Get Your Company Trade License in UAE

The UAE, ranked #1 in the Global Entrepreneurship Monitor Report 2024, continues to attract entrepreneurs worldwide. To start and operate a business here, obtaining a Trade License is mandatory, ensuring both legal compliance and reinforcing your credibility in the UAE’s competitive market.

The license is issued by the Department of Economic Development (DED) or relevant free zone authorities, based on jurisdiction and activity type.

• Increased Flexibility: Recent reforms now allow 100% foreign ownership for over 1,000 business activities in the UAE mainland.
• Streamlined Licensing: Government platforms like "Invest in Dubai" and the "Basher" eService simplify the licensing process, allowing faster company setup with minimal paperwork.

Navigating these processes on our own can be complex. From selecting the right business activity to submitting final documents, Safe Ledger ensures you’re compliant, efficient, and ready to launch without hassle.

A Trade License is an official legal document granted by the Department of Economic Development (DED) for businesses operating in the UAE. It authorizes a company to carry out specific business activities within the UAE, ensuring full compliance with the country's laws and regulations.

Whether you're trading goods, offering professional services, or involved in manufacturing, the type of license you obtain, commercial, professional, or industrial, must match your business activity.

• A valid Trade License is required to open a corporate bank account in the UAE.
• It is mandatory to hire employees and process their work visas.
• Operating legally in the UAE’s structured business environment requires a valid Trade License.

Choosing the right jurisdiction for your Trade License in the UAE is crucial. The UAE offers three main options: Mainland, Free Zone, and Offshore. Each has unique rules, benefits, and market access.

This structure reflects the UAE’s strategy to attract diverse investors and support global competitiveness through tailored regulatory frameworks.

Mainland vs. Free Zone vs. Offshore Comparison

Whether you are an individual professional, a small startup, or a large international corporation, you can apply for a company Trade License. The licensing system is inclusive, streamlined, and adaptable to various business models and nationalities.

1. Individual Entrepreneurs and Freelancers

Both UAE residents and foreign nationals can apply as individual entrepreneurs. This includes freelancers, consultants, and self-employed professionals across various sectors, such as media, IT, education, and marketing.

Required Documents:

• Valid passport copy
• UAE visa and Emirates ID (if already a resident)
• Passport-size photograph
• No Objection Certificate (NOC) from current employer (if sponsored)
• Proof of residential address

Why It’s Suitable:

This route is ideal for solo professionals looking to legally offer their services, especially in Free Zones that support freelance permits and flexible office solutions.

2. Corporate Entities (Foreign or Local Companies)

Existing companies, whether incorporated in the UAE or abroad, can register a branch, representative office, or a new entity under a UAE Trade License.

Required Documents:

• Certificate of Incorporation
• Memorandum and Articles of Association
• Board Resolution authorizing UAE expansion
• Power of Attorney for the company’s authorized representative

Why It’s Suitable:

This is perfect for foreign firms aiming to enter the Middle East market, benefit from the UAE’s tax regime, or manage regional operations.

3. Startups and Small-to-Medium Enterprises (SMEs)

New ventures in fields like technology, retail, manufacturing, healthcare, and professional services can apply for a license through the Mainland or Free Zones.

Required Documents:

Standard documentation as above, plus tenancy contracts, trade name approvals, and any activity-specific permissions.

Why It’s Suitable:

Startups benefit from the UAE’s supportive ecosystem, funding options, and business incubators, especially within Free Zones focused on innovation and tech.

Common Legal Structures

The legal form of your business depends on its specific requirements and dictates the laws and regulations it must comply with. Common options for legal structures in the UAE include:

• Sole Proprietorship: Ideal for individuals operating a business on their own.
• Limited Liability Company (LLC): This is the most common choice, providing limited liability protection for the owners.
• Partnership Company: Suitable for businesses with multiple partners.
• Civil Company: Often chosen by professionals offering specialized services.
• Branch of a Foreign Company: For existing international businesses looking to establish a presence in the UAE.

It is crucial that the chosen legal form is consistent with the economic activity your business intends to perform.

Obtaining a company Trade License in the UAE involves several key steps.

Step 1: Choose Business Activity and Legal Structure

First, define your specific business activities clearly. Then, select a suitable legal structure, such as a Sole Proprietorship, LLC, Partnership, and more. The chosen legal form must align with your business activity. A single license can often include multiple activities.

