If not for a relevant trade licence, you can’t operate a business in Dubai or anywhere in the United Arab Emirates, just like you can’t drive if you don’t have a valid driving licence. If somehow, you manage to do it, it is illegal in the UAE and you have to face extremely ugly consequences.
Know DED Licence
A trade licence is a mandatory requirement for business setup in Dubai legally, which is granted by the authority in charge of the jurisdiction you have chosen for your business registration. Speaking of jurisdictions, there are three different routes you may take for your company formation in Dubai, UAE – Mainland (or onshore) company formation, Free Zone company formation and Offshore company formation. Each territory has its own regulatory body.
For instance, free zone businesses are overseen by the local government in each respective emirate, and mainland companies are regulated by the Department of Economic Development (aka DED) of the individual Emirate.
The catch is – when you choose to incorporate your business in a mainland jurisdiction of Dubai or any other emirate of the UAE, you have to apply for a trade licence with the DED of the respective Emirate. And the trade licence issued by DED to operate from the UAE mainland is known as DED Licence.
You have to follow a certain procedure and complete the required paperwork to attain your DED Licence in Dubai while being compliant with Emirate-specific business formation rules and regulations. Ahead, you may check out the necessary steps to follow if you are seeking a DED licence for your business formation in Dubai.
Benefits of DED Licence in Dubai
Making the correct location decision can dramatically alter your company’s dynamics and future success. With a mainland company, it’s easier to grow your business and remain flexible while enjoying the below-mentioned perks:
- Freedom to trade across Dubai and in the UAE
- Ability to trade internationally and expand your presence
- Freedom to grow your company and team
- Ability to diversify your offerings
- Ability to deal with the UAE or GCC governments
- Ability to create a flexible startup
- 100% business ownership for more than 2000 commercial and industrial activities
Dubai DED Licence Application Process
As you have decided to establish an onshore company in Dubai, you must complete the Your business setup advisor can help you figure out all this and come up with the best possible solution for dubai trade licence. Now let’s talk about the general steps to obtain the DED licence in Dubai, in a general scenario.
1. Select your commercial business activity. DED approves about 2000 commercial and industrial business activities that are eligible for 100% foreign ownership.
2. Determine the DED licence type that covers all the desired economic activities.
3. Propose at least three names for your mainland company in Dubai that is in line with the requested trade activities and most importantly with the UAE standards and trade name guidelines. At this stage, you will receive a trade name certificate that you have to submit for the DED licence in Dubai.
4. Decide the legal form of your mainland/LLC company in Dubai. DED allows you to opt for 16 legal forms:
- Sole Proprietorship
- Partnership Company
- One Person Company (LLC)
- Limited Liability Company
- Simple Limited Partnership
- Private Share Holding Company
- Public Share Holding Company
- Branch of a Foreign Company
- Representative Office
- Civil Company
- SME Licence
- Intelaq (Home-based business for UAE Nationals)
- Branch of a Dubai-based Company
- Branch of a UAE-based Company
- Branch of a GCC-based Company
- Branch of a Free zone Company
This is to be noted that the type of business activity, the number and nationality of owners, and the ownership options will influence the entity’s legal structuring.
5. Receive initial approval from DED. Here you are required to furnish a few documents and details to DED such as:
- Unified number or ID number
- The parent company’s board resolution to open a branch in Dubai, appoint the manager and list the company’s activities
- Basic details of your partners, manager and LSA (if applicable) such as an address, contact information, identification number (Emirates ID number, passport or unified number), position in the company and ownership shares
Usually, the process of obtaining initial approval takes 10 minutes. The certificate helps you in gathering other documents that are indispensable to attain the trade licence from Dubai DED.
6: Buy or rent out commercial space in a mainland jurisdiction that checks all the boxes. At this stage, you will be provided with tenancy documents registered with RERA visa EJARI System.
7: Complete all the paperwork required by Dubai DED for licence issuance. The list of those documents includes:
- Valid trade name certificate
- Valid Initial Approval Certificate
- Tenancy contract approved by Dubai Municipality and attested by RERA (Ejari)
- Memorandum of Association (Applicable for LLCs, One Person Company, Private Shareholding Company (Private Joint Stock Co), Public Shareholding Company, Simple Limited Partnership, Partnership Company and Civil Company)
- Local Service Agent Agreement (Applicable when a UAE national, represents your business with regard to licensing and compliance.)
- Approvals from Government bodies (Applicable to certain business types)
Note: Applicants can apply for the Trade Name Certificate and Initial Approval Certificate through DED’s online portal. However, for the drafting of the Memorandum of Association (MoA) they must approach a law entity such as the DED Legal Affairs or Notary Public. Further, special approvals or NOCs can be collected from the relevant federal and local government offices only if the chosen business activity demands. Once the above-listed documents are ready, you can proceed with your trade licence application online.
What is the cost of DED licence in Dubai?
Now comes the million-dollar question, but unfortunately there, no business setup company in Dubai including us can give you a straightforward answer until they know your choices for the reason being there are myriad factors that affect the overall cost o business formation in the UAE.
For instance, the monthly rental of the commercial space you are leasing, the requirement of external approvals, type of business activity, legal form of the company, number of employees, and their visa applications, various admin and document attestation fees, share capital, amongst many others. However, it is safe to say that the cost of obtaining a Dubai DED licence can swing between AED 15,000 and AED 50,000, considering the lowest possible costs for everything involved.