Starting a business in Dubai is a smart move for many entrepreneurs, thanks to the city’s strategic location, tax advantages, and world-class infrastructure. However, one of the most important things to understand before launching your business is the cost of obtaining a trade license in Dubai. This guide explains every cost element involved, giving you a clear picture of what to expect.
What is a Trade License in Dubai?
A trade license is a legal document that allows a business to operate in Dubai. Issued by the Department of Economic Development (DED) for mainland businesses or by respective Free Zone authorities, the license defines the legal status of the business and the nature of its activities.
Types of Trade Licenses in Dubai
There are three main types of trade licenses in Dubai:
Commercial License
For businesses involved in buying and selling goods and services.
Professional License
For individuals or companies offering services or consultancy based on professional skills.
Industrial License
For manufacturing, production, or industrial operations in the UAE.
Each license type has its own cost implications depending on the nature of the business and jurisdiction.
Base Cost of a Trade License
The base fee for a trade license in Dubai usually starts around AED 10,000 to AED 15,000. This cost can vary depending on:
- Type of license
- Business activity
- Jurisdiction (Mainland or Free Zone)
- Office space requirements
- Number of shareholders
Keep in mind this is the starting fee, and it often increases once other elements are added.
Government Fees
Government fees are part of the essential charges that apply regardless of your business type. These may include:
Initial Approval Fee
AED 120 to AED 300 for getting initial permission to start the business.
Trade Name Reservation
AED 620 to AED 1,000 depending on the uniqueness and language of the name.
License Issuance Fee
AED 5,000 to AED 7,000 typically paid annually.
Registration Fee
AED 1,000 to AED 3,000 for registering your business in the official registry.
All these amounts may change based on the business activity and zone selected.
Office Space or Ejari Costs
To get a mainland license, you need to rent a physical office and submit an Ejari (tenancy contract).
- Ejari registration costs around AED 200
- Office rent can range from AED 15,000 to over AED 50,000 per year, depending on location and size
Some Free Zones offer Flexi-desk or virtual office options that significantly reduce costs.
Sponsorship and Local Partner Fees
For mainland businesses, foreign investors are required to have a local UAE national as a partner or service agent, especially for commercial or professional licenses.
- Local sponsor fees can range from AED 5,000 to AED 25,000 per year, depending on the agreement and business complexity.
Free Zones do not require a local sponsor, which helps reduce this cost.
Company Formation and Legal Structuring Costs
Legal fees for drafting documents like the Memorandum of Association (MOA), Power of Attorney, and other company formation paperwork may cost:
- AED 2,000 to AED 5,000 depending on the legal advisor or service provider you choose
These documents are mandatory for trade license applications.
Additional Fees and Hidden Costs
There are other charges that can add up and should be budgeted for:
Visa Fees
Each visa costs between AED 3,500 to AED 7,000, including medical tests and Emirates ID.
Customs Registration
Required for import/export businesses, costing around AED 1,000 to AED 2,000.
Chamber of Commerce Membership
Mandatory for most businesses in Dubai:
- AED 1,200 to AED 3,000 depending on the business activity
Insurance (Optional but Recommended)
- Office or health insurance can cost AED 500 to AED 5,000 per year depending on size and coverage.
Total Estimated Cost: Mainland vs. Free Zone
Here’s an approximate summary:
Mainland Business Setup Cost (Annual):
| Item | Approximate Cost |
| License and registration | AED 12,000–20,000 |
| Office rent + Ejari | AED 15,000–50,000 |
| Sponsor/local agent fee | AED 5,000–25,000 |
| Legal structuring | AED 2,000–5,000 |
| Visa and Emirates ID | AED 3,500–7,000 |
| Total | AED 37,500–107,000 |
Free Zone Business Setup Cost (Annual):
| Item | Approximate Cost |
| License and registration | AED 12,000–25,000 |
| Flexi desk (instead of full office) | AED 5,000–10,000 |
| No sponsor/local agent needed | AED 0 |
| Legal structuring | AED 2,000–4,000 |
| Visa and Emirates ID | AED 3,500–6,000 |
| Total | AED 22,500–45,000 |
Note: Free Zone costs vary based on zone popularity, business activity, and visa requirements.
Tips to Reduce Your Trade License Cost
- Choose a Free Zone offering startup packages
- Opt for shared or Flexi desk office spaces
- Limit number of visas initially
- Select business activities that don’t require approvals from external authorities
How to Renew Your Trade License
Trade licenses in Dubai are renewed annually. The renewal process involves:
- Payment of renewal fees
- Submission of tenancy contract (must be valid)
- Trade name and activity confirmation
- Chamber of Commerce renewal
License renewal costs are usually similar to the initial issuance, around AED 10,000 to AED 15,000 depending on the license type and business setup.
Why Accurate Cost Planning Matters
Knowing your expenses in advance helps avoid delays, legal complications, or business interruption. Miscalculating trade license fees may also cause compliance issues or increase your costs later due to fines or forced restructuring.
Planning your trade license budget ensures smoother business formation and gives you flexibility for future growth.
Conclusion
Understanding the cost breakdown of obtaining a trade license in Dubai is essential for a smooth and successful business launch. By carefully planning each step—from license selection to office rental and visa costs—you can set up your business with confidence and clarity. Dubai offers a flexible range of options, especially through Free Zones and customized packages, but it’s essential to understand the full picture before making a commitment.
If you’re considering setting up your business, take time to evaluate all the expenses, understand renewal costs, and seek professional guidance to make informed decisions.
FAQs
Can I get a trade license in Dubai without a physical office?
Yes, in Free Zones you can choose a virtual office or Flexi desk to save on rent.
How long does it take to get a trade license in Dubai?
It usually takes 5 to 10 working days after submitting all documents.
Is VAT registration included in the trade license cost?
No, VAT registration is a separate process with its own fees and requirements.
Do I need to renew my trade license every year?
Yes, all trade licenses in Dubai must be renewed annually.
Is there a difference in cost between a mainland and Free Zone license?
Yes. Mainland setups are generally more expensive due to local sponsor fees and office rental requirements.
