When starting a business, people look for a country that offers a world-class infrastructure, business-friendly environment, diverse population, strong legal system, and sound economy. The United Arab Emirates (UAE) is a popular destination for businesses that provide all of these benefits and beyond, which makes it an attractive location for companies of all sizes.
Nowadays, a shift of interest towards entrepreneurship is observed as startups have become a new norm. However, to set up a company in the UAE, it's crucial for business owners to know the protocols that need to be followed for a smooth business experience. Acquiring a business license is the most significant protocol that allows you to establish and operate your company in the country legally. Therefore, let's talk about different types of licenses in the UAE that businesses need to know about:
● Commercial Licenses: A commercial license is required for any business that engages in commercial activities such as trading, manufacturing, or service. This license is issued by the Department of Economic Development (DED) and is valid for one year. This license allows companies to carry out business within and outside the Emirates.
● Industrial Licenses: Industrial licenses are required for businesses that engage in the manufacturing of goods and products or industrial activities. These licenses are issued by the Ministry of Economy and are valid for three years. However, the company has to have a physical office to be eligible for an industrial license.
● Professional Licenses: Professional licenses are provided to individuals who want to practice a profession of interest or based on their training or education, such as consulting engineering, repair services, beauty salons, architecture, etc. These licenses are issued by the Department of Economic Development (DED) and are valid for one year.
● Tourism Licenses: Tourism licenses are required for businesses that engage in tourism-related activities, such as hotels, boat rentals, restaurants, tourist camps, travel agencies, etc. These licenses are issued by the Department of Tourism and Commerce Marketing (DTCM) and are valid for one year.
● E-Trade Licenses: E-trade licenses are required for businesses that operate online platforms, such as e-commerce websites, social media accounts, or mobile apps. However, this license is only issued to a single owner and restricts the holder from opening a shop or issuing visas. These licenses are issued by the DED and are valid for one year.
● Freelance Licenses: It’s one of the most popular business licenses in the UAE. The license is offered to specialists who wish to offer services apart from their full-time jobs. Usually, it is given to experienced professionals from the field of art, technology, media, and entertainment who offer services like animators, copywriters, media professionals, etc. This license is issued by the DED and is valid for one year.
● Agricultural Licenses: An agricultural license is issued to individuals or businesses involved in cultivating or harvesting grains, fruits, or vegetables. You can apply for this business license if your company provides services such as the installation of a greenhouse or irrigation system, the trade of pesticides, running fish farms, or providing agrarian enhancers.
● Craftsmanship Licenses: The craftsman business license is issued to individuals who practice a craft for earning. Plumbers, carpenters, electricians, blacksmiths, etc., can apply for this license. Companies that appoint artisans must apply at the Department of Economic Development (DED) for this license.
Running a business without a trade license in the UAE is illegal and can cause the company to get a hefty fine or even a ban. That being said, ensuring that trade license renewal is done on time is crucial, or it could result in more penalties. Also, getting a license is time-consuming and confusing as you may need additional permits and approvals depending on the nature of their operations. Thus, you can opt for companies that handle all processing related to trade licenses.
Partnering with expert business setup consultants can save time and money as they can keep the processing running smoothly while the company focuses on business growth. Hence, when it comes to finding a company to establish a business, MarkAI Corporate Services is a great place to start.
