attested by Ejari. Free Zones offer flexible options like flexi-desks or virtual offices, reducing costs.
- Cost: Office Rent – Variable, average AED 34,189 (Mainland).
8. Select License Type
Choose the appropriate license type:
- Normal License: Requires MoA and lease agreement; standard process.
- Instant License: Issued in 5 minutes for specific activities, includes Dubai Chamber membership and a virtual office for the first year.
- DED Trader License: For home-based businesses, costs AED 1,370 (AED 1,070 for license + AED 300 for Dubai Chamber).
9. Submit Application
Submit all documents to the DED (Mainland) or Free Zone authority. Ensure documents are properly attested and signatures are included.
- Cost: License Registration Fee – AED 600 (Mainland).
10. Pay Licensing Fees
Pay the required fees, which vary based on license type, activities, and location. Below are examples:
- Commercial License: AED 24,500 (Mainland), from AED 12,500 (Free Zones)
- Professional License: Starts at AED 9,950 (Mainland), AED 12,500–50,000 (Free Zones)
- Industrial License: AED 25,000 (Mainland)
- General Trading License: AED 12,500–15,000 (Mainland)
11. Obtain Additional Approvals (If Required)
Certain activities (e.g., healthcare, construction) require approvals from authorities like the Ministry of Economy or Dubai Municipality. Secure these before final submission.
12. Receive Your Trade License
Upon approval, collect your trade license from the DED or Free Zone authority. It may also be available online through their portal.
13. Open a Corporate Bank Account
Use your trade license to open a corporate bank account. Provide the trade license, MoA, and passport copies to complete the process.
Cost Breakdown
The total cost of obtaining a trade license in Dubai ranges from AED 10,000 to 50,000, depending on the license type, business activities, legal structure, and jurisdiction. Below is a detailed cost table:
| Cost Component | Mainland (AED) | Free Zones (AED) | Notes |
|---|---|---|---|
| License Fees | Varies by license type and activities | ||
| – Commercial License | 24,500 | From 12,500 | |
| – Professional License | Starts at 9,950 | 12,500–50,000 | |
| – Industrial License | 25,000 | – | |
| – General Trading License | 12,500–15,000 | – | |
| Initial Approval Fees | 220–420 | Varies | |
| Trade Name Reservation | 620–720 | Varies | Premium names may cost more |
| Business Activity Fees | 150–500 per activity | Varies | |
| Office Rent | Variable (avg. 34,189) | Varies (flexi-desks available) | Mainland requires physical office |
| Notarisation of MoA | 350 | Varies | |
| Document Clearing | 150 per document | Varies | |
| Visa Fees | Initial: 5,000 | Varies | Per employee: 3,000–6,000 |
| Sponsorship Fees | 6,000 | Not required | Mainland only |
| Trademark Registration | 620 | Varies | Optional |
| Knowledge & Innovation Dirham | 10 each | Varies | |
| Total Cost Range | 15,000–50,000 | 10,000–50,000 | Depends on setup type and activities |
Additional Considerations
- Timeframe: The process typically takes 3 days to 4 weeks, with Free Zones often faster due to streamlined procedures. Complex setups or additional approvals may extend this timeline.
- Mainland vs. Free Zone:
- Mainland: Higher costs but full local market access. Recent laws allow 100% foreign ownership for many activities, reducing the need for local sponsors (Invest in Dubai).
- Free Zone: Lower initial costs and tax exemptions but requires a distributor for local trading. Check specific Free Zone regulations (UAE Free Zones).
- Consultants: Hiring a business setup consultant can simplify the process, especially for first-time entrepreneurs. Expect additional consultancy fees.
- Renewal: Trade licenses are valid for one year. Renewal costs are similar to initial fees, and late renewals incur fines starting at AED 250 (DED Renewal).
