Dubai is a global trading hub, with a strategic location at the crossroads of East and West, making it an ideal location for businesses to establish their trading operations. The Dubai government offers a variety of licenses for businesses of all sizes, including a general trading license. We will discuss the steps to obtain a general trading license in Dubai.
What is a General Trading License?
A general trading license in Dubai allows businesses to import, export, and trade a variety of products. This license is suitable for companies that engage in multiple activities such as trading, manufacturing, and service-based activities.
The general trading license allows businesses to trade in any product that is not banned by the UAE government. These products can range from food items, electronics, textiles, and building materials, to name a few.
Steps to obtain a General Trading License in Dubai
Step 1: Choose a legal entity
The first step to obtaining a general trading license in Dubai is to choose the right legal entity for your business. The type of entity you choose will depend on your business requirements and the activities you plan to undertake.
The most common legal entities in Dubai are:
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Limited Liability Company (LLC)
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Sole proprietorship
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Branch office
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Free zone company
For a general trading license, the most suitable legal entity is a Limited Liability Company (LLC). This is because LLCs are allowed to engage in a wide range of commercial activities, including trading, manufacturing, and service-based activities.
Step 2: Choose a company name and activity
Once you have chosen the legal entity, the next step is to choose a company name and activity. The company name should be unique and should not contain any offensive language. The chosen activity should match the business activities you plan to undertake.
Step 3: Apply for Initial Approval
To obtain a general trading license in Dubai, you need to obtain initial approval from the Department of Economic Development (DED). This approval is obtained by submitting an application along with the necessary documents such as:
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Passport copies of shareholders
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No Objection Certificate (NOC) from the sponsor (for expatriates)
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Proposed company name and activity
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Memorandum of Association (MOA)
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Tenancy contract or Ejari certificate (for office space)
The initial approval process takes around 1-2 working days, and the fee for this process is AED 1,020.
Step 4: Reserve a Trade Name
Once you obtain initial approval, the next step is to reserve a trade name. This step involves reserving a name for your company that is not already registered in the UAE. The cost for reserving a trade name is AED 660.
Step 5: Draft and Notarize the Memorandum of Association (MOA)
The Memorandum of Association (MOA) is a legal document that outlines the company’s activities and structure. This document needs to be drafted and notarized by a notary public in Dubai. The MOA should include:
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Company name
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Activities
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Shareholders
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Share capital
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Registered office address
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Managerial responsibilities
Step 6: Rent Office Space and Obtain an Ejari Certificate
To obtain a general trading license, you need to rent an office space in Dubai. The office space should comply with the requirements set by the Dubai Municipality. Once you rent an office space, you need to obtain an Ejari certificate, which is a tenancy contract registered with the Real Estate Regulatory Authority (RERA).
Step 7: Submit License Application
Once you have obtained the Ejari certificate and MOA, the next step is to submit the license application. This application needs to be submitted to the Department of Economic Development (DED) along with the following documents:
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Application
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Initial approval certificate
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Trade name reservation certificate
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MOA
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Tenancy contract or Ejari certificate
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Passport copies of shareholders
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NOC from the sponsor (for expatriates)
The fee for obtaining a general trading license in Dubai depends on the legal entity you choose and the number of shareholders. The cost can range from AED 10,000 to AED 15,000.
Step 8: Get Approval from DED
After submitting the license application, the DED will review the documents and conduct any necessary inspections. The approval process takes around 5-7 working days, and the DED will issue the trade license once all requirements are met.
Step 9: Register for VAT
Once you obtain a general trading license in Dubai, you need to register for Value Added Tax (VAT) if your business meets the minimum threshold. VAT is a tax on the value added to goods and services, and the current rate is 5% in the UAE. Failure to register for VAT can result in penalties and fines.
Conclusion
Obtaining a general trading license in Dubai can be a complex process, but it is essential for businesses that want to engage in importing, exporting, and trading activities. The process involves choosing the right legal entity, obtaining initial approval, reserving a trade name, drafting and notarizing the MOA, renting office space and obtaining an Ejari certificate, submitting the license application, obtaining approval from the DED, and registering for VAT. By following these steps, businesses can establish their operations in Dubai and take advantage of its strategic location and business-friendly environment.