Dubai Trade License

Free Zone License

A free zone license is issued by Dubai’s numerous free zones, designed to encourage investment and trade by offering businesses unique benefits and incentives. These licenses are ideal for companies looking to operate within specific free zone areas and cater to international markets. Key Features of Free Zone License:

• 100% Foreign Ownership: Businesses can enjoy full ownership without the need for a local sponsor
• Tax Benefits: Free zones offer corporate tax benefits, and zero personal income tax
• Easy Setup: Simplified registration processes and lower setup costs make it attractive for startups and SMEs.
• Specialised Zones: Each free zone caters to specific industries, such as technology, healthcare, media, or logistics, providing sector-focused infrastructure and support.

Popular Free Zones in Dubai:

• Dubai Multi Commodities Centre (DMCC)
• Dubai Internet City (DIC)
• Jebel Ali Free Zone (JAFZA)
• Dubai Media City (DMC)

A free zone license is an excellent option for businesses focused on international operations, offering flexibility, cost-effectiveness, and industry-specific benefits. It’s particularly suited for companies seeking an export-orien ted or service-driven business model.

Benefits of Getting a Dubai Trade License

Getting a Dubai trade license offers numerous advantages that go beyond legal compliance. It establishes your business as a credible entity, opens up new opportunities, and ensures smooth operations in Dubai’s thriving economy. Below are the key benefits explained in detail:

Tax Benefits

One of the most significant advantages of having a Dubai trade license is the attractive tax regime. Businesses in Dubai benefit from:

• Low Corporate Tax: Companies in Dubai have to pay corporate tax at a low rate of 9%if they are earning revenue above a certain threshold.
• No Personal Income Tax: The UAE, unlike many European nations, does not impose personal income tax.

Legal Compliance and Avoiding Penalties

Operating without a valid trade license in Dubai can result in hefty fines and penalties. A trade license ensures:

• Full Legal Compliance: Your business adheres to Dubai’s regulations, safeguarding against disruptions.
• Avoidance of Penalties: Renewing and maintaining your license prevents fines and ensures uninterrupted operations. Businesses can focus on growth without the risk of legal complications by obtaining a trade license.

Enhanced Business Credibility

A Dubai trade license establishes trust and credibility among clients, suppliers, and investors by:

• Boosting Professional Image: Demonstrating that your business is officially recognized and legally compliant.
• Attracting Partnerships: Licensed businesses are more likely to secure collaborations and partnerships with reputable entities. Credibility is a crucial factor in building a solid reputation in Dubai’s competitive business environment.

Access to Government Services and Banking Facilities

A valid trade license unlocks access to essential services, including:

• Bank Account Opening: Allows businesses to open corporate bank accounts with leading financial institutions in the UAE.
• Government Services: Enables businesses to apply for permits, licenses, and other approvals seamlessly. These facilities are vital for streamlining operations and managing finances efficiently.

Ability to Sponsor Employees and Family Members

With a trade license, businesses and individuals gain the ability to sponsor:

• Employees: Hire and sponsor employees for work visas to meet operational needs.
• Family Members: Entrepreneurs and business owners can sponsor their dependents, enhancing their quality of life in Dubai. This sponsorship capability provides flexibility and convenience for businesses and their teams.

Local and International Trade

A trade license allows businesses to engage in both local and international markets, offering:

• Access to a Global Market: Especially beneficial for free zone and mainland businesses targeting international trade.
• Local Market Operations: Mainland trade licenses enable businesses to operate freely across the UAE. This dual access expands the scope for growth and profitability, making Dubai a strategic hub for trade and commerce.

The benefits of a Dubai trade license extend beyond operational legality, offering significant financial, professional, and strategic advantages for businesses of all sizes.

How to Get a Trade License in Dubai?

Acquiring a trade license in Dubai involves several steps to ensure your business is legally established and ready to operate. Here’s a detailed breakdown of the process:

For Free Zone Companies

1.Determine the legal structure

The legal structure of a free zone is decided mainly by the number of shareholders and the type of liability. E.g. Branch, FZE, and FZ LLC.

2.Select your business activity

Based on the type of business you wish to undertake, you can select the appropriate activities from the ones permitted by the free zone.

3.Select the type of office space

Based on your requirements, you may choose a virtual or a physical office space at the free zone.

