How to Obtain a Commercial License in UAE

Setting up a business in the UAE is an exciting opportunity for entrepreneurs. A crucial step in this process is obtaining a commercial license in UAE, which allows businesses to legally trade goods and services in the region. Understanding the requirements, costs, and application process is essential for a smooth setup.

What is a Commercial License in UAE?

A commercial license in the UAE is issued to businesses engaged in trading, general trading, and commercial activities. It is a requirement for enterprises involved in buying and selling goods within the country or internationally.

Benefits of Obtaining a Commercial License in UAE

• Access to a thriving business market
• Opportunity to trade locally and internationally
• 100% foreign ownership in free zones
• Tax benefits, including no personal income tax
• Ability to open a corporate bank account

Steps to Obtain a Commercial License in UAE

1. Choose a Business Jurisdiction

Entrepreneurs can set up their business in one of three main jurisdictions:

• Mainland: Allows business operations across the UAE with no limitations on local trade.
• Free Zone: Offers 100% foreign ownership and tax exemptions but may have trade restrictions outside the free zone.
• Offshore: Suitable for international business with no physical presence in the UAE.

2. Select Business Activities

The UAE government provides a predefined list of business activities that companies must choose from when applying for a commercial license.

3. Choose a Business Name

The trade name should be unique, compliant with UAE naming regulations, and must not resemble any existing business entities.

4. Submit Initial Approval Application

After selecting a trade name and defining business activities, entrepreneurs must obtain initial approval from the Department of Economic Development (DED) or relevant authorities.

5. Secure a Business Location

A commercial office space is mandatory for obtaining a license. The office lease agreement must be registered with Ejari (for mainland businesses).

6. Submit Documents and Pay Fees

Required documents typically include:

• Application form
• Passport copies of shareholders
• Memorandum of Association (MOA)
• Tenancy contract (for physical office)

Once the application is submitted along with the payment, the commercial license is processed within a few days.

Cost of a Commercial License in UAE

The cost varies depending on the jurisdiction and business type. On average, the cost for a mainland commercial license starts at AED 10,000, whereas free zone licenses may range from AED 15,000 to AED 50,000.

Essential Considerations Before Applying

• Choose between a sole proprietorship, LLC, or branch office model.
• Understand UAE taxation policies.
• Ensure compliance with UAE business regulations.

Conclusion

Obtaining a commercial license in UAE is an essential part of setting up a successful business. By following the correct procedures and understanding the jurisdictional differences, entrepreneurs can efficiently launch their ventures.

For official guidelines, visit the UAE Government Portal.

Also, read Best Free Zones in UAE for Business Setup for more insights.