Commercial vs. professional trade licences in Dubai: Explained

Businesses thrive in the United Arab Emirates, and entrepreneurs establish themselves as household names. New-age investors, fledgling entrepreneurs, and experienced company owners – they may all find a home in the United Arab Emirates for their respective businesses. To establish a company in the UAE, whether in a free trade zone or on the mainland, you must first get a legal licence from the government. The Commercial Companies Act of the United Arab Emirates is also applied to your business, which makes it subject to its legal control.

The Department of Economic Development is responsible for issuing commercial trade licences and professional business licences to qualified individuals (DED). Due to the UAE government’s desire to establish the nation as a top commercial centre, you will get sufficient legal assistance from them. For this reason, this article distinguishes between the two legal licences so that you can choose which kind of licence you need to get for your company.

What is a commercial trade licence, and how does it work?

If you want to sell physical goods in Dubai, you must first get a commercial trade licence from the government. Activities ranging from general trade to commodity sales, electronic trading to real estate development are all possible.

An international business trade licence allows a foreign trader to legally possess up to 49 percent of the total shares in his or her company. The remaining 49 percent of the company is owned by a local service agency or a citizen of the United Arab Emirates. As a result of their partnership with a UAE citizen to establish a Limited Liability Company, the owners have limited obligations and responsibilities (LLC).

Obtaining a business licence has a number of advantages.

Take advantage of tax breaks and unfettered repatriation of capital gains (applicable in certain free trade zones)
Renewal of a business licence without the need for an audit
Permission to carry out 10 distinct business activities (including the main activity) under the same licence is granted by the government.
Engagement with the DED that is dependable
Possibility of participating in a variety of foreign trade operations
What is the procedure for obtaining a business licence?

The DED must be contacted in order for the mainland businesses to apply for a trading licence. Business licencing is handled by the various Free Zone Authorities for establishments located inside their respective free zones.

To apply for a commercial licence in Dubai, you must first choose your company type from a list given by the Dubai Economic Department or the Free Zone Authority. It is necessary to legalise the business structure, which includes the list of owners as well as the jurisdiction in which you want to operate your company.

Finalize a trade name for your business that complies with all applicable regulatory regulations. Continue to wait for the first permission from the appropriate authorities.

If all of your papers are in order, you may get your company trade licence in Dubai within three days if everything is in order. If there is a problem with the paperwork, the procedure may take several weeks to complete. Engage the services of a legal adviser in Dubai to help you get the licence in a single transaction.

Documents needed in order to get a business licence

Form for submitting an application
Copies of each shareholder’s passport who is legally connected with your company A detailed explanation of your business strategy and activities
Certificate of financial statement as a source of reference (minimum 2 years)
The sponsor’s NOC (No Objection Certificate) is required.
A letter of intent is a formal declaration of purpose.
Registration Identification Form with notarized signature
Latest picture of either the company director or the manager (size of a passport).
Specifics on the shared capital

What is a professional business licence, and how does it work?

In order to start a professional business in Dubai (a service-based company), you must first get a professional business licence from the Dubai Civil Aviation Authority. The list covers a wide range of consulting services, software enterprises, accounting services, medical reps, beauty salons, and other similar businesses.

This legal licence applies to any exchange or transaction involving the provision of a service that is based on a particular skill set or level of expertise. The expat will be entitled to 100 percent ownership of the licence and will be regarded the only proprietor of the business.

The advantages of obtaining a professional licence are many.

The company is owned entirely by foreigners.
Businesses are permitted to apply for UAE visas for workers, acquire labour quotas, and provide translation services, among other things.
It is the best option for professionals, SMEs, and multinational corporations since it helps them in establishing a corporate bank account.
There are no extra taxes (either personal or corporate) on your earnings.
Under the supervision of the DED, company operations may run smoothly and securely.
The process of renewing a licence is simple, and it is done at a low cost.
What is the process for obtaining a professional licence?

In order to apply for a professional licence in the United Arab Emirates, you must provide a comprehensive description of the activities carried out by your business.

You will need the assistance of a Wakeel e Khidmat (a local service agent/citizen) who will assist you in obtaining the licence without exposing you to any legal responsibility in the course of your company. After submitting an application for a professional licence with the DED, you will get an initial acceptance.

You must also reserve a business name (for which there is a fee) and then submit the necessary paperwork to the Department of Economic Development (DED) for approval.

Legal experts in Dubai assist you in obtaining a licence by taking care of all of the paperwork and other related documents for you.

A list of the documents needed to get a professional licence.

Application for obtaining a professional licence is completed using this form.
Copies of passports are required (owner and all other partners)
A copy of the Local Partners’ Naturalization Book is available upon request (Jinsiya)
If the expatriate is already on a work visa, the foreign partners’ sponsors must sign a No Objection Certificate before the partnership may proceed. Obtaining the shareholder’s UID number is necessary if the shareholder is visiting on a visitor visa.
Registration with the appropriate authorities, depending on the kind of business activity to be carried out; ejari registration; rental contract; certificate of name registration; and other related documents.