Dubai is fast emerging as a global destination for investments from around the world. Due to the tax benefits offered by the country and the many opportunities available to expats, along with the welcoming nature of its people, it is an ideal place for investment and growth. However, before starting a business in Dubai, one must be aware of all the licensing requirements and the regulations governing the businesses that they plan to conduct. License requirements in Dubai vary depending on the nature of the business and the place where the business is to be registered.

General Trading

General trading is the buying and selling of goods of a broad variety and includes a range of related activities like import, export, custom clearance, transportation, warehousing and managing logistics. Due to the strategic geographic location of Dubai, accessible to Africa, Europe and wider Asia, general trading is one of the leading sectors in Dubai, bringing in large profits and projected to have a substantial growth in the coming years.

Mainland VS Freezone

Dubai has different regulations governing businesses registered in the mainland and in the freezones. Both jurisdictions offer different advantages and one may choose the jurisdiction that is best suited for the type of business that they intend to carried out. One can choose between mainland and freezones. Mainland companies are governed by the Department of Economic Development (DED) while freezones run under the supervision of various authorities like the Dubai Development Authority, Dubai Airport Free Zone Authority, Jebel Ali Freezone Authority and many more. A comprehensive list of the freezones and their licensing authorities may be found in the UAE Ministry of Economy Website.

Licensing in the Mainland

To carry out general trading in the country, one is required to acquire a General Trading License issued by the Department of Economic Development. However, prior to applying for a license, the following steps are to be taken:

• Legal form of the entity
  Determine the ideal legal form of the entity to be established, depending on the business requirements. Options include partnership, limited partnership, limited liability company, public joint stock company, private joint stock company, etc.
• Trade name reservation and registration
  Determine the trade name of the entity and apply for the same through the DED website. The name must be followed by an abbreviation that denotes the legal form of the entity. For E.g.: LLC for limited liability company or PJSC for Public Joint Stock Company. The trade name chosen will be required to be approved by the DED while the trademark must be approved by the Ministry of Economy.
• Application for initial approval
  Initial approvals must be obtained to ensure that the government does not have objections to the establishment of the business. Furthermore, foreign investors must obtain the approval of the General Directorate of Residency and Foreigners Affairs (GDRFA) before obtaining the initial approval.
• Memorandum of Association for the entity
  Depending on the legal form of the company, a MoA will be required to be drafted, containing details regarding company activities, shareholder information, and structure of the company.
• Address of the company
  The company must have an address in a commercial building that meets all the requirements of the DED. A lease contract registered through an Ejari office will also be required.
• Receipt of License
  Upon completion of the above steps, one may acquire the license after the submission of all the required documents, and the payment of the prescribed fee.

License amendment and renewal procedures

The procedures to amend or renew a license can be carried out online or through service centers available across Dubai. The DED website offers the options to carry out these procedures online. The website lists out the fee and the required time to complete these procedures. It provides options to change the following details:

• Change in Company address
• Shareholder addition and deletion
• Change in Share Capital
• Amendment due to death of shareholders
• Change in Business activity
• Change in Business Segment
• Change in members- general manager, directors, secretary, auditor
• Change in title
• Miscellaneous changes

Licensing in the Freezone

Licensing requirements vary according to the different freezones in Dubai. Freezones are designed to help in easier establishment of businesses and therefore these requirements are simple and straightforward. As freezones have different features, making each of them suitable to different types of businesses, they have designated websites that contain a comprehensive step by step guide to obtain licenses and the related authorizations.

Dubai is rapidly gaining a reputation for its ease of establishing and operating businesses in the country. It has a robust infrastructure, a diverse talent pool and access to large markets. Furthermore, it offers a simplified business registration process that is governed by clear laws and regulations making Dubai an ideal destination for investors and entrepreneurs from around the world.