UAE is the best place for every entrepreneur as it has the benefit of a tax-free or low tax environment. It is essential for business owners to know about the process of setting up a business in the UAE. Every business requires approval to function in the country and the approval is issued by the government.
The trade licenses are mandatory which are approved by the Department of Economic Development(DED). Depending upon different types of business activities, trade licenses are categorized and these are four types that have been discussed below.
Types of trade licenses
The work industries in Dubai, UAE require four main licenses and the companies have the option to apply for any of these licenses.
- Professional licenses
- Commercial license or trade licenses
- Industrial License
- General license
1. Professional licenses
A professional license is issued to a service provider entity or to an individual who can do professional services. This is the reason that professionals or companies who are in services should get a professional license in the UAE. This license allows 100 percent of the foreign ownership with the advantage of the sole proprietorship.
2. Commercial License
UAE commercial license or trade license is issued for those organizations which are into trading of goods, services and commodities. Retail firms, business enterprises, real estate companies, transport companies and other companies should obtain licenses to trade in the UAE. Having this license the business can do exporting, importing and trading within the UAE.
3. Industrial License
Industrial license is issued for those companies which are into converting natural resources into raw materials or finished products. The business line can also be into converting into semi-finished goods or manufacturing products. The business can get global access to customers and it requires a lot of manpower and resources to operate the business.
4. General license
A general trade license is for the start up companies which are interested in carrying out trading operations under one license. The start up company can be a key player in providing support to business essential products. The trader can take advantage of all the trading possibilities into medical, beverages, frozen foods and other businesses.
Getting the Trade License
Getting a license can be simple if you follow the legal requirements of the authorities and all you have to do is comply with the terms and conditions provided by the legal authorities and the license will be issued by the authorities.
It is simple to acquire a trade license, you have to request the department for approval. You have to name the category the profession, business and industry. Regulation of the business with the business license, prepare legal entity status, approval status from the government authorities. Create the company name, Memorandum of association, lease terms and the business premises and get finally the approval from the authorities.
There are many consultants in the UAE which will ease up the formalities from end to end and assist you in procuring the licenses. The dedicated consultant team will assist in the best possible way for quick and hassle free approval.
For the trading business, exporting and importing the products, a license is issued by the authorities. For trading on goods such as electronics, food, furniture license permits are required to do trading in the UAE. The trading license will allow the business to do mixed goods trade this means the entity can import, export and trade within the country. The Department of Economic Development offers a license that provides the services to the individuals and the companies who initiate the business in Dubai.
The benefits of having a general trade license in Dubai, UAE is that it provides a single license which permits trading of more than one product. The business can utilise any office location in Dubai, it provides the facility of easy visa to the employee, a facility of problem free legal processing, usage of any currency, a facility of total 100% direct tax free benefit.
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Specific Industries Trade Licenses
For specific industries and institutional entities, there are different organisations which issue permissions and licenses. For example,
- For financial institutions like banks, the central bank of UAE gives the licenses and approvals.
- For insurance, the Ministry of Economy and Commerce gives the license.
- For Pharmaceutical and medical products business the licenses are issued by the ministry of Health.
- The Chamber of Commerce and Industry issues the license for commercial business in the UAE.
The process of getting a license is the same as registering a company with the government. It is important to find out which type of business activity you are going to undertake based on that license policy. The articles of association and memorandum of association should be submitted to the Department of Economic Development, the officials will review the documents and take appropriate action according to the requirements.
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Renewal of Trade License
Every year businesses have to renew their trade licenses and if the business entities function according to the business procedures in the UAE then renewal process is hassle free. The business has to comply with the rules and regulations of the government. The tenancy contract should be valid during the renewal of the Trade license. Getting the trade license and renewing it requires a lot of paperwork and documentation. If you are not aware of the legal requirements you can appoint consultants who can work on your behalf and get the work done for you. The UAE government provides various initiatives and encourages businesses to operate in the country.