Dubai is a hotspot for business, and more importantly for international trade. It has become one of the fastest-growing economies in the world, yet there are still some challenges to starting a business here. If you’re considering launching your own company or expanding an existing one to Dubai, this blog post will help answer any questions you have about what permits and licenses are needed to start up in this booming city.
Dubai has three distinct types of business licenses: First, there’s the “Establishment License” for foreign-owned or foreign-invested companies wanting to establish a base in the Emirate. As a second option, you can apply for a Provisional Trading License to import goods into the UAE for a limited time. The third is the Commercial License which will allow you to start a business in Dubai.
First of all, there are 5 categories of licenses:
This license is for companies that have foreign ownership or investment capital of at least 50% from abroad and want to establish their base in Dubai.
This permit is issued to individuals that will be working for a company that has obtained a commercial license.
Provisional Trading License (short-term import)
This license is for businesses and corporations that need temporary cover while importing goods into the UAE markets. It needs to be renewed every year, or you can convert it into a Commercial License.
The company must have a valid commercial license to apply for this one. Also, items should not be re-exported before clearing customs, or the trading privileges will be revoked.
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Commercial License (limited)
This license is required if you want to open a retail store, but not if you’re just selling items online.
You will need to have an active company and you can apply for this license with a deposit of AED10,000 or more in your bank account.
Certificate of Approval (from Chamber)
If you already have a commercial license, you will require an additional certificate if you are trading within the free zones.
This license is required in order to obtain an establishment license.
The Start-up Kit
There are several documents that you will need to prepare and submit before the Commercial License can be issued by Dubai Customs:
Bizfile (online submission form)
This form must be completed and submitted online. It covers a variety of topics such as capital, financial history and ownership. You’ll also need to provide the names of company directors, shareholders and partners.
Get local sponsors – Unless you’re a citizen or resident of the UAE, you will have to find local sponsors in order to obtain a Commercial License.
The sponsor could be your Dubai-based business partner, or it could be a local company or an individual. The sponsor will have to submit an application to become your business partner and this must also be done through Bizfile.
This form must include the following information:
- Your partnership with the Dubai Chamber of Commerce and Industry
- Partner’s date of the partnership
- Names of both companies’ partners
- Date of partnership agreement and date of renewal
Also, these documents must be provided by your partner:
- Chamber verification of their membership.
- Dubai Customs’ original business license for UAE trade.
- Capital or investment in the company.
- Your sponsor must be your partner and not your company.
- Your passport copy to verify that you do not reside in the United Arab Emirates
This is proof of any loans or financial assistance provided by banks and recognized institutions for business purposes. The original copy should be submitted with your application.
A list of suppliers/customers
This should include the names of companies that you are doing business with. The list can be in Excel format and must be certified by Chamber.
Note: Bizfile will not accept your application if it is missing any of these requirements, so make sure to check them all before submitting your application.
The processing period for a Commercial License takes about two weeks and you can check the status by contacting Dubai Customs.
After that, you’ll also need to obtain a trade license from Chamber in order to operate your business. You will have to submit documents such as:
A copy of Commercial License A list of shareholders Proof of source of investment – i.e. evidence that the funds have been deposited to your bank account Copy of the trade license.
All you need is an idea and determination to start a business in Dubai or any other location in the UAE.
Business in Dubai is a long, complex process that must be viewed as a long-term endeavor. If you have any additional questions about making an application or opening a business, you can contact your local Chamber of Commerce or the Department of Economic Development (DED).
The UAE has a thriving economy and is becoming one of the most sought-after locations for international businesses. Nevertheless, doing business here will present its own set of challenges before profits are realized.
Commercial licensing in Dubai is relatively easy, but getting a trade license can be more complicated, as you’ll need to manoeuvre through Chamber procedures. It is worth it to immerse yourself into the UAE culture before embarking on your business adventure, though.
Whether you want to start your own company or expand an existing one, we have all the information you need to get started. If this blog post has given you some food for thought and is convincing enough that Dubai should be your next stop on the entrepreneurial journey, our team of experts are here to help! Contact us today so we can discuss what permits and licenses will work best for your business venture in Dubai.
Also read: 5 major reasons for a packaging business