How to Get a Trading License in UAE?
To establish a trading company in the UAE as a foreign investor, one must acquire a Trading License from any of the business jurisdictions in the region. This blog aims to provide an answer to the question, “How can one obtain a Trading License in the UAE?”
Now is an opportune moment to embark on this venture, as the trade and commerce sector in the region is experiencing positive growth. The UAE’s economy is being bolstered by a series of government-led initiatives.
Acquiring a Trading License in the UAE enables investors to engage in specialized trade within both local and international markets. They can choose to operate a trading company in the UAE mainland or any of the Free Zones throughout the country.
The growth potential for specialized trading in the UAE is immense, particularly in sectors such as building materials and engineering equipment due to the ongoing construction boom in the region. Moreover, a specialized Trading License in the UAE opens doors for investors to conduct business in various sectors, including garments, foodstuff, electronics, and chemical trading, among others. A General Trading License in the UAE is necessary for trading multiple items under a single license.
The demand for a Trading License in the UAE is high among investors, given the plethora of business opportunities available within the Middle East and international markets.
Guide to Obtaining a Trading License in the UAE
To obtain a trading license in UAE, investors must adhere to specific procedures. Following these steps diligently is crucial for expediting the acquisition of the license. Entrepreneurs can seek the guidance of seasoned business consultants like Pro Consultancy to navigate through this process seamlessly.
- To establish a company, follow these steps:
1. Select a company name: Create a shortlist of three names and seek name approval.
2. Determine the business jurisdiction: Choose between Free Zone or Mainland based on your business scope, office space requirements, rent, and visa quota.
3. Choose the appropriate business activity: Select from the available list of business activities.
4. Prepare and submit the application: Fill out the application form and provide the necessary documents specified by the business jurisdiction.
5. Obtain special approvals if needed: Certain business activities like Food-Stuff Trading, Gold & Precious Metal Trading, and Chemical Trading may require additional permissions.
6. Find suitable office space: Select an office space that aligns with your business requirements and prepare the tenancy contract.
7. Make fee payment and submit supporting documents: Pay the required fees and submit supporting documents such as investor photograph, passport copy, special approvals (if any), and tenancy contract for review.
8. Receive the Trading License: The specific business jurisdiction in the UAE will issue a Trading License for a specific period, which can be renewed. (The duration depends on the business jurisdiction, with options for multi-year licenses).
Entrepreneurs in the UAE can obtain a Trading License by following these steps. The process is similar across the two major business jurisdictions: Mainland and Free Zone, with a few minor differences. It is highly recommended to seek the assistance of Business Consultants to ensure a smooth application process and make informed decisions regarding business activity, jurisdiction, and office space. These consultants possess in-depth knowledge of the regulations and specific requirements in each jurisdiction, enabling them to guide investors and expedite the process of obtaining a Trading License in the UAE.
How to form a Trading Company in UAE?
A Trading Company in UAE can be established in either of the two business jurisdictions: The Mainland or Free Zones. While the process of setting up a Trading Company remains largely similar, there are specific steps that entrepreneurs must follow when applying for a Trading License in UAE.
Fortunately, forming a Trading Company in UAE has become easier, as business jurisdictions now process requests with greater efficiency. Moreover, the steps involved in the formation of a Trading Company have been simplified, requiring minimal documentation to expedite the process.
1. Forming a UAE Mainland Trading Company
When it comes to establishing a UAE Mainland Trading Company, the respective Emirate’s Department of Economic Development is responsible for issuing the Trading License. Entrepreneurs have the flexibility to form a Limited Liability Company with 2 or more shareholders and commence their operations smoothly.
Under the latest Commercial Companies Law, there is no longer a requirement for a UAE National Sponsor to open a Mainland Trading Company. Foreign investors can easily obtain the Trading License from the DED for their chosen business activity and promptly start running their business.
2. Forming a UAE Free Zone Trading Company
When it comes to establishing a Free Zone Trading Company in the UAE, the governing and licensing authority lies within the respective Free Zone. Entrepreneurs are provided with a wide array of company packages and business activities to choose from. Depending on the specific trading activity, global investors have the flexibility to select a company package that offers generous visa quotas for staff recruitment, well-equipped office spaces, and other essential facilities. The Free Zones in the UAE present a diverse range of business activities to cater to the needs of trading companies. Seasoned Business Consultants are available to guide investors in selecting the most suitable company package after conducting a thorough analysis of the business requirements. Forming a Free Zone Trading Company comes with numerous advantages for investors.
Key Advantages of Forming a Free Zone Trading Company
- – 100% foreign ownership with full profit repatriation
- – Attractive tax incentives and exemptions
- – Duty-free imports to Free Zones
- – Convenient access to seaports and airports
- – Streamlined in-house customs clearance in designated Free Zones
- – Strategically located for seamless international market connections via air, sea, and land
- – Simplified company setup with minimal documentation requirements
- – Access to top-notch facilities including warehouses, office spaces, and infrastructure.
Establishing a Trading Company in a UAE Free Zone offers significant advantages for global investors. It provides unparalleled flexibility in conducting business operations, including Customs Clearance, Free Zone approvals, and logistics support. By operating within a Free Zone jurisdiction, entrepreneurs can optimize their business practices while enjoying numerous benefits.
Cost of a Trading Company in UAE
The cost of establishing a Trading Company in the UAE can vary based on the chosen business jurisdiction. In the mainland of the UAE, the cost for a Trading Company License is approximately AED 25,000, which includes the license fee, virtual office fee, and initial approvals, among other expenses.
For the mainland, the Trading License fee in the UAE depends on factors such as office space location, rental costs, and visa processing for employees. By selecting a more affordable office space location, the overall cost of a trading company in the UAE mainland can be minimized.
Similarly, the cost of a Trading Company in a UAE Free Zone is determined by factors like location, visa quota, and office facilities. The Trading Company License in the UAE ranges from AED 11,500 for a 1 visa quota to AED 24,000 for a 3 visa quota.
Several factors contribute to the overall cost of establishing a Trading Company in the UAE, including the number of required visas, office space requirements, and visa costs for employees or investors.
PRO Consultancy specializes in guiding global investors by providing advice on the most suitable company package for their specific business needs. The choice between the mainland and Free Zone depends on various factors. For businesses primarily focused on the local UAE market rather than international trading, operating in the UAE mainland is often more advantageous for daily business operations.
Conversely, businesses that require frequent international logistics may find a Free Zone with easy access to airports and seaports to be the ideal choice. Experienced business consultants like Pro Consultancy are well-positioned to guide entrepreneurs in selecting the appropriate business jurisdiction based on their unique circumstances.
To learn more about the steps involved in obtaining a Trading License in the UAE, connect with our expert team right away!