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Trade License in Dubai: Commercial vs Professional

By Ananya - 26 Nov 2021 Last Updated: 11 May 2022
Trade License in Dubai: Commercial vs Professional

In Dubai, it is nearly impossible to start a business without a trade licence. Having said that, depending on the nature of your trade and your goals, you will need to find the appropriate trade licence for your company.

So, how many trade licences do you have? You can apply for a commercial licence, an industrial licence, or a professional licence based on a few key factors. In this article, we will concentrate solely on commercial and professional Dubai trade.

Which Government Agency is in Charge of Issuing a Trade Licence?

The Department of Economic Development is in charge of issuing commercial and professional licences to Dubai-based businesses. The regulatory body's approval is required if you want to establish your business presence and obtain a Trade Licence.

What Factors do you Consider when Deciding which Licence to Apply for?

There are a few key differences between the two licences that give them distinct advantages. Ownership, trade licence Dubai fees, share capital, and liability differ between Dubai trade licences.

The process of forming a company in Dubai begins when you apply for a business licence and begin conducting business activities with the Department of Economic Development (DED) or the Freezone Authority of your choice. In general, Dubai DED and some Freezone Authorities provide Commercial and Professional services, as described below:

  • A Commercial License is issued in Dubai to businesses and companies that will engage in trading activities. A commercial trade licence in Dubai is granted to a company for any type of commercial activity. In Dubai, both general traders and specialized traders can obtain a commercial trade licence. Retail businesses, construction firms, real estate firms, and other general entities must all obtain a commercial trade licence in Dubai.
  • A Professional License is a service-oriented licence that is granted to individuals who have a specific area of expertise and educational background. All service-oriented businesses must have professional trade licences. Dubai professional trade licences are granted based on the applicant's educational qualifications and area of expertise, and obtaining the trade licence involves a number of factors.

Commercial and professional licences are the most commonly obtained licences in Dubai because they are the easiest and least expensive to obtain.

What are the Various Types of Licences are issued in the UAE?

The following are the three main types of licences issued in the UAE:

  • A Commercial Licence is granted to a company that engages in any type of trading activity.
  • A manufacturing or Industrial Licence is granted to a company that engages in any type of manufacturing or industrial activity.
  • Professional Licences are granted to service providers, artisans, professionals, and craftspeople.

What is a Dubai Commercial Trade Licence?

Following is the explanation for Dubai Commercial Trade License-

Activity type

If the business activity involves the sale of tangible goods, the licence will be of the commercial variety. General Trading, electronic trading, software trading, and other activities that have been approved for the issuance of commercial licences are examples of activities that have been approved for the issuance of commercial licences.

Establishment ownership

 An expat or foreign investor can legally own 49 percent of the total shares in a commercial licence, with the remaining 51 percent owned by a UAE national or local service agent.

Capitalization of shares

The required minimum share capital is Dhs 300,000.

Fees for government licences

 A commercial licence will cost around Dhs 17,000 (approximately).

Liability

A commercial licence is granted to a Limited Liability Company, which allows shareholders to have limited debts and liabilities.

Is it necessary to form a partnership in order to obtain a commercial trade licence?

If the business will be operating in Mainland Dubai, a commercial trade licence will necessitate a partnership with a UAE national. It is essential that the business partner is a UAE national who owns 51 percent of the company's shares.

What is a Dubai Professional Trade Licence?

Following is the explanation for Dubai Professional Trade License-

Activity type

A professional licence is required if you want to use a specialised skill set or knowledge to provide a service for a fee.

Establishment ownership

An expat will have 100 percent ownership in a professional licence and can become the sole owner.

Capitalization of shares

To establish a company with a professional licence, a minimum share capital of Dhs 150,000 is required.

Fees for government licences

A professional licence costs around Dhs 11,000 (approximately).

Liability

The professional licence allows the licensee to start a business and assume sole responsibility for all debts and liabilities (unlimited).

Benefits of Obtaining a Commercial License

A commercial licence is granted to a company that engages in any type of commercial trade activity. General traders and specialised traders can both obtain commercial licences and operate in the region. A commercial trade licence is used to regulate and protect trading companies. Businesses in the retail, construction, and real estate sectors must also apply for commercial trade licences.

The following are the advantages of obtaining a commercial licence:

  1. To carry out a maximum of ten activities under a single commercial trade licence.
  2. There are several options for the type of company that can be registered.
  3. Several similar business activities can be carried out under a single licence.
  4. Establish a business relationship with the DED and the Registrar of Companies.
  5. Employees and company executives can apply for Residency Visas.
  6. Assistance with the establishment of Business Bank Accounts.
  7. Methods for renewing a commercial trade licence in the UAE at a low cost.

Documents required in Dubai for a commercial licence

You are usually only required to provide a few details and some basic documentation, whether you make your application yourself or through a company formation agent, such as:

  1. Form of application completed.
  2. Copy of the proposed owner's or owners' passport.
  3. Two passport-sized colored photos.

Read More: Cost and Document Require to get E-Commerce License in Dubai

The Benefits of Obtaining a Professional License

Professionalism is essential in a service-oriented business. As a result, specialists and professionals must each obtain a UAE professional trade licence in order to open a business in the country.

The following are the advantages of holding a professional licence:

  1. Professional licence holders pay a fixed annual fee; this option is appropriate for skilled professionals.
  2. Transparency in client interactions;
  3. Businesses are permitted to apply for employee visas.

Documents Required in Dubai to Obtain a Professional License

The documents required in Dubai to obtain a Professional License are as follows-

  1. Form for obtaining a professional licence filled out.
  2. Copies of owners' or partners' passports.
  3. A copy of the naturalization book of a local partner.
  4. If the ex-pat already has an employment visa, the sponsors must provide a No-Objection Certificate (NOC).
  5. If the shareholder is on a visit visa, he or she must provide his or her UID number.
  6. Foreign partners must provide a copy of their visit, tourist, or transit visa.
  7. Depending on the type of activity to be undertaken, preliminary approval from the relevant authorities is required (e.g., the Municipality, RTA, National Media Council, etc.)

Conclusion

Regardless of which trade licence in Dubai you apply for, it is critical that you renew your trade licence on time. Furthermore, there are numerous other considerations to make when applying for a trade licence in Dubai. Working with a Business Setup firm is the most cost-effective and time-saving way to deal with all of this. We can keep the process running smoothly while you concentrate on growing your business. And the best place to begin would be with Dhanguard.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides faster and hassle-free Trade License with minimum paper work. With the guidance of our professional team of consultants you will get General trading license, Freelance license, Etrader license, Event Management License, Travel Agency license in Mainland and Freezone in UAE.

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