What type of license business you need in Dubai? Commercial, Professional & Industrial?Author businessconsultantsdubai
One of the key steps for company registration in Dubai is the procurement of business license. Business license will authorize you to conduct your business in the specified jurisdiction. Generally, there are three kinds of business licenses that you can apply for in Dubai, depending upon the nature of your business activity.
- Commercial License
- Industrial License
- Professional License
1. Commercial License
Commercial license is issued to a business entity looking to engage in buying and selling of goods (commonly referred to as trade) in Dubai. Department of Economic Development (DED) deals with the issuance of business license in Dubai. They have provided a list of business activities that are listed under each Commercial/Industrial/Professional activity. If your business falls under commercial activity, you will be issued a commercial license by DED.
- If you are planning to trade in Dubai and UAE markets, an ideal choice would be to setup your commercial license company as Limited Liability Company (LLC). In Dubai LLC, 51% of shares will be owned by a local sponsor who must be UAE national and rest of 49% shares will be owned by foreign investor. The 51-49% minimum shareholding rule is mandatory by law.
- If you are planning to import or export goods outside UAE, you can also opt for commercial license within a free zone in Dubai. The major benefit of setting up free zone company is that you get complete ownership of your business. However, if a free zone company wants to sell goods within UAE, it must hire a distributor who will look after the invoicing taking place between you and your clients in UAE.
- You can also setup your commercial license company as branch of a foreign company in Dubai and UAE and get 100% ownership.
2. Industrial License
Industrial license is used to those companies looking to engage in manufacturing activities. These activities include converting natural resources or transformation of raw materials. The transformation can be with respect to structure, appearance or conversion of semi-manufactured product into a complete manufactured one. The process can be carried out via mechanical means or by manually separating, filling, integrating or packaging products.
- Formation of industrial licensed company requires local sponsor who must hold 51% of shares and rest 49% are open for foreign ownership.
- This form of company requires a physical office inside UAE. DED does not allow virtual office facility to industrial licensed holders. Therefore, you must go through extensive research and preliminary analysis before going for this license.
3. Professional license
Professional License is issued to service providing companies, professionals, artisans, and craftsmen.
- You can setup professional licensed company in Dubai with complete ownership.
- However, you will require a local service agent who must be UAE National. The role of LSA is restricted to assist in acquiring business license, visas etc. and will have no direct involvement in your business. LSA will be paid a fixed annual fee.
- Minimum capital requirement is not required for professional licensed company in Dubai.
As mentioned before, the Department of Economic Development (DED), Dubai is the government authority responsible for issuance of business license in Dubai. However, some businesses require additional approvals and clearances. These include,
- Banks require approval from Central bank of UAE
- Insurance and other related companies require approval from Ministry of economy and Commerce
- Pharmaceutical companies require approval from ministry of Health
- Industrial companies require additional approval from Dubai municipality and different government ministries.
- Manufacturing firms require approval from Ministry of Finance
In general, business registration in Dubai requires approval from Dubai Chamber of Commerce and Industry. If you want more information on the requirements to obtain trade license in UAE, KWS Middle East has mentioned out the key points in their article requirements of business trade license in Dubai.
Hire a Professional Consultant Company
In Dubai, government policies and regulations for businesses are continuously modified for the benefit of foreign investors and to meet the international standards. For business setup in Dubai, you will have to follow a systematic procedure to obtain license from DED.
For a smooth start of your business, we highly recommend hiring a business setup consultant agency in Dubai such as Business Consultants Dubai. We have complete know how of the fee structure and government compliance requirements. Our experienced team will assist you in registration of your company as well as provide complete business formation services.