Dubai Trade Licence
The trade licence serves as a type of permission slip that gives one the eligibility to conduct their operational processes. A Dubai business licence is an official document, issued by the authority in charge, that allows the holder to conduct requested activities in the permissible territories inside/outside the UAE. All the Dubai mainland trade licences are granted and regulated by the Department of Economic Development. A General trading licence holder in Dubai can indulge in the import and export of goods in addition to commercial activities. Businesses registered in Dubai Free Zones and professionals providing industry-specific services are also eligible to apply for a Dubai trade licence.
What are the Types of Trade Licence in Dubai?
Find out about the different types of legal company forms categorized under the Dubai Economic Department and which type of trade licence may be applicable to you.
As the term states, a single individual owns and operates this type of business for this type of Dubai trade licence registration. 100% ownership and control are given to the individual to operate and keep profits. They could also be held accountable for all the debts and liabilities of the company.
UAE or GCC nationals are only allowed to own industrial or commercial types of these businesses. Any consultancy activity engaged by the owner of a Sole Proprietorship requires such scientific qualification.
Sole Proprietorship Professional licences can be owned by any nationality. If he/she is a non-GCC national, a Local Service Agent is required. Corporates cannot hold these companies.
One Person Company (LLC)
The Dubai trade licence registered for a Person Company (LLC) can be owned by a single person or a corporate body. Although similar to Sole Proprietorship, the liability is limited to a single owner’s share. Only a local / GCC national / decree-holder (acc. to the procedures) or a corporate body can own a One Person Company (LLC). It is mandatory to have a minimum of 1-11 managers on the trade licence in Dubai. The Memorandum of Association determines the Capital of the Company.
Civil Companies are for professionals like accountants, doctors, engineers, and lawyers who enter into a business partnership. Partners can be of any nationality and are permitted to practice professional activities while keeping up with DED business guidelines. Non GCC owners would require a Local Service Agent to register their Dubai trade licence. An Engineering Civil Company must have a UAE national as a partner who owns at least 51% of the business and an engineer by profession and practicing the same as the activity. A Civil Company having consulting activity must have professional partners of the same business activity as 100% owners. According to DED laws, only one manager can be appointed. The Memorandum of Association should not specify the Capital for the company. The Business name on the trade licence certificate should be in accordance with the commercial activity of the firm.
Limited Liability Company (LLC) Dubai Trade Licence
An LLC company is one of the most familiar types of company formation in the UAE. Shareholders under this type vary from 2 to 50 persons. Liabilities are limited to each person’s share in the company. LLCs can be transformed into any other legal form, except for a public sharing company. These types of businesses are permitted to practice any commercial, industrial, professional or tourism-related activities. 100% ownership allowed for GCC nationals and at least 51% for UAE nationals. Any ex-pat can own LLC as a partner to the UAE national, keeping up with DED regulations.
Private Shareholding Company
A Private Shareholding Company is also known as a Private Joint-Stock Company is formed by a partnership of 2-200 individuals. An investment of a minimum of AED 5 million is required by the partners. A PJSC can be owned by partners of any nationality in accordance with DED business laws. Previously, it was mandatory to give at least 51% company ownership to UAE nationals but after the new amendment in the UAE Commercial Company Law came into effect on 1st June 2021, just like GCC nationals, other foreign nationals can also enjoy 100% ownership of their company. Any commercial or industrial type of business can be carried out by a Private Shareholding Company, but not professional activities.
Public Shareholding Company
In a Public Shareholding Company, the share capital is transferrable and divided into equal values. At least 5 founding members should be UAE nationals having ownership of 30% to 70% of capital shares. It is mandatory to have a maximum of 5 appointed managers. Any industrial, commercial or professional business activities as per DED regulations are permitted under this legal form. Ownership is not restricted to any nationality or corporate body. Public Shareholding Company can sell and waive branches to any party or company. The owners are also permitted to change the company’s legal form according to DED procedures.
A single business where two or more people share ownership and every partner exercises rights towards all aspects of the business and administration unless otherwise agreed upon by a contract. Partnership companies are 100% owned by UAE nationals and cannot be owned by other nationalities even of GCC countries and corporate bodies. Commercial and industrial activities are only permitted for such companies. The owners are jointly and individually responsible for the company’s liabilities. Only one manager is allowed according to DED business regulations. Partnership Company can sell and waive branches to any party or company. The owners are also permitted to change its legal form according to DED procedures.
