Dubai is a hotbed of international trade. It has attracted investments from all over the globe on a scale never imagined before. It is not the result of some serendipitous event; Dubai’s well-regulated economy gives this mega city the much-needed financial stability which in turn gives investors the confidence to bring businesses here. You cannot do business in Dubai without acquiring an appropriate license. The Department of Economic Development (DED) is responsible for monitoring and regulating the economic activities outside the designated purview of free zones. It is the authority vested with the power to issue licenses & trade permits, setting rules for business hours, and classifying the business activities legally permitted within the jurisdiction of Dubai mainland. DED also directly deals with investors both local and foreign. The Department of Economic Development is a government agency responsible for issuing licenses, checking the status of business transactions, trade license renewals & revocations, and other general trade & investment related activities.
A host of bureaucratic and legal hurdles are faced by entrepreneurs wishing to incorporate or register a new company in Dubai. AWS-ME helps and guides you deal with any routine or untoward situation arising from the process of getting a company incorporated.
Here is some information you need to know about how to get a license in Dubai.
Steps for obtaining a Dubai trade license include:
- Choose and reserve a name for your company
- Apply for registration
- Get your company’s Memorandum of Association notarized by DED
- File company documents
- Get an Establishment Card or apply for it at the Ministry of Labour
- Register native workers with the Ministry of Labour
- Register native workers with the General Authority for Pension and Social Security
Choose & Reserve a name for your company and Apply for registration
In order to get your company incorporated or registered, you have to submit a registration application, in which you as investor try to obtain initial approvals from the License Issuing Section of the Department of Economic Development which would sanction your business activities, name of the company, and verify the identity of the partners holding a legitimate stake in the company. At DED, you have to check the availability of the name you have chosen for your company, and then reserve the name you think is most appropriate for your business concern, and make the required payment which can be made online on the official website of the Department of Economic Development.
Notarize the company’s Memorandum of Association (MOA)
The next step in registering a company includes notarization of the Memorandum of Association from the Department of Economic Development. The process usually takes a day for completion. The applicant’s lawyer takes the initial approval from the notary earlier so that when the applicant arrives at the agreed upon time, he can get his document notarized on time.
File company documents
The investor must make a file of company’s documents and submit them to the Department of Economic Development and obtain a trade license after which he must apply for membership of the Dubai Chamber of Commerce and Industry (DCCI). In order to get a Trade License and Commercial Registration Certificate issued, applicants have to make submission of the following original documents at the Commercial Registry – a section of DED. Applicants can also make this submission of original documents online as well.
- The approved application form with the signature of company’s manager or company’s legal representative(s) on it.
- The original Memorandum of Association.
- Letter by DED approving the name of the company
- Original company approval letter by DED’s Committee of Limited Liability Companies.
- Copies of Passports of all the partners.
After the submission of required documents, the Commercial Registry decides whether or not the documents are valid, sans legal or other discrepancies, and in proper order. Then the name of the company is formally entered into the Commercial Register. After that, Department of Economic Development sends the following documents to the Federal Ministry of Economy for publication:
- A copy of a Notarized memorandum of association (MOA).
- A copy of the application for entry of the company’s name in the Commercial Register.
- The exact entry of the company’s name in the Commercial Register is also sent to the Federal Ministry of Economy
Once it is done, the company has to apply for a Trade License which will be issued by the Department of Economic Development (DED). The company cannot start its operations before it has received the Trade License. The notary public at the Commercial Registry notarizes the MOA, then the license application form is completed which is written in Arabic, and on this application form company’s signatory’s signature are affixed and then the duplicate of that document is filed and submitted to the Department of Economic Development. The DED keep a copy of this form in its records and sends another copy to the Federal Ministry of Economy.
The application for the issuance of Trade License is to be filed with the applicable fee and these documents:
- The proposed name for the company must be written in Arabic and English along with the rest of necessary information filled in the application form.
- The original document of lease of land for the company’s office premises.
For the sustainability of the office premises prescribed a form for obtaining the Dubai Municipality Building Department’s clearance.
Business activities fall into following categories of licenses:
(1) Commercial licenses
(2) Professional licenses
(3) Industrial licenses
Once this process is finalised, the DED issues the Trade License and Commercial Registration Certificate to the company. This Trade License and Commercial Registration Certificate is issued upon the presentation of receipts which show that the payment to the Federal Ministry of Economy for the publication of documents sent by DED has been made and also the membership fee for joining the Chamber of Commerce submitted. After that, the Trade License for Limited Liability Company (LLC) is issued.
