A number of people opt to set up company in Dubai due to several reasons such as ease of doing business, high demands for products, and proximity to new markets in the region. Dubai is also strategically located right in the crossroads of three continents namely Asia, Africa, and Europe. For you to be able to do business in Dubai, you need to acquire a valid trade license from the Department of Economic Development (DED).
The General Trading License
This is the license required for any entrepreneur who intends to start a business in Dubai whether it is in one industry or multiple industries. Some of the activities that are covered by this license are export, trading of goods and products such as clothes, electronic gadgets, furniture, jewelry, and also export. Those who like to operate a wholesale business must have a general trade license. Possessing this license enables you to trade within Dubai and also other Emirates. Some products are also regulated such as pharmaceutical products, frozen goods, and alcoholic beverages. These would require approval from the authority agency in charge of them.
An entrepreneur has a lot of opportunities to trade in local, national, and international markets. There are 3 major options for an entrepreneur to set up business in Dubai: mainland, offshore, and free zones. All of these types of companies have their own advantages and disadvantages. It’s up to the entrepreneur to decide based on his particular nature of business.
How to Obtain a General Trading License
You need to choose an appropriate trade name and the legal structure for the company.
- You also have to decide on all the business activities that are included in the license which is a maximum of 10 per license.
- You have to fill in and submit the application for initial approval.
- You may get external approvals if needed by some of your business activities.
- It is significant to arrange all the required documents such as the MOA and all the documents approved by designated government authorities.
- Decide on the location of your business and acquire a tenancy contract.
- Submit the application to the DED to acquire the final license.
- Pay the license, including an issuance fee.
To acquire a valid license from a free zone or offshore, it is necessary to submit the original documents to the Commercial Registry at the Trade License and Commercial Registration Department.
Required Documents for a Trading License
The documents that are required for a general trading license are: Memorandum of Agreement, passport copy of the management partners, license application which is signed by the company managers or legal representatives, and attested company name letter of approval.
The documents will be checked and validated by the Commercial Registry Authority. After which, the company name will be added to the commercial registry. These documents will then be forwarded by the DED to the Federal Ministry of Economy for publication. When the licensing procedures are done, the DED will issue the original trade license and the commercial registration certificates.
Validity of the license is one year. For renewal of the trade license, it is necessary to acquire approval from the authorities. The approval document must be submitted the copy of the old license. The validity of the renewal will be 5 years.
This license costs AED30,000 to AED40,000 depending on a couple of factors. It may also serve as a legal holding structure. This can also be used for warehousing and storage.
Advantages of the General Trading License
The following are the advantages of a general trading license:
- low import duty,
- tax-free jurisdiction,
- no paid-up capital required,
- hassle-free legal procedure,
- auditing is not mandatory,
- no restrictions on currency,
- easy access for employee visas,
- wide options for banking facilities,
- total repatriation of capital and profits, and
- provisions for local and international trading.
Remember that it helps to be informed of the steps, procedures, requirements, and techniques for acquiring the general trading license. To make things easier for you, it’s better to seek assistance from the experts at HBS Dubai. Check out their services now.