Business licenses in Dubai are vital for all types of company formation procedures. Setting up a company in the UAE can be an exciting prospect, but there are several factors to consider. The most important aspect, however, is the licensing process.
In this article, you will get a comprehensive overview of the various types, structures, and procedures associated with Dubai business licensing. Let us observe:
1. Why should you consider Dubai for establishing your commercial activities?
2. Why does the UAE require companies to obtain a business license?
3. What is the local entity in charge of issuing business licenses in Dubai?
4. Types of business licenses available
5. How to select the most suitable type of license?
6. What is the process to obtain a business license in Dubai?
7. The license renewal process
8. How can we help you obtain a license to start operating in the region?
1. Why should you consider Dubai for establishing your commercial activities?
Dubai is a multicultural city that is within eight hours of two-thirds of the world’s population; this allows it to serve as a nexus for the East and West, as well as the heart of the Africa-Middle East-Asia triangle.
Due to its rapid growth, strategic location, and favorable business culture, Dubai has earned the reputation of being the best place to do business. But, what statistics back up this theory? The World Bank’s Doing Business study examines economic regulations in 190 countries worldwide.
The World Bank used Dubai in its methodology when examining the UAE. In the recently released 2020 edition, the UAE was ranked 17th in the world and had the region’s largest economy, outpacing its Gulf counterparts. According to the study’s criteria, the UAE is:
- The easiest country to obtain electricity.
- The third-best for obtaining construction permits.
- The ninth-best for enforcing contracts, and the tenth-best for registering property.
1.1. What does the country aspire to?
The country aspires to be at the top of these rankings, and many of the “smart” services available to UAE-based businesses are working to make the process off business setup more efficient than ever. As part of the Emirates Blockchain 2021 Initiative, these efforts include putting many bureaucratic procedures on blockchain technology.
One of the hallmarks of the UAE’s enterprise is the ease with which you can establish businesses.
1.3. Why do investors want to open businesses in Dubai?
Here are the top reasons why Dubai is an excellent place to start a business.
1.3.1. A rapidly expanding economy
If you have been looking for a welcoming economy with a liberal trade regime for business, Dubai is the place to start. Dubai’s economy is well-known for being welcoming to traders from all over the world.
Regardless of your industry or budget, there are numerous opportunities to establish a business in Dubai and watch it grow at an unprecedented rate. Intuitively, starting a business in a growing economy seems to have a higher chance of success with customers. And Dubai outperforms every other city in this category.
1.3.2. Beneficial laws
The UAE government provides numerous opportunities for foreign investors to establish their businesses. Different laws are put in place in the market to provide a safe environment for businesses of all sizes and budgets.
It is a fact that the government is constantly changing the laws to make them more favorable to foreign investors. Furthermore, documentation and legal procedures are expedited to ensure consistency in licensing, registration, and other processes.
1.3.3. Workforce collaboration
You may have noticed a large influx of workers to Dubai in search of work and a better way of life. With Dubai’s thriving economy, both skilled and unskilled workers can find suitable employment. As a result, if you open a business in Dubai, you will have a variety of workforce options.
While having the right hands to help your business grow is essential, you will never be short of them in Dubai.
1.3.4. Best-in-class infrastructure
The UAE government provides world-class infrastructure that you can use for your own business in Dubai:
- Transportation.
- Healthcare facilities.
- Education.
- Business parks.
- Corporate spaces.
1.3.5. A warm climate
Everybody knows the people of Dubai for their friendliness and hospitality. Even if you have never been to the city before, you will feel right at home and welcomed. Starting a new business in a company of supportive and optimistic people is always a good idea.
You can easily find the right partners, a supportive workforce, advisors, and friends in Dubai who will help you grow and support you in difficult times. Furthermore, it is a huge benefit to the company if the natives welcome and treat everyone equally.
1.3.6. Location
The location is one of the most important aspects of starting a business. You may have a great idea, great suppliers, a hardworking team, and appropriate investments. However, if you are unable to locate a suitable location for your company, nothing else will matter.
When it comes to Dubai, there is not a single location that is not ideal for starting a business. From the Mainland to the Free Zones, the possibilities for establishing a business in Dubai are limitless.
1.3.7. Trouble-free connectivity
Another aspect that entrepreneurs must consider when starting a business is transportation. You may need to travel outside of the country frequently for business meetings or to transport your sellable goods. This necessitates seamless transportation to carry out business activities smoothly.
Additionally, Dubai has excellent air connectivity, making it an ideal location for establishing a business. Thousands of flights to and from Dubai are available from all over the world.
1.3.8. Opportunities galore
Every year, Dubai provides entrepreneurs with exciting opportunities to explore their markets. For example, the World Expo 2020, which took place in October 2021, was expected to provide a suitable market for small and medium sellers looking to expand their business and seek new opportunities.
