Foreign investors interested in initiating the process of business setup in Dubai mainland must obtain a trade license in their desired activity. The Department of Economic Development (DED), the mainland licensing authority, issues three types of trade licenses for investors to set up a business in Dubai: Professional, Commercial and Industrial. The investors should select one of these licenses depending on the activity they intend to carry out in Dubai.
Entrepreneurs who wish to carry out trading activities in Dubai must obtain a Commercial License issued by the DED. A Commercial License is one of the most sought-after business licenses in Dubai mainland as it opens a path to conduct trading activities in the lucrative UAE and Middle East market. Furthermore, unlike a free zone Commercial License, a mainland license allows the license holders to trade anywhere in the UAE without restrictions. Business setup consultants in Dubai can help investors obtain a Commercial License without any hassle.
Activities Permitted by Commercial License in Dubai
Investors require a Commercial License if their proposed business activity involves the selling or trading of goods. A Commercial License in Dubai permits a wide range of activities including general trading, electronic trading and even software trading.
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A Commercial License is ideal for both general traders and specialised traders in Dubai, UAE. Businesses engaged in retail, construction and real estate activities are also required to obtain a Commercial License in Dubai. In short, businesses that are engaged in trading goods, commodities and services can apply for a Commercial License in Dubai.
Business setup consultants in Dubai can guide investors through the activities permitted under a Commercial License. Meanwhile, here is an indicative list of activities permitted by a Commerce License issued by DED:
- Foodstuff trading
- Retail & Wholesale trading
- Financial Intermediation
- Trading of Electrical goods
- Activities of import & export
- Building Materials trading
- Fuel & Petroleum Products
- Sale of electronic goods
- Domestic Gas Distribution
Legal Structure Ideal for Commercial License
Identifying an appropriate legal structure is one of the critical facets of business setup in Dubai. A legal structure is determined based on the number of shareholders and the nature of the business activity. A Limited Liability Company (LLC) in Dubai is the most appropriate legal structure for carrying out activities under a Commercial License.
An LLC can have a maximum of 50 shareholders. The liability of each shareholder is limited to the extent of shares they hold in the company. Earlier, an LLC structure consisted of a UAE national with 51% shares (Local Sponsor) and an expatriate shareholder with 49% shares. However, this requirement has been scrapped with effect from June 2021. Consult with business setup consultants in Dubai for more information.
Commercial Activities with 100% Ownership
DED has amended certain provisions of the Federal Law No 2 of 2015 on Commercial Companies in line with the Federal Decree-Law No 26 of 2020. As per the amendments, the DED has issued a list of more than 1000 commercial activities that permits 100% foreign ownership in Dubai mainland, excluding activities of strategic impact. Investors can contact business setup consultants in Dubai to get an in-depth view of the list. The following are some of the major activities eligible for 100% ownership in Dubai mainland:
- General Trading
- Mini Mart
- Wholesale Supermarket
- Electronic Cigarettes & Accessories Trading
- Computer Systems & Communication Equipment Software Trading
- New Motor Vehicles Trading
- Electric Cars Trading
- Flowers & Ornamental Plants Trading
- Horses Trading
- Foodstuff Supply Services
- Tobacco & Cigarettes Trading
- Drug Store
- Heavy Aircrafts & Helicopters Trading
- Refined Oil Products Trading
- Photography Processing Materials Trading
- Textiles & Fabrics waste Trading
Benefits of Obtaining a Commercial License in Dubai
By obtaining a Commercial License in Dubai mainland, entrepreneurs are entitled to the following benefits:
- License holders can carry out up to 10 activities under one trade license
- Ability to trade in several similar goods under one license
- Freedom to carry out internal trading activities (exports, imports, re-exports)
- 100% foreign ownership in more than 1000 activities
- Easy to obtain employment visas for foreign workers
- Easy to hire a large number of foreign employees
- Auditing is not mandatory to renew a commercial trade license in Dubai mainland
- The process of obtaining a Commercial License in Dubai is not hard
Process of Obtaining a Dubai Mainland Commercial License
Investors need to go through the basic step of business setup in Dubai to obtain a Commercial License. It is advisable to apply through business setup consultants in Dubai to avoid delays or errors in documentation. The following is the major steps involved in the process of obtaining a Commercial License in Dubai mainland:
- Select business activities
- Determine an appropriate legal structure
- Reserve a company name with DED
- Obtain DED initial approval
- Sign Memorandum of Association (MoA)
- Obtain external approval for special activities
- Rent an office space or shop
- Submit documents including lease agreement and external approval
- Pay official fee
- Receive Commercial Trade License from DED
Special Approvals for Commercial License
Certain activities are classified as special activities in Dubai, depending on the risk they pose to the daily lives of consumers. A Commercial License in Dubai mainland involves the trading of a wide range of activities spanning a diverse range of sectors. Some of those sectors may come under the Special Activity list requiring special approval from ministries of government bodies. For instance, trading in oil and gas products on the mainland requires approval from the Dubai court
Product Certification Requirements
Commercial License holders who engage in import and distribution activities must assess whether they should conduct product certification for the goods they intend to supply in the UAE market. The Emirates Authority for Standardisation and Metrology (ESMA) regulates specific goods that require to be certified before being supplied in the UAE market. Some of the regulated products include foodstuff, cosmetics, Personal Protective Equipment (PEP), tyres, e-cigarettes, honey, disinfectants, organic food, food contact materials, baby care products etc. Products that are not certified by ESMA will be either rejected during shipment or withdrawn from the market. Business setup consultants in Dubai who offer product certification services can help the entrepreneurs comply with ESMA standards.
Hire the Best Businesses Setup Consultants in Dubai, UAE
Obtaining a Commercial License in the Dubai mainland is key to conducting trading activities such as import, export, and trading of some of the most sought-after products. However, investors are advised to apply for a Commercial License through business setup consultants in Dubai such as Jitendra Business Consultants (JBC). This is because the DED’s rules and requirements may appear to be complex for new entrepreneurs, especially external approvals, bank account opening, visa processing etc. Being one of the leading providers of business setup services in Dubai, JBC can simplify the DED licensing process for foreign investors.
JBC’s team of highly qualified consultants is well-versed in UAE immigration laws and labour laws. We can assist the investors in selecting business activities, determining appropriate legal structure, drafting documents, obtaining external approvals, opening a bank account etc. JBC’s PRO services will make it easier for the investors to obtain UAE residence visas for business owners, employees, family etc. We also provide value-added services such as VAT registration, accounting and product registration services across the UAE. Contact JBC today to quickly obtain a Commercial License in Dubai.