Due to a favorable business environment and backing from the government, many business people are opting to start a business in Dubai. The huge demand for goods, ease of doing business, and proximity to emerging markets make the Emirate one of the most sought-after locations for starting a new business.
However, you need to have a valid trade license from the Department of Economic Development (DED) to go about it. A set of rules and procedures should be followed to obtain this license.
Activities under General Trading License in Dubai
The activities under the general trading license in Dubai include exporting, importing, or trading goods or products like clothes, accessories, furniture, electronics, etc. Those who wish to do wholesale business should also have a general trade license.
It is important to note that regulated products such as alcoholic beverages, pharmaceutical products, frozen goods, and so on require special approval from the respective authority to be traded. Due to tremendous opportunities in local as well as national and international markets, a trader has the advantage of exploring all the trading possibilities.
For business setup in Dubai, a business person needs to decide from which area he/she wants to get a trade license.
General Trading License vs. Trade License
In simple terms, a general trading license allows businesses to be retail and wholesale any goods within the UAE and outside the UAE, except those goods which are prohibited for the trade without proper approval from authorities.
Hence, the general trading license involves all types except exempted goods. In the case of a trading license, a business owner is only allowed to trade in specific types of goods only for which the license is registered.
Other goods available in the market cannot be traded except if registered under the license. Hence, the scope of a general trading license is large and wide enough compared to the scope of a trading license.
How to Obtain a Dubai Mainland General Trading License?
There are five simple steps to get the general trading license for your business in Dubai. All the steps are explained as under:
Choose a Trade Name and Corporate Entity
Choose an appropriate trade name and legal structure for your company. Make sure that the trade name abides by the conditions mentioned by the DED and is unique.
The corporate entity is required for further proceedings.
2. Choose the Business Activity
Decide on all the business activities to be included in the business license (a maximum of 10 per license).
3. Gather the Documents Required
Prepare the following documents:
A license application signed by the company managers or their legal representatives
A Memorandum of Association
Attested company name approval letter from Department of Economic Development
Passport copy of the managing partners.
4. Get the Other Approvals
Depending on the type of your business activity, get external approvals if required, and apply to the DED.
5. Choose the Location and Pay the Fees
Decide on a business location and get a tenancy contract attested by Ejari. Make the requisite payment for the license, including an issuance fee for obtaining the license.
To get a valid trading license from a free zone or offshore, the company should submit the original documents to the Commercial Registry at the Trade license and Commercial Registration Department.
The End Procedure for Getting a DED General Trading License
The Commercial Registry Authority will check and validate the documents. Then the company name will be added to the Commercial Registry.
The DED will publish the documents to the Federal Ministry of Economy. After publishing the documents, including the MOA and the application entry of the company name, the ministry will issue its approval letter.
Upon completion of the licensing procedures, the DED issues the original trade license and commercial registration certificates. Once obtained, the license is valid for 1 year. You should get approval from the authorities for a trade license renewal in Dubai.
The approval document should be submitted with a copy of the previous license. The renewal will be valid for another 5 years.
General Trading License Cost in Dubai
A Dubai general trading license fee can be around AED 30,000 to AED 40,000, depending upon several factors. It can also be used as a legal holding structure within the UAE and other licensing authorities.
The same can be used for storage and warehousing.
Benefits of General Trading companies Dubai
Setting up a trading company comes with benefits that can be availed by any business that follows this business. Some of these benefits are:
Affordable Company Formation
Company formation is relatively affordable and straightforward. However, some business owners need to submit a business plan with the necessary documents and projections of the revenues.
The entire process takes around one week.
Multiple Visa Facility
Visa services in Dubai offer people who set up a company a facility through which they can obtain various visas. Having multiple visas will allow the trading company to keep a physical presence in Dubai and help recruit more help for the business.
After getting a general trade license, one can apply for multiple employee visas. It depends on the size of the office; the more prominent your office, the more visas you can get.
The businessman can also sponsor visas for dependents, i.e., spouse, child, parents, maid, driver, etc. But one should ensure to get an expert's advice before commencing since this is a necessary process.
Ability to Trade Locally and Internationally
A general trading company can sell or distribute imported or exported goods in the local or overseas market. This will allow a trader can exploit all the possibilities of doing business in local, national, and international calls to gain profits.
Fewer Barriers to Trade
The costs at the start of the business and the time taken are comparatively less. Also, the entrepreneurs holding the mainland trading license are exempt from any paid-up share capital or audits conducted yearly.
This dramatically increases the profitability and affordability of the business.
The Business Regulation and Licensing sector of the Dubai Economic Department understood the need for regulation in e-trading and accordingly introduced an e-trader license. This license will allow the nationals of both the UAE and the GCC countries to conduct business on different social media platforms.
Apart from these, various banking facilities are available for personal and corporate purposes. For example, a company with a general trading license is allowed to have 100% repatriation of capital and profits.
They do not have to deposit share capital in UAE banks.
So, to make things simpler in getting a general trading license, we at Commitbiz have advisors who can help you through the whole process. When you want to set up a business in Dubai, contact us, even if it’s just for friendly advice.
What is the cost of obtaining a General Trading License in Dubai?
Depending on where you choose to set up, the cost of general trading licenses in Dubai, UAE, are generally priced between AED 9,000 to AED 40,000 range.
What are the business activities under a general trading license in Dubai?
The General Trading License enables the investor to indulge in selling, distribution, and storage, import/export, etc. General Trading License covers a wide range of business activities ranging from any retail & wholesale of goods; to the selling of accessories, clothes, furniture, electronics, etc. If the company is involved in the trade of multiple goods and not a single item, getting a general trading license is the right choice.
What is the validity of a Dubai general trade license?
The validity of the General Trading license from the date of issuance is one year.
Does an LLC business require to submit an annual auditing report?
No. The license holder need not submit the annual auditing report.
How much time is required to obtain a trading license in Dubai?
The license issuance formalities are straightforward. Once the documentation part is through, the issuance formalities can be accomplished within ten days.