Simple Limited Partnership
Simple Limited Partnership companies are formed by a partnership of a minimum of 2 partners – one general partner and one limited partner. General partners are liable to the extent of their personal and business assets for the company’s liabilities whereas limited partners are only liable to the extent of their share of business capital. This type of company can only conduct commercial and industrial activities. UAE nationals must be the general partners, and foreign nationals can be limited partners. There is no limit on the ownership of shares between the partners. Limited partners cannot intervene in the management or administrative issues related to other partners; by doing so, they would be held responsible for all the business obligations.
A single business where two or more people share ownership and every partner exercises rights towards all aspects of the business and administration unless otherwise agreed upon by a contract. Partnership companies are 100% owned by UAE nationals and cannot be owned by other nationalities, even of GCC countries and corporate bodies. Commercial and industrial activities are only permitted for such companies. The owners are jointly and individually responsible for the company’s liabilities. Only one manager is allowed according to DED business regulations. Partnership companies can sell and waive branches to any party or company. The owners are also permitted to change their company’s legal form according to DED procedures.
Branch of a Foreign Company
The Parent Company holds 100% ownership of the branch and has to operate under the same name and perform the same activities as the parent company. It requires a Local Service Agent (LSA) which can be a UAE national or a company owned by one or more UAE nationals. Such companies are allowed to engage in professional activities and some commercial and industrial activities. Authorization is required from the Ministry of Economy for practicing commercial and industrial activities in order to obtain a Dubai trade licence.
Representative Offices are not permitted to carry out business operations but exist to promote and market the parent company’s products and services. It requires a Local Service Agent (LSA) who can be a UAE National or a company owned by one or more UAE nationals. The LSA provides services necessary for the company and bears no financial liabilities or obligations of the Company or any of its branches.
Branch of a Dubai-based Company
A Branch of a Dubai-based Company is wholly owned by the parent company and undertakes one or more of the activities listed in the primary mainland trade licence in Dubai. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main trade licence of the company in UAE. A branch manager is appointed to handle the administrative tasks of the branch. Although the trade name has to be identical to the parent company, it can differ if followed by the phrase “A branch of the (Parent Company)”
Branch of a UAE-based Company
A Branch of a UAE-based Company is fully owned by the parent company and undertakes one or more of the activities listed in the main licence. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main licence of the company. It is required for the branch to have a name identical to the parent company. However, if the name of the parent company has been previously registered in Dubai, then the parent company must change its name.
Branch of a GCC-based Company
A Branch of a GCC-based Company is fully owned by the parent company and undertakes one or more of the activities listed in the main Dubai trade licence. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main trade licence of the company. As GCC countries follow different rules regarding combining activities under business licences, only activities under the same category in Dubai will be accepted even though it is included in the main trade licence of the company. It is required for the branch to have a name identical to the parent company. However, if the name of the parent company has been previously registered in Dubai, then the parent company must change its name.
Branch of a Free Zone Company
Freezone Companies in the UAE are permitted to expand business operations to the mainland if the activity they engage in is authorized on the mainland. The Freezone company can open a branch on the mainland only if there is a Local shareholder who owns more than 51% of the main company. Otherwise, approval from the Ministry of Economy and a Local Service Agent is required. If GCC nationals own 100% of the free zone company, no LSA is required.
Intelaq (Home-based business for UAE nationals)
An Intelaq Licence can only be obtained by UAE nationals. This type of trade licence in Dubai is issued for home-based companies and can be for any professional, trade or artisan business. It must be rational for operations in residential areas. There must be no ecological harm, health hazard or noise that may cause disturbance to neighbours. It can be a Sole Establishment, LLC, Civil Company and Partnership. Such licences cannot have employees under them or hire external staff but may deal with contractors. Only one licence is permitted for an Intelaq, licence holder.
The Dubai Trade Licence for SMEs is granted to businesses with 100% UAE national ownership and can be of any legal form. The registered trade licence in Dubai is valid for 3 years, and the owner may sponsor employees. No foreign ownership is allowed.