Step 2: Select and Reserve a Trade Name

Choose a unique trade name that adheres to UAE naming rules. Avoid using improper or religiously sensitive words. The name should also be related to your license type or activity. Apply for a Trademark Registration through the DED or the relevant Free Zone authority.

Step 3: Apply for Initial Approval

Submit your application to the DED or the relevant free zone authority. Initial approval signifies that the UAE government has no objection to establishing your entity. However, it does not grant immediate authorization to operate. Required documents typically include:

• Passport copies
• Visa copies
• Application form
• Business plan

The cost for initial approval can be as low as AED 120, and the process can be very quick, sometimes taking just 10 minutes via the Invest in Dubai portal.

Step 4: Draft and Notarize Memorandum of Association (MOA)

An MOA is required for certain legal forms, such as Limited Liability Companies (LLCs). This document defines your legal form, economic activities, and license partners. It must be duly certified or notarized.

Step 5: Secure Office Space

You must acquire a physical office space or workspace. This is mandatory for Mainland companies, and you will need to obtain a tenancy contract or Ejari certificate. Free zones may offer more flexible options like flexi-desks or virtual offices.

Step 6: Obtain Additional Approvals (If Required)

Some business activities necessitate external permissions from relevant authorities. These can include the Health Authority, Roads and Transport Authority (RTA), Telecommunications Regulatory Authority, or Dubai Municipality.

Step 7: Submit Final Documents and Pay Fees

Submit all required documents to the DED or Free Zone authority. This submission includes the MOA, lease agreement, and initial approval. Finally, pay all applicable license fees.

Let Safe Ledger FZCO  handle it all and get a stress-free business setup at your fingertips!

To apply for a Trade License, you will typically need:

• A completed application form.
• Passport copies of all shareholders, partners, or owners.
• Passport-size photos.
• UAE residence visa or entry stamp, if applicable.
• Emirates ID for UAE residents.
• A notarized Memorandum of Association (MOA).
• A lease agreement or Ejari registration for your business premises.
• The initial approval certificate.
• A business plan, particularly for some Free Zones.
• A No Objection Certificate (NOC) from your current employer, if applicable.
• For corporate entities, the parent company's incorporation certificate, MOA/AOA, Board Resolution, and Power of Attorney.

The cost of a UAE Trade License depends on your business type, structure, and location. These variations help guide startups and companies to choose the right jurisdiction for their scale and needs.

Estimated Trade License Costs (Mainland vs. Free Zone)

Obtaining a company Trade License in the UAE offers numerous advantages beyond mere legal permission. Here are some of them:

• Legal Compliance and Protection

A Trade License ensures your business adheres to UAE laws and operates legally. This protects your business from fines, penalties, or legal troubles. Operating without a license is illegal and can lead to immediate shutdowns or even deportation in severe cases.

• Access to Banking and Financial Services

A Trade License is essential for opening a business bank account in the UAE. It allows companies to conduct financial activities and is crucial for corporate bank account setup.

• Ability to Hire Employees and Obtain Visas

The license enables you to hire employees and rent office space. It also allows you to apply for multiple residence visas for your employees. Furthermore, you can sponsor your dependents, including family members and domestic staff. Free Zones often provide fast-track visa processing systems.

• Enhanced Credibility and Brand Image

Holding a Trade License significantly builds credibility with clients, suppliers, and partners. It demonstrates that you run a professional and reliable business, strengthening your brand image and reputation in the market. It also ensures due diligence before signing contracts, confirming the legitimacy of your operations.

• Tax Advantages and Repatriation of Profits

The UAE offers no personal income tax and corporate tax exemptions for free zone businesses. Investors enjoy 100% repatriation of profits and capital, with no restrictions on fund transfers. Additional benefits include no customs duties in free zones and recognition of Trade License fees as deductible business expenses.

Other Benefits

Holding a UAE Trade License provides access to utilities, government services, and tenders. The country offers world-class infrastructure, a strategic global location, and strong IP protection. Businesses benefit from a simple setup process, supportive regulations, and a single license that enables multiple trade activities for operational flexibility and growth.

Managing your Trade License throughout its lifecycle, from renewal to potential cancellation, is crucial for maintaining legal compliance and avoiding disruptions.

Company Trade License Renewal in UAE

Trade Licenses in the UAE are generally valid for one year from their issuance date. They require annual renewal to ensure continuous legal operation. Renewing your license is critical for maintaining legal compliance and avoiding penalties.