Because of the high traffic, sellers can explore possibilities, make connections, and find the best ideas for starting a business in Dubai.
1.3.9. Access to markets is uncomplicated
Another factor that makes Dubai a great place to start a business is its proximity to international markets. Because Dubai is a global commercial hub, market giants from almost every industry and domain can be found there.
This can open up global opportunities, international trade, abundant human resources, and unprecedented growth potential.
1.3.10. Tax exemptions
Because of the frightening tax provisions, most investors with great ideas are hesitant to enter an international market. Dubai, on the other hand, is one of the most tax-friendly places to set up shop.
If you establish your business in a free zone, you will be exempt from all taxes. Similarly, there are no corporate or income taxes, as well as a 30% reimbursement for internal cinema and TV-sponsored spending. As a result, profiting in Dubai is simple.
If you would like to have a better understanding of taxation in the UAE, we offer tax consultancy services.
2. Why does the UAE require companies to obtain a business license?
A business license issued in Dubai certifies your company as a legal entity authorized to conduct business. Not only that, but the business license also identifies you and your company.
It holds you accountable for your commercial transactions while also protecting the public’s health and safety. On the other hand, it enables governmental entities to regulate and monitor commercial activity in the city.
3. What is the local entity in charge of issuing business licenses in Dubai?
The Department of Economic Development (DED) is a government agency in charge of licensing companies and individuals who want to conduct business in Dubai. Therefore, in Dubai, business licenses are issued by this entity.
Dubai DED is the entity that not only issues business licenses but also regulates business licensing procedures.
A DED-licensed business is commonly referred to as a “local company.” It is important to note that the Department of Economic Development only registers and licenses mainland companies, whereas free zone companies are licensed by private authorities.
4. Types of business licenses available
In Dubai and throughout the UAE, there are four main types of business licenses.
- A commercial license is for general trading businesses.
- You need a professional license for businesses that provide services.
- Industrial licenses are for the production of goods.
- A tourism license is meant for the travel and tour industry.
Business licensing is the first step in starting a business in the UAE. However, you should be aware that the system of business licensing is managed by various agencies and jurisdictions.
5. How to select the most suitable type of license?
In Dubai, all business licenses are industry-specific. While some licenses are appropriate for certain businesses, others may not be compatible with the related business activities. This means that you can apply for a business license based on your industry, business activity, company structure, and so on.
However, the license’s suitability varies depending on the business. In addition, the region in Dubai in which you decide to establish your business plays an important role in determining the best business license for you. The proper course of action would be to seek the advice of a company formation expert.
An expert can analyze and advise you based on your commercial needs and the company’s future goals. For this reason, at Connect Group, we offer you the best company formation services.
6. What is the process to obtain a business license in Dubai?
Now that you have learned everything there is to know about the various business licensing options, you are probably wondering how to get a business license in Dubai. What documents are needed to license your company? Or are there any major requirements for obtaining a Dubai business license?
Licensing requirements vary according to jurisdiction and business activity. However, if you choose a mainland license in Dubai, the following are the most likely requirements:
- During the process of applying for a business license in Dubai, one of the business partners must be present.
- Passport copies of all business partners and managers are required depending on the business activity.
- A letter of authorization from the company’s sponsor for ex-pat investors or foreign partners.
- Copies of all business partners’ residency visas
- You must determine your company’s business activity and legal structure, as well as reserve the trade name.
- In addition, an initial approval from the DED, as well as any required external approvals, must be submitted with the application.
- The tenancy contract for the office space and Ejari is also required to obtain a business license in Dubai.
In addition, a PRO submits all of these documents to the Department of Economic Development (DED). And the license is issued once the fees are paid. Plus, you can read our article about why employers need PRO services.
7. The license renewal process
In Dubai, business licenses must be renewed on an annual basis. Companies and commercial entities must go through the documentation process to renew their business license. In addition, the business license must be renewed before the due date, as late renewals incur a penalty.
Note that the renewal of a business license in the UAE can become much easier with the assistance of a business setup service provider, like us.
8. How can we help you obtain a license to start operating in the region?
Connect Group is the only place where you can get all of your business setup services under one roof. Our business setup consultants can assist you in selecting the appropriate license for your company. We also help you understand the steps involved in obtaining a business license.
Connect Group also communicates with the Department of Economic Development (DED) for all licensing processes and ensures you receive all business approvals. We not only assist you in obtaining a business license, but we also renew it annually so that you can avoid delays and penalties.
Would you like to contact our team to obtain more information about business licenses in Dubai? If you have any questions, call us at +971 43 316 688. Write us any questions you may have at contact@connectgroup.co. We are eager to hear from you!
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