Mainland Licenses
The basic requirement for all mainland business activities in the UAE is to have a licencse in one of these categories.
Just like many places around the globe, entrepreneurs and companies must obtain a trade license to validate their mainalnd company as a legal entity in the United Arab Emirates. This trade license must be granted before commencing business activity. This applies in both free zone jurisdictions and Mainland Dubai. Having a trade license in Duabi ascertains your customers that you are a legitimate business that complies with local laws and regulations.
Whilst there are many steps to get your business registered in the mainland, obtaining a trade license in Dubai is the most crucial to business setup.
When starting a new business in the UAE, you need to acquire the right trade license to ensure that your mainland company is set up properly for the long-term. The type of business activities, company structure and jurisdiction where you will operate can affect the type of trade license you need to acquire and the requirements applicable to you.
Below are the three types of trade licenses that you need to consider as you begin the company formation process and start a mainland business in Dubai:
Types of mainland trade license
Professional trade license
The UAE government requires businesses and entrepreneurs to obtain a professional business trade license from the Department of Economic Development (DED) before they can be authorised to provide their professional services to clients from the Dubai mainland.
The purpose of professional licensing is to establish that the person or business is qualified to provide services in a certain profession. Issuance of these licenses generally requires the applicant to show certain skills or training.
All professionals, specialists, craftsmen and artisans need to acquire a professional trade license to set up a mainland company in Dubai.
When dealing with mainland company formation in Dubai, there are several company structures that can be formed with a professional license: A Limited Liability Company where a local sponsor holds 51% of the company; and a Civil Company and a Sole Establishment where the foreign investor(s) have 100% ownership of their company.
However, in setting up a Civil Company or a Sole Establishment, a UAE national must be appointed as a local service agent (LSA) to complete the legal formalities.
Commercial trade license
Mainland companies dealing with buying and selling of goods and commodities, or any kind of trade activities, require a commercial trade license to operate in the UAE. This business license can be used to form a limited liability company (LLC) or set up a sole establishment, and it can be used for both specialised trading and general trading activities in the UAE.
There are different types of commercial trade licenses in the UAE. If you are navigating the process of company formation, you must apply for the correct type of commercial trade license that will permit you to carry out trading activities specific to your business.
Broadcast and communications companies, rental transportation services, retail companies, construction companies, healthcare businesses, real estate businesses, and other general trading entities also need to apply for a commercial trade license in Dubai.
Industrial trade license
Businesses that want to conduct industrial or manufacturing-based activities in the UAE must acquire an industrial trade license, which will allow them to engage in activities related to converting natural materials or incorporating natural resources into their end products.
This business license is issued by the DED but additional approvals might be required from the Ministry of Finance, Ministry of Economy, the Ministry of Energy and Infrastructure and other authorities, depending on the industrial activity involved.
Requirements to obtain a UAE trade license
When applying for a mainland license in Dubai you must do so through the Dubai Economic Department.
Before opening any business with the Dubai Economic Department, one must meet the following legal requirements to obtain a trade license in the UAE:
- Determine the business category – whether it is professional, commercial, or industrial;
- Determine the type of business activity;
- Determine the legal structure of the business entity; and
- Determine the trade name of your business.
- The local department of economic development registers your trade name
- The Ministry of Economy registers your trademark (if applicable).
Depending on the legal form of a business, it is also a requirement to complete and sign a Memorandum of association (MoA) or a local service agent agreement (LSA). The memorandum of association is required for the following business legal forms:
- Limited partnership
- Public joint stock company (PJSC)
- Limited liability company (LLC)
- Private joint stock company (PrJSC)
Get expert help in starting your new business in Dubai
It can be difficult to identify all of the licenses and permits that apply to your business on the Dubai mainland. Hence, it’s always best to consult a business setup specialist to make sure you comply with the licensing and regulatory requirements applicable to your business activity.
As the leading corporate service provider in the UAE, GO GULF can help you start your company with the right Dubai mainland license, ensuring you are positioned for future growth and success. GO GULF also provides value-added business support services that can help your company start strong and thrive in a competitive market.
Do you need help in choosing a trade license for your business? Contact us today so our team can assist you.