A trade license is an essential certificate to launch a business in the UAE. Every license type is well-defined and self-explanatory that tell what activities can be conducted under them. Therefore, before you plan to initiate your company formation and business setup process, you must first apply for a trade license. Read on to know more.
It is an essential document when you have decided to start a business in the UAE. The UAE economic departments issue the license. However, procedures of license issuance vary in every emirate. Suppose you fail to produce a license when you initiate the business setup process; you are disqualified or may even be penalised and barred from doing business even in the future. The three main licenses in the UAE are- industrial, commercial, and professional. However, the government issues various other licenses too to conduct business specific to certain activities. Therefore, ensure you know what action you are planning to engage in to make the process smoother and hassle-free.
Various Trade License Types in the United Arab Emirates:
Different trade/business activity requires a different types of trade license in Dubai (UAE). Below we will try to understand what are the different licenses and what business activities can be conducted under them.
1. Commercial licenses
Companies dealing in any commercial trade activity in the UAE are given a commercial trade license. The activities can be related to goods, commodities and services. So, before you apply for a commercial license, you must decide upon the activities you plan to conduct.
Some of the business activities covered under commercial license are real estate brokerage, logistics, and car rental. The tertiary and the main activity together should be 10 per license to the maximum.
2. Industrial License
Companies that deal in industrial and manufacturing activities in the UAE need industrial licenses. The industrial license allows companies to assemble and process goods and products using raw materials that are local or imported. Below listed are the manufacturing sectors where you can invest after obtaining an industrial license:
- Equipment and engines
- Petroleum products
3. Professional license
Professional licenses are for individuals and companies who plan to engage in a profession they are skilled in. It depends on their educational qualification. Some of the covered activities under this license are consultancy services, teaching, artisanship, carpentry, designing, printing and publishing, medical services, computer graphic, repair services, beauty salons, security services, and many more. A professional license gives foreign investors 100% ownership of their business.
4. Tourism License
A tourism license authorises an investor to invest in tourism activities such as hotel renting, tourism guide tourism camps, cruise rentals, yacht rentals, restaurants, cafes, guest houses, travel agencies and more.
5. Agriculture License
People who engage in activities like cultivation and harvesting of crops, trading of pesticides, fertilisers, crops etc., installation of greenhouses, horticulture and those who provide consultancy in agricultural and related services must obtain an agriculture license.
6. Craftsmanship License
A craftsmanship license is necessary for individuals occupied in plumbing, carpentry, masonry, electrical work and more. In addition, companies employing artisans to work for them need to apply for a license.
Obtaining a trade license is one of the crucial steps an investor should accomplish to start a business in the United Arab Emirates (UAE). Conducting business in the UAE without a license is illegal. You will be charged with a hefty amount as a fine and can be even barred from engaging in any trade activity if found running a business without a licence. Moreover, trade license holders/companies need to renew their licenses every year to avoid penalties. Hire a business setup, company formation and a trade licensing company for professional assistance in the process.