Commercial License – privatewolf.ae

Guide to Obtaining a
Commercial License in UAE

Simplify the process with our expert business setup consultants

Everything You Need to Get a Commercial License in Dubai, UAE

Foreign investors looking to establish a business in Dubai mainland must acquire a trade license for their chosen activity. The Department of Economic Development (DED), the licensing authority for mainland businesses, issues three types of trade licenses: Professional, Commercial, and Industrial. Depending on the nature of their business, investors must select the appropriate license.

If you intend to engage in trading activities in Dubai, obtaining a Commercial License from the DED is essential. The Commercial License is highly sought after by entrepreneurs as it allows them to conduct trading operations in the lucrative UAE and Middle East market. Unlike a free zone Commercial License, a mainland license enables traders to operate anywhere in the UAE without restrictions. To simplify the process of acquiring a Commercial License, entrepreneurs can seek the assistance of business setup consultants in Dubai.

Activities Permitted by a Commercial License in Dubai

A Commercial License is required for businesses involved in the selling or trading of goods. It permits a wide range of activities, including general trading, electronic trading, and software trading. Retailers, construction companies, and businesses in real estate also need a Commercial License in Dubai. In essence, any business engaged in trading goods, commodities, and services is eligible to apply for a Commercial License.

To provide a glimpse into the activities permitted by a Commercial License issued by the DED, here is an indicative list:

Choosing the Ideal Legal Structure for a Commercial License

Selecting the appropriate legal structure is a crucial aspect of setting up a business in Dubai. The choice of legal structure depends on the number of shareholders and the nature of the business activity. For businesses operating under a Commercial License, a Limited Liability Company (LLC) is the most suitable legal structure.

An LLC can have a maximum of 50 shareholders, and each shareholder’s liability is limited to their respective shares in the company. Previously, an LLC structure required a UAE national with 51% shares (Local Sponsor) and an expatriate shareholder with 49% shares. However, this requirement was eliminated in June 2021. For detailed information on legal structures, entrepreneurs can consult with business setup consultants in Dubai.

Commercial Activities with 100% Ownership

In line with the amendments to the Federal Law No 2 of 2015 on Commercial Companies, the DED now allows 100% foreign ownership for over 1000 commercial activities in Dubai mainland, excluding activities of strategic impact. Investors can refer to the list provided by the DED to explore the specific activities eligible for 100% ownership. Some of the major activities in this category include general trading, supermarkets, wholesale supermarkets, electronic cigarettes and accessories trading, computer systems and communication equipment software trading, and many more.

Benefits of Obtaining a Commercial License in Dubai

Obtaining a Commercial License in Dubai mainland offers entrepreneurs several benefits, including:

Conducting up to 10 activities under a single trade license
Trading in several similar goods under one license
Engaging in internal trading activities such as exports, imports, and re-exports
100% foreign ownership in over 1000 activities
Ease of obtaining employment visas for foreign workers
Ability to hire a large number of foreign employees
Exemption from mandatory auditing for commercial trade license renewal
Streamlined process for obtaining a Commercial License in Dubai

Process of Obtaining a Commercial License in Dubai Mainland

Step 1

Select business activities

Determine the specific trading activities you wish to carry out under your Commercial License. Ensure that your chosen activities are permissible under the DED regulations.

Step 2

Determine an appropriate legal structure

Choose a legal structure for your business. For trading activities under a Commercial License, an LLC is the recommended structure. Consult with business setup consultants in Dubai to understand the legal requirements and options available.

Step 3

Reserve a company name with DED

Choose a unique name for your company and reserve it with the DED. The name should comply with the DED's naming guidelines and should not infringe on any existing trademarks.

Step 4

Obtain DED initial approval

Submit the necessary documents and information to the DED for initial approval. This step involves providing details about the shareholders, the nature of the business, and other relevant information.

Step 5

Sign Memorandum of Association (MoA)

Prepare and sign the Memorandum of Association, which outlines the rights and responsibilities of the shareholders, the capital structure, and other key details of the company.

Step 6

Obtain external approval for special activities

If your business involves special activities that require approval from specific government bodies or ministries, such as trading in oil and gas products, seek the necessary external approvals.

Step 7

Rent an office space or shop

Secure a physical office space or shop in a suitable location within Dubai mainland. The DED requires a physical presence for businesses operating under a Commercial License.

Step 8

Submit documents

Prepare the required documents, including the lease agreement for your office space, external approvals (if applicable), and other supporting documents as per the DED's requirements. Ensure that all documents are complete and accurate.

Step 9

Pay official fees

Pay the necessary fees to the DED for processing your Commercial License application. The fees vary depending on the nature of your business and the number of activities you wish to undertake.

Step 10

Receive Commercial Trade License from DED

Once your application is processed and approved, you will receive your Commercial Trade License from the DED. This license grants you the legal authorization to conduct trading activities in Dubai mainland.

Special Approvals for Commercial License

Certain activities categorized as special activities require additional approvals from government bodies or ministries due to their potential impact on consumer safety or other factors. For example, trading in oil and gas products may require approval from the Dubai court. It is essential to ensure compliance with any special approval requirements specific to your business activities.

Product Certification Requirements

If your Commercial License involves import and distribution activities, it is crucial to assess whether your goods require product certification. The Emirates Authority for Standardisation and Metrology (ESMA) regulates specific products that must be certified before being supplied in the UAE market. Ensure compliance with ESMA standards to avoid rejection or withdrawal of products. Business setup consultants in Dubai can assist with product certification and compliance processes.

Hire the Best Business Setup Consultants in Dubai, UAE

Obtaining a Commercial License in Dubai mainland can be complex, especially when dealing with external approvals, bank account opening, visa processing, and other requirements. Engaging the services of experienced business setup consultants, such as Private Wolf, can streamline the process and ensure a successful license application. Their expertise in UAE immigration laws, labor laws, and business setup procedures can simplify the DED licensing process for foreign investors.