The renewal process involves several steps:

• Renewal Timeline: Renewal requirements typically begin 30 days before expiration. A 30-day grace period may apply after expiry.
• Required Documents: Gather the required documents, including a copy of your current Trade License, a valid tenancy contract or Ejari certificate, passport copies, and Emirates IDs of owners/partners. An updated Memorandum of Association (MOA) may also be needed if applicable, along with the BR/1 form for renewal. Ensure your tenancy contract (Ejari) is valid for at least 1-3 months beyond the renewal date.
• Application Submission: Submit your renewal application either online through the DED eServices portal or the relevant free zone portal, or visit a service center in person.
• Renewal Fees: Pay the applicable renewal fees, which vary depending on your business activity and jurisdiction. Annual renewal fees can range from AED 8,000 to AED 12,000.
• Receiving the Renewed License: Once approved and fees are paid, you will receive your renewed Trade License.
• Post-Renewal Updates: After receiving your renewed license, make sure to update all relevant documents and notify your bank, clients, and suppliers.

Consequences of Non-Renewal/Expiry of Trade License

Failing to renew your Trade License on time can lead to serious consequences. This demonstrates the UAE government's strict stance on compliance, ensuring market integrity and preventing illicit operations.

• Penalties and Fines: Failing to renew or operate with a valid Trade License can lead to significant fines, starting from AED 250 and potentially exceeding AED 100,000 for repeated violations.
• Operational Disruptions/Business Closure: Operating without a valid license may result in temporary suspension, cease-and-desist orders, or even permanent closure. Unlicensed businesses face immediate shutdown upon detection by authorities.
• Legal Implications: Operating without a valid license is a legal violation under UAE law. This can expose your business to legal actions and potential lawsuits.
• Visa Cancellation: If your business employs staff under its Trade License, their visas can be revoked or canceled. In severe cases, owners, managers, shareholders, and directors could even face deportation from the UAE.
• Reputation Damage: Being publicly listed as operating without a valid license can severely harm your business's reputation. This makes it difficult to build trust with future clients, suppliers, and partners.
• Blacklisting: Businesses that continue operations without renewing their Trade License may be blacklisted by authorities. Blacklisted companies are not permitted to participate in any business procedures, cannot apply for new visas, and may have all existing visas revoked.

Cancellation Procedures for a Trade License in UAE

Closing a company in the UAE requires a formal Trade License cancellation process. It’s recommended to begin one to two months before license expiry, especially for LLCs, due to legal clearances and administrative steps. This is true especially for Mainland companies.

1. Pass a Board Resolution: Shareholders must sign and notarize a resolution agreeing to close the business. This is required for LLCs, partnerships, and other multi-owner structures.
2. Cancel Employee Visas and Labour Cards: Submit visa cancellations through the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone portal. Ensure all salaries, end-of-service benefits, and dues are paid.
3. Cancel the Establishment Card: Apply to cancel the establishment card issued by the General Directorate of Residency and Foreigners Affairs (GDRFA). This step is essential before final cancellation.
4. Publish a Legal Notice (for LLCs): Publish a closure notice in two local Arabic newspapers and wait 30–45 days to allow time for any objections.
5. Settle All Outstanding Dues: Clear bills with DEWA (utilities), Etisalat/du (telecom), landlords, and suppliers. Close your business bank account and ensure all payments to government bodies are complete.
6. Obtain All Required Clearances: Get No Objection Certificates (NOCs) from:

• Utilities
• Telecommunication providers
• Bank
• Landlord
• FTA (for VAT-registered companies)
• Immigration (visa records)

7. Submit Final Documents for Cancellation: Prepare and submit all required documents to the relevant authority:

• Trade License copy
• Emirates IDs & passports of partners
• MOA termination document
• Board resolution
• Final audited financial statements
• Newspaper publication proof (for LLCs)
• Visa and labor card cancellation proofs
• Clearance letters

8. Receive the Cancellation Certificate: Once all documents are approved, the respective authority will issue your business license cancellation certificate.

Notes:

For Mainland Companies (DED):

• Legal notice publication is mandatory for LLCs.
• Cancellation fees: AED 1,020 (DED), AED 500–800 (newspaper), AED 100–300 per visa.
• Entire process may take 30–60 days.

For Free Zone Companies:

• Processed online via the free zone’s portal.
• No newspaper ads required.
• Typically completed within 1–3 weeks.

The process is complex and time-consuming, emphasizing the need for both entry and exit strategies to avoid future liabilities.

Contact Safe Ledger to manage your company's cancellation smoothly and efficiently, ensuring a hassle-free exit from the UAE market.