Trade License in UAE: Everything You Need to Know

According to recent statistics, the United Arab Emirates (UAE) has witnessed a surge in new business registrations, solidifying its status as a global business giant. If you’re an entrepreneur looking to start a business in the UAE, understanding the process, costs, and benefits of obtaining a trade license is imperative.

In this blog, we will explore the various types of trade licenses, the step-by-step process to obtain one, and the benefits of setting up a business in the UAE. We will also answer a frequently asked question: How much is a trade license in UAE?

What Is a Trade License in UAE?

A trade license in the UAE is an official document issued by the Department of Economic Development (DED) or relevant free zone authorities. It grants businesses the legal right to operate within specified activities. This licensing system ensures regulatory compliance and promotes a structured business environment.

Types of Trade Licenses in the UAE

The UAE offers various types of trade licenses, each tailored to specific business activities:

1. Commercial License: Required for businesses engaged in trading activities, including import, export, and distribution of goods.
2. Professional License: Issued to service-oriented businesses such as consultancy firms, freelancers, and artisans.
3. Industrial License: Designed for businesses involved in manufacturing, production, and industrial activities.
4. Tourism License: This is required for travel and tourism-related businesses, including tour operators and hospitality services.

How Much Is a Trade License in UAE?

The cost of obtaining a trade license in the UAE varies depending on several factors, including the type of license, business activity, and location. On average, the cost ranges between AED 10,000 and AED 50,000.

For example, setting up a business in a free zone may be more cost-effective, with licenses starting as low as AED 11,900 in Ajman Free Zone. However, mainland businesses might require additional approvals, increasing the total cost. Factors such as office space, visa applications, and government approvals also contribute to the final expenses.

Steps to Obtain a Trade License in the UAE

Setting up a business in the UAE requires following a structured process to ensure compliance with regulatory authorities. Here’s a step-by-step guide:

1. Determine Business Activity: Clearly define the nature of your business, as this will influence the type of license required.
2. Choose a Legal Structure: Decide on the legal form of your business, such as a sole proprietorship, limited liability company (LLC), or branch of a foreign company.
3. Select a Business Name: Choose a unique trade name that complies with the UAE’s naming conventions and obtain approval from the relevant authorities.
4. Apply for Initial Approval: Submit an application to the DED or relevant free zone authority to obtain initial approval for your business activities.
5. Lease Business Premises: Secure a physical office space or facility that meets the requirements of your chosen business activity.
6. Prepare and Submit Documents: Compile necessary documents, including the Memorandum of Association (MOA), lease agreement, and other required certifications.
7. Obtain Approvals from Relevant Authorities: Some business activities may require additional approvals from specific government departments.
8. Pay Fees and Obtain a License: Settle the applicable fees to receive your trade license, officially authorizing your business operations.

Trade License in the UAE: Mainland vs. Free Zones

When obtaining a trade license in the UAE, businesses must choose between mainland and free zone setups. Each option has its advantages:

Mainland Business Setup

• Allows companies to operate directly within the UAE market and secure government contracts.
• Recent legislative changes permit 100% foreign ownership in certain sectors.
• It requires physical office space and additional regulatory approvals.

Free Zone Business Setup

• Offers benefits like 100% foreign ownership, tax exemptions, and simplified import/export procedures.
• No requirement for a local sponsor.
• Ideal for businesses targeting international trade rather than local UAE markets.

Benefits of Obtaining a Trade License in the UAE

Acquiring a trade license in the UAE offers numerous advantages, making the country an attractive destination for business owners. Here are some key benefits:

• Tax Benefits: The UAE offers a favorable tax regime, including 0% personal and corporate income tax in free zones.
• Ease of Doing Business: With streamlined procedures, digital registration systems, and government support, business setup is faster and more efficient.
• World-Class Infrastructure: From modern office spaces to excellent logistics and transportation networks, the UAE provides an optimal business environment.
• Access to a Skilled Workforce: The UAE attracts talent from around the world, providing businesses with a diverse and skilled workforce.
• Strong Legal Framework: The UAE ensures business-friendly policies and regulatory support for investors and entrepreneurs.

Get Your Trade License in UAE with G12

We hope that we answered your question about how much is a trade license in UAE.

At G12, we specialize in guiding businesses through the company formation process in the UAE. With years of experience, our team of experts provides end-to-end services, including business registration, licensing, visa processing, and advisory support.

Our commitment to speed, efficiency, and unbeatable prices ensures that you get the best value when setting up your business.