The Significance of a Commercial License
A Commercial License is a crucial document that empowers businesses to engage in trade, import, export, and the provision of various services within Dubai and the UAE. Given Dubai’s strategic location, at the crossroads of Africa, Asia, Europe, and the Middle East, obtaining a Commercial License opens doors to local and international trading relationships, making it an appealing option for businesses looking to establish themselves in this dynamic region.
How to Obtain a Commercial License in Dubai
Securing a Commercial License in Dubai is a streamlined process, facilitated by IFZA’s global network of Professional Partners. Here are the detailed steps involved:
Step 1: Choose Between Free Zone or Mainland Setup
The first decision to make is whether to set up your business in a free zone or on the mainland. Weigh the advantages of both options, considering factors such as business support, financial incentives, and available license types. Your choice will depend on your business’s nature and objectives.
Step 2: Select an Appropriate Company Name
Selecting a company name is a critical step in establishing a business in the UAE. The chosen name must adhere to specific naming conventions, avoiding offensive or prohibited language and steering clear of well-known organization names. Ensure the selected name is available for registration.
Step 3: Submission of Your License Application
The final step involves submitting your Commercial License application. If you opt for mainland setup, you can apply directly to the Department of Economy and Tourism (DET). For free zone setup, direct application to the respective Free Zone authority is required. Ensure all required documents are provided, along with proof of payment for the trade license fee.
Throughout this process, IFZA’s global network of Professional Partners is available to offer guidance and support, ensuring a smooth and efficient experience.
Documents Required for a Commercial License in Dubai
The documentation required for obtaining a Commercial License is straightforward:
- Completed application form.
- Passport copy of the proposed owner(s).
- Two recent passport-size color photos.
Obtaining a Commercial License in Dubai Free Zone with IFZA
Setting up a business in a Dubai Free Zone, particularly with IFZA, is a straightforward and efficient process. Here are the key steps:
Step 1: Consultation
Initiate discussions with IFZA’s multinational, multilingual team to outline your business requirements. Determine your license type, desired business activities, visa package, and office solutions.
Step 2: Document Preparation
- Complete the license application form, including Ultimate Beneficial Ownership information.
- Prepare a copy of your passport.
- Submit a digital passport photo.
- Provide Emirates ID and visa copy for UAE residents (if applicable).
Step 3: Registration
IFZA’s support team registers the documents on the registration portal. Upon approval, two e-legal forms are issued, to be signed before receiving incorporation documents.
Step 4: License Issuance
- A soft copy of the commercial license is sent via email.
- The original license copy can be picked up from the IFZA office.
The Renewal Process for a Commercial License
Renewing a Commercial License in Dubai can vary depending on whether it’s in the mainland or a free zone:
- For Dubai Mainland, visit the Dubai Economic Department (DED) website, log in to the eServices portal, review and update your license details, pay the required fees, and receive your renewed license.
- In Dubai Free Zones, get in touch with IFZA Professional Partners to review and update your license details, make the necessary payments, and receive the renewed license.
Specific steps and requirements may differ based on your business type and the Free Zone authority or DET involved.
Benefits of Holding a Commercial License in Dubai
A Commercial License in Dubai brings several advantages, including:
- Tax exemptions and repatriation of income to the foreign investor’s home country.
- Access to foreign trade opportunities, expanding market reach globally.
- Authorization to sell a wide range of goods and services under a single license.
- Simplified work visa acquisition for foreign nationals.
- Facilitated international employee visa admissions.
- Protection against legal and financial risks for trading companies.
- Ability to conduct a minimum of ten business activities under one license.
Other Business Licenses in Dubai
Aside from the Commercial License, Dubai offers various licenses catering to different business types:
- Professional License: For service-oriented businesses, including consultancy, education, and technical services.
- Industrial License: For companies involved in manufacturing and production.
- Tourism License: Required for tourism-related businesses such as hotels, travel agencies, and maritime excursions.
Professional License vs. Commercial License: Key Differences
When deciding between a Professional License and a Commercial License in Dubai, it’s essential to understand their distinctions:
- Business Activity: Professional Licenses are for service-oriented businesses, while Commercial Licenses cover tangible goods and services.
- Ownership Types: Professional License holders can own 100% of their business, while Commercial License ownership in Dubai Mainland is limited to 49% for foreign investors.
- Ownership Liability: Professional License companies have unlimited liability unless they opt for a limited liability structure, whereas Commercial License companies maintain limited liability.
Allowed Business Activities Under a Commercial License in Dubai
Mainland and Free Zone Commercial Licenses in Dubai offer a range of allowed business activities. For Mainland licenses, approval from the Department of Economy and Tourism is required. Free Zone licenses, on the other hand, align with the specific industry focus of the respective Free Zone, providing tailored activities. These activities can include technology, healthcare, and more.