Company Formation the Smart Way !
Dubai welcomes foreign investments greatly, and to start a business in Dubai you need a trade license, which is the most important document. Dubai offers different business models to choose from for foreign investors. The Department of Economic Development is the authority responsible for regulating business activities for all businesses outside the free zones. Its responsibilities include licensing, classifying permitted business activities within Dubai, and issuing trade licenses to conduct business in the local market. This department operates from different locations to provide licensing services; the main office is located near the Deira Clocktower in Dubai, UAE.
Steps to obtain a trade license in Dubai
- Reserve company name and apply for initial approval.
- Notarize the company’s Memorandum of Association (MoA) at DED.
- File company documents.
- Apply for the establishment card at the Ministry of Labour.
- Register Emirati workers with the Ministry of Labour.
- Register Emirati workers with the General Pension & Social Security Authority.
Reserve company name and apply for initial approval
First, file a registration application. The investor must obtain initial approvals from the Licensing Section of the Dubai Department of Economic Development (DED) for the proposed business activities, then reserve the trade name.
Notarize the company’s Memorandum of Association (MoA)
The applicant notarizes the standard MoA at DED. Notarization takes no more than one day. We will assist you in preparing the MoA per local laws and regulations.
File company documents
Investors file their company documents with DED and then register for membership at the Dubai Chamber of Commerce & Industry (DCCI). To obtain the Trade License and Commercial Registration Certificate, investors must submit the following original documents to DED’s Commercial Registry (documents may also be submitted online):
- The approved application form, duly signed by the company’s manager or legal representative(s)
- An original notarized MoA
- A letter from DED approving the company name
- The original letter of company approval issued by DED’s Committee of Limited Liability Companies
- Copy of each partner’s passport
If the registry finds the documentation in order, the company name is entered into the Commercial Register. DED then sends these documents to the Federal Ministry of Economy for publication:
- Copy of the notarized MoA
- Copy of the application for entry of the company name in the Commercial Register
- Extract of the Commercial Register entry
Before operations can begin, the company applies to DED for a trade license. After notarization by the Commercial Registry, a license application form (in Arabic) is completed, signed by the authorized signatory, and filed with DED in duplicate. DED files one copy and forwards the other to the Federal Ministry of Economy.
The trade license application must be filed with the applicable fee and the following documents:
- The proposed company name in Arabic and English, on the prescribed form
- The original lease for the company’s office premises
- Dubai Municipality Building Department clearance for the premises
- Apply for the establishment card
With the trade license issued and fees paid, the company owner or representative applies for the Establishment Card at the Ministry of Labour. It can be issued the same day.
Register Emirati workers with the Ministry of Labour
Under Ministerial Decree No. 1215/2005, all Emirati employees must be registered with the Ministry of Labour. Required documents:
- Copy of the employment contract
- Copy of the employer’s passport
- Copy of the trade license
- Proof of Emirati citizenship
Register Emirati workers with the General Pension & Social Security Authority
Companies must also register Emirati workers with the General Pension & Social Security Authority by submitting their salary certificates or labour contracts.
Company Formation the Smart Way !
Types of Dubai Trade License
Trade licenses have been categorized into four types which are to be issued in Dubai, UAE. Depending upon the nature of the business activity an entity plans to start, a license in one of these categories will be issued by the Department of Economic Development (DED):
- Commercial License
- Industrial License
- Professional License
- Tourism
Commercial License
Commercial license is to be issued to an entity that will engage in any kind of trading activity like buying and selling goods. Individuals or companies having a commercial license in Dubai can only perform the activities mentioned in the license.
Industrial license
Industrial License is to be issued to an entity that will engage in manufacturing or any type of industrial activity. For this type of license, you need to have a physical office in UAE. Entities are only allowed to manufacture the items for which they have obtained the license.
Professional license
Professional License is to be issued to service providers, professionals, etc. This type of license guarantees 100% ownership of the company. Following are the type of businesses requires a professional license:
- Law firms
- Management consultancy
- Educational institutions
- Information technology services
- Auditing companies
- Accounting companies
- Marketing consultancy
- Medical services
Tourism licenses
Tourism licenses to be issued to companies or individuals who are willing to engage in the business of tourism and travel.
Dubai Business license registration and approval process
- For the Issuance of licenses of banks and other financial institutions first, you must have the approval of the UAE Central Bank
- For the Issuance of licenses of manufacturing companies first, you must have the approval of the Finance and Industry Ministry.
- For the Issuance of licenses of companies engaged in insurance and other related firms first, you must have the approval of the Economy and Commerce Ministry
- For the Issuance of licenses for medical and pharmaceutical products first, you must have the approval of the Health Ministry
- For the companies involved in gas or oil production, you must get additional endorsements and approvals from other government agencies
Business registration in Dubai, UAE must also have the involvement of the Dubai Chamber of Commerce and Industry
Requirements for business ownership
With the exception of those companies having a professional license all other companies/businesses set up in Dubai or anywhere in the United Arab Emirates are required to have no less than fifty-one percent 51% shareholding by a UAE national.
Below are few exceptions where 100% foreign ownership is allowed:
- Any company established at any of the Free Zones in Dubai or anywhere in UAE.
- Where the law requires 100% local ownership.
- In case of an artisan or professional company which allows total foreign ownership.
- A foreign entity registering a representative or branch office in Dubai or UAE.
- In case a professional license is being applied for professions such as architect, doctor, artist, etc. in this case foreign ownership can be 100%. However a local national must be taken as a service agent.
Business setup as a representative or branch office
A branch in Dubai or a representative office of a foreign company in Dubai is allowed 100% foreign ownership. This is only allowed on the condition that a local agent is appointed and the local agent must be a UAE national or a company is 100% owned by UAE nationals. The business registration in Dubai as a branch or representative office is covered by the Commercial Companies Law.
Dubai company registration process
Here is the step by step method of company registration process in Dubai, UAE
Step 1
- Decide who is going to be the partner or local sponsor.
- Decide the role of the local partner in the company.
- Selecting the fees you are prepared to pay per year.
Step 2
- Decision of a name and activity approval from Department of Economic Development
- It can be applied on a standard application form and submitted to the Department of Economic Development
Step 3
- You would also need to look for business premises and also you need a tenancy contract
- You must have business premises evidenced by a tenancy contract in order for your business to get registered.
Step 4
- Develop a Memorandum of Association (MOA) with the sponsor and submit it to the Department of Economic Development
- Memorandum of Association (MOA) can be developed by any legal firm which must specify the special arrangements and ownership percentage of all partners.
Step 5
- Submission of the MOA and the License application in the Department of Economic Development along with the required legal documents and the tenancy contract.
- With your application, you have to pay all charges and fees. You should get a license after a week or so after submitting your application.
Company Formation the Smart Way !
