Everything You Need to Know About Business License in UAE
Introduction:
United Arab Emirates is known as the business centre of the Middle East in all over the world. There has been significant growth in the financial, business and trade sectors in last few years. As UAE govt. gives business license in UAE to foreigners so many investors are interested to invest in the different business areas in United Arab Emirates.
The department of economic development authority permits a trade license to a businessman in UAE. For certain categories of business, it requires approval from concerned ministers and other relevant establishments. For instance; banks and other financial institutions take permission from central bank of UAE, insurance companies need permit from the Ministry of Economy and Commerce and pharmaceutical and medical companies need approval from the Ministry of Health for conducting their businesses. Different types of business license in UAE could be obtained by registering company and trade name with the department of economic development.
Categories of trade license in UAE:
Trade licences can be divided into 3 general categories.
- Commercial licences include all type of business trading activities.
- Professional licenses are provided for services, skills, professionals and to the artisans.
- Industrial licenses are provided for industry and manufacturing activities.
Requirements of trade license in UAE:
Obtaining a business license in UAE is a very simple process. It is worth to have all legal documents in a business set up to get maximum benefit for the business owners. These are the following requirements:
- Allocate the business category commercial, professional or industrial.
- Mention all business activities within each trade license.
- Legal status of business in UAE.
- Define trade name.
- Application for the initial approval.
- Lease location and approval from authority.
Overview:
United Arab Emirates has emerged as the economic and culture hub in the Middle East in recent years and there are a number of options for businesses for new comers. However there are many aspects which should not be overlooked initially. Business license in UAE is not only a sole object in this regard, license will be issued to only those groups or individuals who have a great cost capacity of setting up a business in UAE. It involves capital investment, paying for the license, nature of license required, employee visas etc. Moreover if someone is starting a business in UAE in free trade zone or on the main territory must have a license. UAE onshore companies cannot give permit to all sorts of activities as we assume in other companies in other countries. Business licenses in UAE are issued for pre-defined purposes, valid for one year and are subject to annual renewal.
The Dubai licenses can be divided into further two groups. In the first group some licenses are permitted without any special requirements and those are subject to fulfilment of certain UAE requirements. For example a regular trading license will not require any special demand or qualification except higher education diploma of company’s general manager. This is also known as general trade license in UAE. The cost of this license in UAE is AED30, 000 to AED 40,000 approximately.
The benefits of general trade license are numerous.
- No taxes.
- Trade locally and internationally.
- Straight forward procedure.
- Apply for multiple visas.
In the second group in the medical services, all staff should meet certain criteria and standards of government to obtain business license in UAE.
The other type of licences could be divided into professional and commercial activities. Professional licenses are permitted to consulting, audit and IT services and commercial licenses are issued for trading and production purposes.
Setting a business on the mainland:
There are a number of aspects in business license in UAE regarding free trade zone and mainland. Capital requirement for a company on the mainland is according to the regulations of business form. For a PJSC the minimum capital is AED 30 million and for PrJSC it is AED 5 million in advance.
Businesses can be started only by UAE nationals:
- Joint liability institutions.
- Commandite companies.
- An industrial or commercial trade.
- Home base business licenses.
- SME license in Dubai.
People of other nationalities can also obtain business license in UAE and start other type of companies but they definitely need to involve UAE national as a partner or sponsor. UAE national could be a partner with at least 51% ownership of the business. A local service agent can have 100% ownership with the investor.
Company types that demand a UAE national partner:
- LLC companies.
- Public joint stock institutions.
- PrJSC companies.
- Civil engineering Company.
Company types that demand LSA:
- A professional establishment.
- Sole civil company.
- Foreign company office.
Setting a business in free trade zone:
Business license in UAE can be obtained on 100% ownership if the company is going to set up in free trade zone. There are a number of differences between a mainland and a free zone. It usually depends on the nature of business, liability and involvement of UAE partner. Free trade zone area is designed by the government where certain taxes, restrictions on company and trade regulations do not apply in the same manner that they apply on the mainland zone. Free trade zone is often located around seaports and international airports etc. Different types of businesses can be run in free trade zone for example finance, education, retail, hospitality and media. Moreover there are a number of benefits of a business in free trade zone such as 100% import export tax exemptions, no corporate tax, no personal income tax and easy start up and licensing procedures.
Conclusion:
To sum up, it can be said that with valid business license in UAE, one can do business in UAE and with different type of companies as well. Now a day, various groups offer depth knowledge and significant local experience to their clients. Above detailed discussion can give clear idea, what sort of business, type of license and activity may suit to an individual or groups to some extent.
