The emirate of Dubai is home to numerous thriving entrepreneurial and SME networks in addition to globally recognized companies from the area and beyond. Each of these companies had to go through the painstaking process of establishing themselves and were established from the ground up with the goal to maintain long-term development.
As an investor, entrepreneurs must prepare themselves to navigate through the various stages of company formation in Dubai. Starting with the initial decision, “Where do they want to launch their business in the UAE?” – Dubai Mainland or one of the many Free Zones? Next, you must familiarize yourself with the policies, processes, advantages, and limitations of each jurisdiction. Finally, determine trade licensing services you may require to apply for based on the business activities you plan to offer.
Let’s take a look at both the UAE Mainland and Free Zone jurisdictions, and the trade licensing alternatives available in each so foreign investors can make a well-informed decision before setting up their business here.
DED Mainland Company Setup
If you wish to operate anywhere in the Middle East, aspire to work on governmental contracts, or may require external approvals, then UAE Mainland can be a better choice for your business.
UAE Mainland allows foreign investors to choose from 2,500 different business activities falling under six unique categories. Each category requires a separate trade license for your business setup in UAE Mainland.
Once you clearly define your business activities, you will need to select a trade license that best aligns with your chosen business activities in order to apply for your DED company setup or Free Zone Company Formation in UAE.
The six trade licensing alternatives for UAE Mainland are:
- Commercial
- Industrial
- Professional
- Tourism
- Agriculture
- Craftmanship
Let’s take a look at each of these trade license services below:
1. Commercial:
Companies that participate in any commercial trade activity or offer physical services such as general trading, specialized trading, medical care, transport, contracts, land property, etc., are granted commercial licenses.
A Limited Liability Company is the most popular corporate structure under a commercial license that allows 49% foreign ownership with 51% owned by an Emirati partner following a Memorandum of Agreement (MOA).
2. Industrial:
Companies that participate in industrial, construction, or manufacturing activities, such as converting raw materials or natural resources into finished goods and distributing them for profit, are granted industrial trade license services.
Similar to the commercial license, it also requires the foreign investors to partner with a UAE local (individual or corporate) holding 51% of their shares without any involvement in their business operations or claims in their profits or losses.
3. Professional:
Individuals or consultancy firms who offer intangible services based on their expertise, intellectual capabilities, and technical skills are granted professional trade licenses. This includes services from professionals like attorneys, accountants, architects, consultants, etc.
The professional license allows its holders 100 percent ownership, given the investor partners with an Emirati who will represent him as his local service agent or a local sponsor.
4. Tourism:
The three travel agency types; Operators of inbound tourism, outbound tourism, and travel agents, all are eligible for a DED tourism license. So, every kind of tourist-oriented business, including travel agencies, restaurants, hotel chains, beach resorts, cruise boat rentals, tourist centers, and so on, can operate freely in UAE Mainland after getting their tourism license from authorities.
5. Agriculture:
Landowners who want to produce crops, run animal farms, or fisheries in their properties are granted Agriculture Trade license services.
6. Craftsmanship/Occupational:
Craftmanship licenses are issued to the individuals who produce crafts and other independent handcrafted items to generate profit. Entrepreneurs can issue each craft license by partnering with a local sponsor or a local service agent.
This category includes business activities like printing, blacksmithing, carpentry, etc., and artisans under this license focus on the physical exertion or usage of equipment & materials.
Free Zone Company Setup
With over 40+ UAE Free Zones, setting up a company in a Free Zone is one of the most popular choices among international investors primarily due to the following attractive factors:
- Complete Foreign Ownership
- Accessibility to the global market
- Infrastructure of the highest caliber
- Company setup without taxation
- Exemption from Customs
- Simple Company Formation Procedure
- And many other benefits
And like DED Mainland, Free Zone License UAE also falls under various categories, which includes the following:
- Commercial License: For businesses who conduct trading activities in the free zone and outside the UAE.
- Industrial License: For companies engaging in manufacturing and import-export activities.
- Professional License: For service-oriented businesses.
- General Trading License: For investors who trade in a broad category of products and commodities.
- Manufacturing License: For companies that operate in the production of various products.
- Warehousing License: For investors who want to fulfill different logistics requirements such as storage and distribution.
Start with Your Business Setup Trade License
Now you know all the trade license options for your business setup in the UAE. However, it is also necessary to understand other underlying factors. For example, DED Company Setup allows business owners to trade directly with any Mainland company in the UAE without restrictions or collaboration requirements with a local distributor. Moreover, you can also pitch for lucrative projects with the governmental bodies irrespective of where they operate within the UAE.
Yet, this is not the case with a Free Zone company formation. Instead, it only allows the investor to carry private commercial projects and trade solely within the confinements of their licensed Free Zone.
Get Turnkey Trade License Services with TLC
Trade License Co. provides turnkey licensing solutions to make your DED Mainland and Free Zone business setup as simple as possible. Our experienced advisors carefully analyze the markets and your business requirements and ensure your business activities, corporate structure, and trading license are all in line with the imaginative objectives to have in mind for your business.
With our stellar reputation in the business formation sector, Trade License Co. has successfully incorporated hundreds of businesses in the past years, which makes us confident to assist you in getting your company a promising start.
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