Types of Trade license in Dubai

Types of Trade license in Dubai

Find out more about the different types of legal company forms categorized under Dubai Economic Department and which type of trade license may be applicable to you

Sole Proprietorship

As the term says, a single individual owns and operates this type of business for this type of trade license registration in Dubai 100% ownership and control are given to the individual to operate and keep profits. He 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 type of these businesses. Any consultancy activity engaged by the owner of Sole Proprietorship requires such scientific qualification.

Sole Proprietorship Professional licenses can be owned by any national. If he/she is a non-GCC national, a Local Service Agent is required. Corporates cannot hold these companies.

Civil Company

Civil Companies are for professionals like accountants, doctors, engineers, and lawyers who enter into a business partnership. Partners can be of any nationality is permitted to practice professional activities keeping up with DED business guidelines. Non GCC owners would require a Local Service Agent to register their trade license in Dubai. 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 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 license certificate should be in accordance with the commercial activity of the firm.

Limited Liability Company (LLC) Trade License

An LLC company is one of the most familiar types of company formation in the UAE. Shareholders under this type vary from 2-50 persons. Liabilities are limited to each person’s share in the company. LLC’s can be transformed into any other legal form except for 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 expat can own LLC as a partner to the UAE National keeping up with DED regulations.

Private Share Holding Company

Private Share Holding Company is also known as 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. At least 51% ownership is mandatory for UAE Nationals and 100% ownership available for GCC nationals. Any commercial or industrial type of business can be carried out by a Private Share Holding Company. Professional activities are not permitted under this legal form.

Public Share Holding Company

In a Public Share Holding 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 Share Holding 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.

Partnership Company

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.

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 trade license.

Representative Office

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 trade license.

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 license. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main trade license 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 license. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main license 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 trade license. If a company has several branches, each branch can opt for different activities provided they are enlisted in the main trade license of the company. As GCC countries follow different rules regarding combining activities under business licenses, only activities under the same category in Dubai will be accepted even though it is included in the main trade license 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 in the mainland. The freezone company can open a branch in mainland only if there is a Local shareholder who owns more than 51% in the main company. Otherwise, an approval from Ministry of Economy and a Local Service Agent is required. If GCC nationals own 100% of the freezone company, no LSA is required.

Intelaq (Home based business for UAE Nationals)

An Intelaq License can only be obtained by UAE Nationals. This type of trade license 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 neighbors. It can be a Sole Establishment, LLC, Civil Company and Partnership. Such licenses cannot have employees under them or hire external staff but may deal with contractors. Only one license is permitted for an Intelaq, license holder.

SME License

The trade License for SME is granted to businesses with 100% UAE National ownership and can be of any legal form. The registered trade license is valid for 3 years, and the owner may sponsor employees. No foreign ownership is allowed.

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Cost of LLC company formation In Dubai

The registration cost for establishing a limited liability company (LLC) in Dubai typically ranges from AED 20,000 to AED 30,000. However, it’s important to note that these fees can vary based on factors such as the industry type and specific services required for your business.

In addition to the registration fees, there are other associated costs to consider. For instance, the cost of obtaining an investor visa typically falls within the range of AED 4,000 to AED 5,500. Depending on the category of employee you intend to hire, the fees can range from AED 5,000 to AED 7,000.

To obtain an accurate and up-to-date price quote tailored to your unique requirements, it is advisable to contact Dubai Business Advisors. Our team will provide you with a customized quote that aligns precisely with the activities you plan to undertake. By seeking expert guidance, you can ensure that you receive a comprehensive understanding of the costs involved in establishing your LLC in Dubai.

  • It’s important to note that specific requirements may vary depending on the jurisdiction and specific circumstances. It is advisable to consult with us to ensure you have all the necessary documents and meet the latest requirements for LLC formation in Dubai, UAE.
  • Final Payment Voucher Fees are determined by the type of business activity, third party approvals/ registrations as well as the cost of your annual lease (Market Fee is 5% ). Therefore the price of certain activities can widely vary and result in higher costs.
  • All Government payments as per actuals supported by the original receipt.
  • License fees are annual and payable upon license expiry for trade license renewal.

Procedure for Dubai LLC Company registration/ Professional license

The below is a reference for a Dubai LLC Company registration

Step-by-step process for LLC company formation in Dubai
Choose a business activity

The first step is to choose a business activity that is allowed in Dubai. You can find a list of approved business activities on the Dubai Economic Department website.

Choose a company name

Your company name must be unique and cannot be similar to any other company name in Dubai. You can check the availability of a company name on the Dubai Economic Department website.

Obtain a trade name registration certificate and Initial Approval

Once you have chosen a company name, you need to obtain a trade name registration certificate and Initial approval from the Dubai Economic and Tourism Department.

Obtain a company registration certificate

Once you have the MoA and AOA, you can apply for a company registration certificate from the Dubai Economic Department.

Obtain a business license

Once you have the company registration certificate, you need to obtain a business license from the Dubai Municipality.

Open a bank account

You need to open a bank account in the name of your company.

Obtain a tax registration number

You need to obtain a tax registration number from the Federal Tax Authority.

Hire employees

If you need to hire employees, you need to obtain a work permit for each employee from the Ministry of Human Resources and Emiratisation.

Start your business

Once you have completed all of the above steps, you can start your business.

Here are some additional tips for LLC company formation in Dubai:
  • It is important to choose a reputable company formation agent to help you with the process.
  • Certain business activities require additional approvals from the government authorities and can extend the duration for 1 month. The time is based on your chosen business activity is subject to additional inspections and approvals, the procedure can take longer.

Foreign Branch Setup/ Representative Office in Dubai

To establish a branch or a representative office in Dubai, a foreign company needs to go through a very detailed process which involves a lot of visits and approvals from the government. However, to briefly sum it up, the following steps would give you an overview of what you could expect during the incorporation procedure;
Although this process may seem lengthy and tiring but appointing an expert to handle the incorporation often saves time, money and unnecessary hassle.

Support Service for LLC Company formation in Dubai

Our support services are unique services offered to our clients to ease the entrepreneurial journey. These services are not provided by or affiliated with any particular Government authority or type of company license; however, they are a mandatory requirement for all our clients.

Additional Services

You take the first step to success- We do the rest! Being a pioneer as LLC company formation in Dubai our client’s are our priority. Explore the range of services we offer besides when you start your own business in Dubai.

Call us for assistance: +971 4 341 9701

At DBA, we are trained and experienced in providing timely assistance and facilities to help you get your trade license and business setup in Dubai.