Dubai has become one of the top places in the world to start and grow a business. Thanks to its great location, strong infrastructure, and investor-friendly policies, people from all over the world come here to set up their businesses.
But before you can legally run a business in Dubai, you need a trade license. This is an official document that gives you permission to carry out specific business activities in the UAE. Without it, your business is not legally allowed to operate.
Getting a trade license in Dubai not only helps you stay compliant with UAE laws, but it also builds trust with customers, partners, and banks. It opens the doors to corporate bank accounts, office rentals, visa applications, and more.
What is a Trade License in Dubai?
A trade license in Dubai is an official permit that allows individuals or companies to conduct specific business activities within the emirate. Issued by the Department of Economic Development (DED), this license is essential for legally operating a business in Dubai.
A trade license serves as legal authorization for a business to engage in particular commercial, professional, or industrial activities. It outlines the scope of operations permitted and ensures that the business complies with local laws and regulations. Without this license, conducting business in Dubai is considered illegal.
Role of the Department of Economic Development (DED)
The DED is the governing body responsible for regulating and facilitating economic activities in Dubai. Its functions include:
- Issuing Trade Licenses: Granting licenses based on the nature of the business activity.
- Business Registration: Overseeing the registration and classification of businesses.
- Regulatory Oversight: Ensuring businesses adhere to the emirate’s economic policies and standards.
By managing these aspects, the DED plays a pivotal role in maintaining a structured and transparent business environment in Dubai.
What are the Benefits of Having a Trade License in Dubai, UAE?
Obtaining a trade license in Dubai offers many advantages for entrepreneurs and businesses:
Legal Compliance
One of the most important benefits is that a trade license ensures your business operates legally in Dubai. Without a valid license, you could face fines, penalties, or even have your business shut down. A trade license guarantees that your business complies with local laws and regulations.
Tax Benefits
Dubai offers a very favourable tax environment, including no personal income tax and corporate tax exemptions for certain businesses. This allows business owners to increase and retain their revenue.
Ability to Open a Bank Account
Having a trade license is a requirement for opening a corporate bank account in Dubai. With a valid license, you can also apply for business loans or other financial services that may help you expand your operations.
Sponsorship Opportunities
With a trade license, you can sponsor employees and dependents, providing them with residency visas and allowing you to build a stable workforce.
Protection of Intellectual Property
With a trade license, you can register your intellectual property (IP), such as trademarks, patents, or copyrights, under the protection of UAE law. This helps safeguard your brand, products, and services from infringement.
Types of Trade Licenses in Dubai, UAE
Dubai offers a variety of trade licenses to accommodate the diverse business activities within the emirate. Selecting the appropriate license is crucial for legal operation and aligning with your business objectives. Here are the main types of trade licenses available in Dubai:
Commercial License
A commercial license is issued to businesses engaged in trading activities. It includes a wide range of operations, including:
- Import and export of goods
- Retail and wholesale trading
- General trading activities
A commercial license is suitable for companies dealing with tangible products and commodities.
Industrial License
An industrial license is required for businesses involved in manufacturing or industrial activities. This includes:
- Production of goods
- Processing of raw materials
- Assembly operations
Companies must have a physical office or warehouse within the UAE to obtain this license.
Professional License
This license caters to individuals and companies offering professional services. It covers a broad spectrum of activities, such as:
- Consultancy services (e.g., management, IT, marketing)
- Legal and accounting services
- Educational and training services
A professional license is ideal for service-oriented businesses and skilled professionals.
Tourism License
Businesses operating in the travel and tourism sector require a tourism license. This includes:
- Travel agencies
- Tour operators
- Hospitality and leisure services
The license is issued by the Department of Economy and Tourism (DET) and is essential for companies aiming to provide tourism-related services in Dubai.
Specialised Licenses
In addition to the primary licenses, Dubai offers specialised licenses to cater to specific business models:
- E-commerce License: For businesses that sell products or services online through websites or social media platforms.
- Freelance Permit: Designed for individuals seeking self-employment opportunities in fields like media, technology, and education.
- Crypto License: For companies involved in cryptocurrency trading, blockchain technology, and related services.
- Agricultural License: For businesses engaged in farming, crop cultivation, and agricultural consultancy.
Each specialised license has specific requirements and is issued by the relevant authorities overseeing the particular sector.
Mainland vs Free Zone Trade License in Dubai
Dubai offers two major jurisdictions for business setup – Mainland and Free Zone. Both offer unique benefits and serve different business objectives.
| Feature | Mainland Trade License | Free Zone Trade License |
| Business Jurisdiction | Under the Dubai Economic Department (DED) | Under specific Free Zone Authorities |
| Business Scope | Can operate anywhere in the UAE and internationally | Restricted to within the Free Zone and international markets |
| Ownership | 100% foreign ownership (for most activities as per new UAE laws) | 100% foreign ownership |
| Office Space Requirement | Mandatory to have a physical office in Dubai | Flexi-desk or virtual office allowed in many Free Zones |
| Visa Eligibility | More flexible visa quotas based on office space | Limited visas (depends on Free Zone and package chosen) |
| Cost of Setup | Higher due to office rental and government fees | Generally lower setup cost with flexible packages |
| Auditing & Reporting | May be required depending on activity and company type | Required annually in most Free Zones |
| Sponsorship/Local Agent | Not required for most activities (post 100% foreign ownership law) | Not applicable |
| Ideal for | Companies targeting local UAE market, large operations | Startups, SMEs, and businesses focused on international markets |
| Customs and Import/Export | Must register with Dubai Customs for import/export | Free Zones offer customs duty exemptions |
| Regulatory Authority | Dubai Economy & Tourism (DET)/DED | Individual Free Zone Authorities (e.g., IFZA, Ajman Free Zone, DMCC, JAFZA, DAFZA) |
Opt for a Mainland Trade License if you intend to operate extensively within the UAE market, require flexibility in business activities, or plan to engage in government contracts.
