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Dubai is continuing to be the center of international trade in the GCC by attracting investors all over the globe on a massive scale. However, while Dubai is consistently adjusting its policies to make it more flexible to conduct business operations, certain rules are legally mandatory for business and business offices in Dubai to comply with. Failing to do this will not only put your business at risk but even cause you to face legal fines. One such legal requirement is that before commencing any business in Dubai, a foreign investor or business must obtain an appropriate trade license from the department of economic development (DED).

This article will give you an introductory guide on what you need to know about a trade license before operating a business.

What Is It? 

A trade license is a document that legally permits entrepreneurs and investors to do business in Dubai. This license calls for a thorough application process and is issued by the Department of Economic Development (DED). 

DED is the government authority responsible for issuing trade licenses and trade permits, setting rules concerning business hours, and classifying the business activities permitted to be carried out within the mainland of Dubai. 

The application process for obtaining this license will depend on several factors concerning your business. This includes the nature of your business, type of business activities, or category of the business. The licensing process will also require approval by the concerned ministry. 

For example, if your business is a financial institution, then it requires permission from the Central Bank of the UAE, whereas if you’re planning to set up an insurance company, then it will require permission from the Ministry of Finance and Industry.

Types of Trade License in Dubai 

Obtaining an appropriate trading license is the primary step in conducting a business legally in Dubai. Therefore, depending on your business activity, you will have to obtain one of these three trading licenses before operating a business in Dubai. 

Commercial License- This license is required if you’re planning to engage in trading activities. As a holder of this license, you cannot carry out any other activities outside the range of the trade license. A commercial license only allows you to perform any commercial trade activity related to goods, commodities, and services. This license is often issued to merchants, traders, dealers, and suppliers. 

Industrial License- This is a license issued to manufacturing, semi-manufacturing, and industrial companies. You will be required to have a physical business office inside Dubai to be eligible for this license. Businesses that manufacture automobiles, spare parts, textiles, food, metals, appliances, machinery, petroleum products, and engines will require an industrial license. An industrial license will also require special approvals from Dubai Municipality and Planning department. 

Professional License- This license is required if you’re a professional or expert in a specific field of activity. This included professional service providers, craftsmen, and artisans. Obtaining a professional license requires the assistance of a local service agent. These licenses are usually issued based on academic qualification, expertise, and skills. 

We understand that among various trade license options and the different application and approval processes each license type calls for, it can be difficult for you to establish a business in the UAE. This is why at myOffice, a business center in Dubai, we offer a hassle-free company formation process to simplify doing business in Dubai for you. Well-renowned for our serviced offices in Dubai Marina and Downtown Dubai, we offer meeting rooms, co-working spaces, phone and mail management facilities. 

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