Because of its flourishing economy and government support, many foreign investors are enticed to start a new business in Dubai.
The expat-friendly city offers ease of trade, massive demand for goods, and proximity to emerging markets, making it a sought-after location for business. However, to be able to establish a smooth-sailing enterprise, one needs to have a valid trade license.
What Is a General Trading License?
A trade license is simply a license that permits entrepreneurs to do business in Dubai. It is issued by the Department of Economic Development (DED). Depending on the nature or category of the enterprise, approval is given by the concerned ministry.
For instance, a financial institution requires permission from the Central Bank of the UAE. An insurance company should seek approval from the Ministry of Finance and Industry. On the other hand, all commercial and industrial agencies must register with the Chamber of Commerce and Industry.
There are three types of trade licenses you can apply for if you are planning on business setup in Dubai:
- Commercial – given to companies performing any commercial trade activity related to goods, commodities, and services. Often issued to merchants, traders, dealers, suppliers, etc.
- Industrial – required for companies that involve manufacturing activities (e.g. textile, food, metals, petroleum products, engines)
- Professional – granted to an individual or group whose work involves using their mental skills and talents. (e.g. marketers, beauty technicians, accountants)
Why Should One Apply for a Trade License?
Obtaining a trade license in Dubai can be of immense advantage to investors. First, it is considered a legal holding structure. Having one entitles you to a tax-free jurisdiction. This means you don’t have to pay taxes on profits, income, or any other amount.
Next, a trade license allows you to trade beyond borders and enjoy low import duty. It also provides easy access to visas for employees and a wide range of banking facilities. A company also gets 100% repatriation of capital.
What are the Steps to Obtain a Trade License?
Obtaining a trade license is easier than you think. The whole process has been made hassle-free by the government. Here are the steps you need to follow:
- Select a trade name and legal structure for your company. Include all your business activities (a maximum of 10).
- Fill up the license application signed by managers or legal representatives.
- Prepare all required documents – Memorandum of Association, attested company name with an approval letter from DED, all shareholders’ details, and tenancy contract
- Submit application and pay all fees
The team at Austria Business Center can make the licensing process even simpler. You have to sit back, relax, and wait a few days for your trade license. They have the knowledge and experience to navigate the legalities for any start-up or business partnership in Dubai.
If you’re looking for an agency to help you with partner sourcing, licensing, and sponsoring, contact Austria Business Center today at +971 4 454 9700. We also offer instant offices, office suites, conference rooms, and more!