Opt for a Free Zone Trade License if your focus is on international trade, you seek full foreign ownership with tax benefits, or you prefer a cost-effective setup with flexible office solutions.
How to Get a Trade License in Dubai?
Obtaining a trade license is a fundamental step in establishing a business in Dubai. The process varies slightly depending on whether you’re setting up in the mainland or a free zone.
Determine Your Business Activity
Identify the specific activities your business will engage in, as this determines the type of license required. Dubai’s Department of Economic Development (DED) provides a list of over 2,000 permitted activities.
Choose the Jurisdiction
Mainland: Under Dubai Department of Economic Development (DED)
Free Zone: Choose from 40+ Free Zones in Dubai (e.g., DIFC, IFZA, RAKEZ, Ajman Free Zone, DMCC, DAFZA, Dubai South)
Select a Legal Structure
Choose an appropriate legal structure for your business, such as:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Branch of a Foreign Company
- Civil Company
The legal structure affects ownership, liability, and operational flexibility.
Reserve a Trade Name
Choose a unique name and reserve it through the relevant authority (DED or Free Zone). Make sure it complies with UAE naming guidelines (no offensive or religious terms, etc.)
Get Initial Approval
Obtain preliminary approval from DED or Free Zone authority. This indicates that the UAE government has no objection to you starting the business.
Prepare Required Documents
Common documents include:
- Passport copies of shareholders
- Visa copies (if applicable)
- Emirates ID (if applicable)
- NOC from current sponsor (if required)
- MoA (Memorandum of Association)
Secure a Business Location
Obtain a physical address for your business operations. For mainland businesses, this involves leasing office space and registering the lease with Ejari. Free zones offer various options, including flexi-desks and shared offices.
Submit Trade License Application
With all documents in place, submit the trade license application to the DED or the relevant free zone authority. Ensure all information is accurate to avoid delays.
Pay the Required Fees
Pay the applicable fees for license issuance, which vary based on the business activity, legal structure, and jurisdiction. Additional costs may include:
- Trade name reservation fees
- Initial approval fees
- Office lease registration fees
Receive Your Trade License
Upon approval and payment, you’ll receive your trade license, officially authorising you to commence business activities in Dubai.
Additional Steps After Getting Your License
- Apply for an Establishment Card from the Immigration Department
- Open a corporate bank account in the UAE
- Apply for UAE residency visas (for you and your employees)
- Register for VAT (if your business crosses the threshold)
Documents Required for a Trade License in Dubai
Trade license in Dubai requirements generally include:
- Completed application form from DED or Free Zone Authority
- Passport copies of all business partners/owners
- Visa copy or UAE entry stamp of the owners (if applicable)
- Passport-sized photographs
- Trade name reservation certificate
- Initial approval certificate from DED
- Notarised Memorandum of Association (MoA) for LLCs
- Tenancy contract and Ejari certificate
- External approvals (if your activity requires clearance from specific authorities)
What are the Trade License Fees in Dubai?
The trade license in Dubai fees can vary depending on several factors such as the type of license, business activity, and location (mainland or free zone). For businesses setting up in the mainland, the basic cost of a trade license typically starts at around AED 15,000 to AED 50,000.
In contrast, Dubai’s various free zones offer competitive packages that often include the trade license, office space, visa quotas, and other administrative benefits. The pricing of free zone licenses can vary significantly depending on the free zone’s location and services offered.
For aspiring entrepreneurs or freelancers on a budget, there are also options for the cheapest trade license in Dubai, with packages starting from as low as AED 7,000. These are ideal for solo professionals, consultants, or small-scale online businesses. However, the requirements and eligibility for such low-cost licenses can differ, so it’s best to consult with business setup experts to find the right fit for your specific needs.
Trade License Renewal in Dubai
Renewing your trade license in Dubai is essential to keep your business legally active and avoid penalties. Whether you’re operating in the mainland or a free zone, the renewal process must be completed before the license expiry date, which is typically valid for one year.
For mainland companies, the DED handles trade license renewals. To initiate the renewal, you must ensure that your Ejari (tenancy contract) is valid for at least one more month, as this is a mandatory requirement. You’ll also need to submit your updated trade license application form, passport copies of shareholders, and any necessary external approvals if your business activity requires them.
In free zones, the process is often more straightforward. Free zone authorities typically send reminders in advance, and since many packages include renewals and administrative support, the process can be completed quickly, especially if your office lease and visa documents are still valid.
Failing to renew your trade license on time can result in penalties, blacklisting, or even license cancellation.
Obtain your Dubai Trade License With Ease
Starting a business in Dubai is an exciting opportunity, and getting the right Dubai trade license is the first step to making it happen. Now that you have all the information, you’re ready to move forward.
If you’re ready to take the next step, AE Setup is here to help. We provide free consultations and offer full support with everything from getting your trade license to handling visas, office space, and PRO services. With our quick approvals and personalized advice, we make the entire process easy for you.
Speak with us today, and we’ll guide you through the process of setting up your business in Dubai.
