Trade licence guide

What is a trade licence?

A trade licence is the official document permitting your company to carry on a defined activity in the UAE. It carries the company name, legal structure, shareholders, licensed activities and validity period. It is renewed annually.

Trading without a licence attracts serious administrative penalties. An unlicensed company also cannot open a corporate bank account, obtain visas or contract with corporate customers.

Licence types

Your activity falls into one of three categories:

• Professional licence — for those providing expertise and services: consultants, engineers, designers, artisans.
• Commercial licence — for buying and selling goods and commodities, and trading generally.
• Industrial licence — for manufacturing and processing raw materials.

Some emirates also have separate licence types for areas such as tourism and agriculture.

Free zone, mainland and offshore

Which regime the licence sits under determines what you can do:

• Free zone licence — issued by the zone authority. 100% foreign ownership is standard, incorporation is fast and the office requirement is flexible. There is a restriction on selling directly to end customers on the UAE mainland.
• Mainland licence — issued by the relevant emirate's Department of Economic Development. It allows trade anywhere in the UAE, bidding for government tenders and opening branches.
• Offshore — does not trade within the UAE. Generally used for asset holding, holding structures and international arrangements; it carries no residence visa entitlement.

Benefits of a trade licence

• Legitimacy. The licence is the first document corporate customers and banks ask for.
• The tax position. There is no personal income tax in the UAE; corporate tax is 0% up to AED 375,000, and 0% on qualifying free zone income where the conditions are met.
• Freedom to trade. With the right licence, barriers to domestic and international trade fall away; customs exemption applies in the free zones.
• Residence. A licence opens the route to residence visas for you and your family.
• Speed. In the right conditions free zone incorporation completes in seven working days.

Documents required

The list varies by regime and activity; the common core is:

• Passport copies for all shareholders (plus UAE visa / Emirates ID if held)
• Passport photographs
• Completed licence application form
• Approved trade name certificate
• Memorandum of association or service agent agreement, depending on structure
• Activity-specific pre-approval documents
• Office or tenancy contract and its registration (Ejari on the mainland)

Application steps

1. Settle the trade name and have it checked against the rules
2. Choose the legal structure
3. Determine the activity or activities
4. Complete the application form
5. Obtain activity-specific approvals
6. Collect the documents and attest them where required
7. Resolve your premises or address
8. Submit the application
9. Pay the fees and collect the licence

Cost

A single figure isn't possible; the cost is set by the free zone or emirate chosen, the number and type of activities, the visa allocation, the office type and the shareholding structure. We work through what each of those costs in your case during the initial consultation.

Our post-incorporation service prices are published — accounting, VAT, bank account and the rest.

How long does it take?

Where documents are in order and the activity needs no additional approval, a free zone licence can be issued in seven working days. Activities requiring approval and mainland applications take longer; on the mainland, additional steps such as tenancy registration also come into play.

Renewal

The trade licence is renewed annually. Renewal generally requires:

• A valid, registered tenancy contract
• Activity-specific approvals to be current
• Payment of the renewal fees
• Settlement of any administrative penalties