Applying for the establishment card
Establishment Card is issued by the Ministry of Labour. If the Trade License is issued and fees have been duly submitted, Establishment Card can be obtained on the same day. A representative of the company or the owner himself can go to apply for the establishment card.
Register native workers with the Ministry of Labour
The Ministerial Decree No 1215/2005 states that all native workers must be registered with the Ministry of Labour. The following documents are to be required for submission during the registration process:
- A copy of the Trade License
- Copies of the employment contracts
- Passport copies of the employers
- A Proof that the worker is a UAE citizen
Registration of native workers with the General Authority for Pension and Social Security
During the process of registering native workers, it is also incumbent upon the company to register native workers with General Authority for Pension and Social Security. In this process, native worker’s updated salary certificate and contract are included.
Types of Dubai Trade License
There are four types of Trade Licenses which have been classified according to the nature of the business falling into one of the four categories mentioned here below:
- Commercial License
- Industrial License
- Professional License
A business entity that engages in trading activities like buying and selling goods in Dubai is issued a Commercial License. That business entity is not allowed to do anything outside the purview of the Trade License.
Businesses that do manufacturing or any other type of industrial activity will have to obtain an Industrial License. Anything not mentioned in the license cannot be manufactured. In order to obtain this Trade License, the company has to have a physical office in UAE.
Service providers and other professionals are issued a Professional License. This license guarantees 100% ownership of the company. Following are the type of businesses require professional license:
- Law firms
- Management consultancy
- Educational institutions
- Information technology services
- Auditing companies
- Accounting companies
- Marketing consultancy
- Medical services
Companies engaged with the business of promotion of tourism and travels are issued Tourism Licenses.
Dubai Business license registration and approval process
- It is imperative for a financial institute or bank wanting to start operations in Dubai to obtain approval from the UAE Central Bank before applying for a Trade License.
- Manufacturing companies will have to get approval from Ministry of Finance and Industry before a license can be issued to them.
- An insurance business company or a company that does something similar in nature to the work of an Insurance company must have the approval of the Economy and Commerce Ministry before a License can be issued to it.
- Healthy Ministry’s approval is required for a medical and pharmaceutical company before a license can be issued to such a company.
- Companies engaged in oil & gas business must obtain endorsements and approvals from a number of government agencies.
Requirements for business ownership
The UAE Commercial Companies Law requires, barring companies holding a professional license, that companies or businesses in Dubai or UAE “must have one or more UAE National partner(s) who hold at least 51% of the company’s capital”. Companies involved with Oil & Gas business are exempt from the 51% requirement and are given certain concessions.
Certain companies are exempt from the 51% ownership requirement if certain provisions are met:
- Companies established in the UAE Free Zones or Free Zones in Dubai are given exemption from this rule.
- Companies established in areas where the law supports and permits 100% local ownership.
- Professional companies or artisans or doctors or architects holding a professional license are allowed to have 100% ownership but they must accommodate a UAE national as a service agent.
Foreign companies wanting to establish a branch office in Dubai or UAE are also exempt from the ownership requirement.
Business setup as a representative or branch office
Foreign companies wanting to establish a branch office in Dubai or UAE are also exempt from the 51% ownership requirement. In this case, either the company is 100% owned by a UAE national or a local UAE national is appointed as an agent of the company. The UAE Commercial Companies Law governs the rules of company establishment in UAE.
Dubai company registration process
The registration process of a company is mentioned here stepwise:
- Choose & decide who is going partner with the company or a local sponsor
- Decide the role played by the local partner in the company matters
- Decision on the fee the company is prepared to pay each year
- Choose & reserve a name for the company and get requisite approval for the name and business activities from the Department of Economic Development.
- The application submission is made to the Department of Economic Development
- Find a suitable place for office premises and get a tenancy contract
- This contract is necessary for getting the company registered
- Development of Memorandum of Association (MOA) with the sponsor and submit it to the Department of Economic Development
- Any legal firm can be hired for the development of MOA which is going to highlight business activities, special arrangements, and share of the partners in the company
- MOA and the License application to be submitted to the Department of Economic Development along with the required legal documents and the tenancy contract.
Applicable fees and charges will have to be paid and a trade license can be obtained a week or two after the submission of application.