In the past two decades, Dubai has ameliorated itself in terms of becoming one of the world’s leading trade and business destinations. It achieved this feat through its government’s consistent and unprecedented commitment to introduce investor friendly laws. As a result, flocks of investors from every corner of the world have relocated here to start their businesses.
That said, it goes without a doubt that obtaining a trade license in mainland Dubai could open the door to a plethora of new opportunities.
Business Setup in Dubai Mainland
The mainland is a popular choice for setting up a company in Dubai. This is because it provides a plethora of benefits and the luxury to operate and trade throughout the Emirate.
The mainland offers businesses more autonomy to trade all over the UAE. However, you will have to sign a Memorandum of Association with a local sponsor and hand over to them, 51% of your company.
If you decide to set up your company in the mainland, then you must obtain a Dubai trade license, which will be issued by the Department of Economic Development (DED).
The following is all you need to know about getting a Dubai trade license in the mainland:
What is a Trade License?
A trade license is a prerequisite that you must fulfill before being able to legally operate your business in the UAE. The system is regulated and watched over by the Department of Economic Development (DED).
Upon of obtainment of a trade license in Dubai, you will have permission to conduct the following:
- Trade goods with other nations (Import and export)
- Participate in a number of different commercial related activities
- Advertise your product and services to the masses
- Take part in different industries such as the restaurant and consultancy business.
Steps for Getting Your Trade License
Now that the importance and role of a trade license have been defined, we can move onto the acquisition aspect. While the following process may seem simple, it can be slightly tedious if you are unfamiliar with the laws and guidelines in the city-state.
The steps below are a short summary of what you need to do.
- Select a name for your company that is in accordance with the government’s rules. This in essence, means that you cannot associate your name with any religious or political body.
- Choose the type of business activity that you plan on carrying out.
- Research different kinds of trade licenses and pick one that meets your requirements.
- Get the application form, fill it in and submit it to the relevant authority for initial approval of your company.
- Gather all relevant documents and paperwork such as application, local sponsor Memorandum of Association (MOA) etc.
- Lease an office space that best suits your needs and obtain a tenancy contract from the owner. (A valid office address is needed to complete the registration process)
- Get your tenancy contract approved by the Dubai Land Department (known locally as Ejari).
- Submit your completed documents and paperwork to the Department of Economic Development (DED).
- Wait for final approval and get your trade license fee voucher
- Pay the trade license fees. The fees will depend on your type of license and business activities
- Apply for residence visa to continue living in the Dubai mainland while you run the business
Required Documents for Trade License Application
During the application process for the Dubai trade license, you will be asked to present the following documents to the DED:
- A Department of Economic Development signed letter which approves the company’s name and business activity.
- The completed application form which has been signed and attested by the company’s legal representative.
- The tenancy contract of your office space.
- Copies of the passports of all stakeholders in the company.
- Memorandum of Association with a local sponsor.
Trade License Fees in Dubai
The Dubai trade license fees will depend on a number of factors, including the nature of your business and type of permit you require.
When setting up your company in the Mainland area of Dubai, you will be liable to a host of costs and fees.
- These charges may include:
- One-time fees for the initial application approval
- Company name approval
- Notarization of the Memorandum of Association with your local sponsor
- External approvals (if required)
Additionally, there is a trade license renewal fee, as well as a separate fee should you choose to have a foreign name.
If you are looking to set up a Limited Liability Company (LLC) in the mainland, a rough estimate of the funds needed would be AED 300,000. It is the minimum share capital required, but, once you have shown the amount and obtained your trade license, you may use the share capital as working capital and incorporate in your operations.
Should you wish to obtain a general trade license, you will be given permission to carry out activities including importing and exporting goods, as well as providing your services in the local market. The first-time trade license fees will be around AED 25,000 and from the second year onwards, it can come down to AED 15,000.
Yearly Additional Fees
With the above-mentioned considered, here are the additional yearly costs you should expect to pay for a commercial trade license in the Dubai mainland.
- Parent company certification fees
- Yearly audit fees
- Auditor fees
- Ministry of Economy registration fees
- Chamber of Commerce registration fees
- Corporate PO Box fees
- PRO services and trade license management fees
These are just some of the fees that you may potentially incur during the initial obtainment of your trade license. However, there may additional and hidden costs that may arise according to the activity, nature of business, and structure of the company that you wish to establish in the Emirate.
Visa Requirement for Business Setup in Dubai
This is the final step that you need to take before being able to start your activities in Dubai. You must apply for a residence visa as it is the official documentation required for you live and work in the Emirate legally.
The Dubai Mainland Residency visa process takes 100 days. So basically, it takes a little over 3 months to complete. Here are the steps:
- Register yourself with the E-channel services for mainland visa acquisition. This is a step that is regulated by the local government.
- In order to activate your entry permit, you will need to get a temporary employment visa which will be valid for 60 days.
- After getting your temporary visa, you may apply for a change of status.
- Get your medical examination done. The process involves being screened for infectious diseases by getting a blood test, as well as getting a chest X-ray. This step is compulsory, and you will receive the results within three days.
- Receive your Emirates ID card, this will be necessary for you to start your corporate or personal bank account. Additionally, it will be required for a number of official uses as well.
- Finally, you get to the visa stamping stage. This consists of getting the visa sticker on your passport. This stage may take up to 15 days.
Upon receiving the stamp in your passport, you may then proceed to apply for the visas of the following;
- Your dependents
- Your family
- Your employees
After this step is complete, you are free to live and operate your business in the Dubai mainland.
Obtain Your Mainland Trade License in Dubai Today
That is practically the final step in obtaining a trade license in Dubai mainland area. While it is a straightforward process, it can be slightly confusing or lengthy if you are not familiar with the rules, regulations and paperwork required. Additionally, if you are new here and cannot speak the language, getting a reliable local sponsor may prove to be a hassle.
Thus, we recommend you enlist the services of a business setup consultancy in Dubai. Their years of experience and familiarity with the legal documentation and requirements should help accelerate the initial set up process. In addition to that, they can also assess and recommend the trade license that best suits your needs
A consultant can also take care of future matters such as trade license renewal. This saves you the time and will allow you to focus on other aspects of your business.
Contact us today for more information on Dubai mainland company setup, trade license acquisition, and more!