4.Secure pre-approvals

If your business activity requires, you may have to obtain pre-approvals from relevant government bodies. Sometimes, these approvals are secured after license issuance and in this case, the process is called post-approval.

5.Apply for a license

Based on your business activity, you can apply for the appropriate license type along with the required documents.

6.License Issuance

Once your application is approved, the license is issued. Virtual lease agreement is issued for flexi-desk, and a lease agreement is issued for private offices. Note: Please remember that the process may vary for each free zone.

For Mainland Companies

1. Trade name registration

The trade name must be registered with the economic department of the relevant emirate. Your trade name must adhere to certain naming conventions laid down by the economic department of the respective emirate. Below are some naming rules that are common across economic departments of all the seven emirates. The trade name must:

• Have a suffix indicating the legal form of the company. For example, a limited liability company’s trade name will end with ‘LLC’.
• Be as per the company’s legal form as well as the business activity to be undertaken.
• Not have any religious names or names of any government bodies.
• Not include only the last name of the owner. Both, the first and the last name of the individual may be included.
• Be unique and not the same as any other previously registered trade name.
• Not contain names of any country unless permitted by the respective embassy.

2. Initial approval

An initial approval must be sought to ensure the government does not object to the setting up of your business from the Department of Economic Development (DED) of the relevant emirate. Some business activities may require additional approvals from other government bodies before filing the application for the initial approval (pre-approval).

3. MOA preparation

Based on the legal structure of your business, a Memorandum of Association (MOA) is required. As an example, an LLC company requires an MoA. MoAs are drafted by local law firms, notary public, and courts.

4. Rental agreement issuance

A rental agreement must be obtained from the land department of the relevant emirate. The same is then submitted to the economic department of the emirate for obtaining the business license.

5. External approvals

Certain business activities require additional approvals from government bodies overseeing that industry sector. For instance, a legal consultancy/law firm may need an approval from the Ministry of Justice, each activity has different conditions towards the approval if it should be (Pre-Post) Approval,

6. Business license issuance

After completing the aforementioned steps, the following documents must be collected and submitted to the Economic Department of the relevant emirate for the business license to be issued:

1. Trade Name Registration Certificate
2. Initial approval receipt
3. Commercial tenancy contract registered in Land Department System of the relevant emirate
4. Duly attested MoA
5. External approvals from other government bodies (If Required)

How Long Does it Take to Get a Trade License in Dubai?

The exact timeframe may vary depending on factors such as the type of license, business activity, and the approvals required. Key Factors Influencing the Timeline:

• Additional Approvals: Some business activities, such as healthcare or education, may require external approvals from regulatory bodies, which may extend the timeframe.
• Document Submission: Timely submission of all required documents, such as passport copies, visa details, and a completed application, ensures faster processing.
• Free Zone vs Mainland: Free zone and mainland jurisdictions have their own timeframe to issue the license.
• Business Setup Consultants: Engaging professional consultants can help streamline the process, ensuring compliance and reducing delays.

By preparing all necessary documentation in advance and choosing the right setup approach, businesses can obtain their Dubai trade license quickly and efficiently, minimising downtime and enabling faster entry into the market.

Get Your Trade License in Dubai with InZone

Navigating the process of obtaining a Dubai Trade License can be complex, but with InZone, it’s seamless and hassle-free. As a trusted partner for business setup in Dubai, InZone offers end-to-end support to help you establish your business efficiently.

• Expert Guidance: InZone’s experienced consultants ensure you choose the right license type for your business activities and goals.
• Streamlined Processes: From documentation to approvals, InZone handles every step of the trade license application process, saving you time and effort.
• strong>Cost Transparency: Get clear and competitive pricing with no hidden fees, helping you plan your business setup expenses effectively.
• Custom Solutions: InZone tailors its services to meet your unique business requirements, whether you’re a startup, SME, or large enterprise.
• Post-License Support: InZone goes beyond just helping you secure your license by offering ongoing support for renewals, visas, and more.

How InZone Can Help You?

Get expert advice on the most suitable license type, whether mainland or free zone. InZone manages all paperwork and ensures compliance with Dubai’s regulations. Benefit from expedited processes to get your license approved quickly. Access value-added services like visa processing and banking assistance. With InZone, you can focus on growing your business while leaving the complexities of licensing and setup to the experts. Start your journey today and unlock Dubai’s unparalleled business opportunities with confidence!