Types of Business Licenses in the UAE

To legally register a business and start operating in the UAE, all companies must obtain the appropriate license. Without it, business activities will be deemed illegal. When starting a business, it’s crucial to choose the license that aligns with your company’s activities. Otherwise, the scope of your organization’s operations may be limited, and you could face penalties. In this article, we’ll explore the main types of business licenses in the UAE, their advantages, and the requirements for obtaining them.

Licenses in the UAE: Who Needs Them and Why

Having a business license ensures that your company complies with local laws and regulations while legitimizing its activities. The type of license you need will depend on the nature of your company, the industry you wish to operate in, and the business activities your company will undertake.

For mainland (local) companies, licenses are issued by the Department of Economic Development (DED). Companies registered in free economic zones receive their licenses from the management of those zones. Let’s take a closer look at the different types of licenses available in the UAE.

Commercial License in the UAE

One of the most common licenses for businesses in the Emirates is the commercial license. This license must be registered when engaging in business operations related to buying and selling goods and services. It allows you to operate both within the country and abroad, as long as your base is in the UAE. The geographical scope of operations within the UAE varies depending on the type of company. If it’s a mainland company, the license is valid throughout the country. For a free zone company, it’s only valid within the specific free zone.

Companies that can work with a commercial license include:

  • Real estate agents
  • Logistics companies
  • Organizations involved in import-export activities or any other trading activities
  • Companies that sell or provide dealership services for vehicles.

Such companies can operate in any region of the UAE and sell more than one type of product. You can do business abroad or hire foreign employees. However, the commercial license does limit you to specific goods and services, so it’s essential to determine if this type fits your business sector before making a choice.

Industrial License

If you want to open a business in the UAE’s industrial sector, your company must also hold a license. This license allows its holder to manufacture semi-finished or fully finished products.

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There are several criteria for a business that determines the requirements for obtaining this type of license:

  • The company’s activities are related to the production and manufacturing of specific products.
  • The enterprise engages in the import or export of materials or goods used in the production process.
  • The business is involved in producing and packaging new products from raw materials or creating a final product by combining two or more existing products.

The industrial license is issued by the Department of Economic Development, and a key requirement for obtaining it is having at least one physical warehouse located in the UAE. Additionally, the founder must secure permission from the Chamber of Commerce, the Industrial Registry, and the Ministry of Health. Sometimes, approvals from other authorities may be needed.

In recent years, the UAE government has expanded the privileges for companies holding an industrial license. For instance, the rental terms for industrial spaces are determined solely in the investor’s interest; owners of industrial companies can expect discounts on electricity, water, and other resources, and they can acquire land at subsidized rates or even for free. Loans at reduced rates are available for producing innovative goods, and if a product aims to bolster the national economy, the government will provide financial support for R&D. High-quality products are also prioritized in government procurement.

Types of Licenses for the Tourism Business in the UAE

Besides commercial and industrial sectors, the tourism industry is flourishing in the Emirates. Millions of people visit the UAE every year, with Dubai attracting tourists from around the world with its top-notch resorts, unique attractions, and exceptional services. To manage hotels, restaurants, travel agencies, and provide services in this area, a tourism license is required. This license is issued by the Department of Economic Development and the Department of Tourism. It’s also necessary for companies providing transportation services or car rentals.

Tourism licenses are divided into subtypes based on the area of activity:

  • For working with tourists within the city (Inbound Tour Operator License)
  • For outbound tourism (Outbound Tourism License). This allows businesses to sell tour packages outside the UAE, including for foreigners, covering all necessary business activities.
  • For guides and tour leaders (Tour Guide License)

E-Commerce License

The online retail market is attracting a growing number of entrepreneurs today. The Dubai government, anticipating this trend, took initiative: since 2017, the Department of Economic Development has been issuing special licenses for online retailers.

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Individual entrepreneurs and private individuals can obtain this license to sell services and products through the internet and social media. A physical office is not required to conduct e-commerce. To apply, you need to open a trade account through the Department of Economic Development.

Professional License

Entrepreneurs in the UAE whose activities focus on providing services need a professional license. It allows you to offer specialized services based on professional skills, such as decorative arts or services in the arts.

The main advantage of a professional license is the possibility of 100% ownership of the business. This means the entrepreneur automatically gains the right to operate as a sole proprietor. A key requirement for obtaining a professional license is confirming the relevant qualifications, and sometimes additional training may be needed.

Technical Services License

The technical services license covers:

  • Air conditioning maintenance
  • Installation work
  • Cleaning services for businesses, and more.

Freelance Permit

Freelancing has gained significant popularity in recent years. Just a few years ago, freelancing wasn’t recognized in the UAE. However, this form of entrepreneurship is now allowed. To work as a freelancer in Dubai, you need a visa and a work permit.

Freelance permits are available in various free economic zones in Dubai, including:

  • Dubai Media City
  • Dubai Studio City
  • Dubai Production City
  • Dubai Knowledge Park
  • Dubai Design District, among others.

The cost and conditions for obtaining a freelance visa vary. This category includes activities such as software development and database management, music, journalism, film activities, coaching services, and more.

General Trading License

A simple commercial activity license is meant for just one category of products in the industry. A general trading license is more flexible. Its primary advantage is the ability to continually expand the scope of activities and engage in business in various sectors. This type of license also doesn’t limit the company in terms of the number of hired employees and work visas. It applies to all goods within and outside the UAE, with exceptions for items requiring special permits, like medical products. Please click here to find out about the least expensive free-trade license in the UAE.

There are other types of licenses in the UAE but what makes the country different from many other countries is the fact that any business must have a license to conduct legal operations in the UAE. 

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