When it comes to the incorporation of a general trading company, obtaining an appropriate general trading license in Dubai is one of the most crucial tasks. Selecting the proper license with careful planning and research is essential to ensure your business operates efficiently and legally. The country offers endless opportunities to set up and manage your business. A general trading license allows you to combine different commercial activities in various industries such as food, furniture, electronics, fashion, etc.
With a general trading license, you can engage in various business activities in Dubai legally. The license boosts your credibility and trustworthiness in the market. Without a legal license, you could face heavy penalties; therefore, you must partner with a business consultant company like Alriyady to simplify the application process of obtaining your trade license.
What is a General Trade License in Dubai?
UAE’s general trading license allows companies to retail and wholesale different goods within and outside the country, except for forbidden goods that need special approval from authorities. Also, we need to understand that a ‘general trading license’ is different from a ‘trading license’. A trading license allows you to trade a single product category of an industry, while a general trading license lets you trade multiple goods in different sectors.
What is General Trading in the UAE?
The term general trading in the UAE means the import/export of different products and services. It involves the trade of a wide range of products such as electronics, furniture, industrial equipment, clothes, and toys. However, there are restrictions on the trade of certain products, such as cars, medical products, weaponry, and other products, which require specific licenses to import and export.
What is the Process of Getting a General Trading License in Dubai?
Obtaining a general trading license involves the following necessary steps,
Select Your Jurisdiction
There are two main jurisdictions in Dubai for business, which are the mainland and the free zones.
Mainland
The Dubai Department of Economic Development and Tourism (DET) regulates mainland companies and requires them to have a UAE national as a sponsor or partner.
Free Zones
- Free zones offer 100% foreign ownership to the owners without needing a local sponsor or a partner.
- Free zones are attractive options for investors and traders as they have low tax rates, a straightforward business setup process, full capital and profit repatriation, and simple business regulations.
- Free zones are also known for their modern infrastructure, top-tier logistics facilities, and modern communication network, which makes them an ideal location for international trade.
There are 30 free zones in Dubai, each catering to specific sectors like media, technology, logistics, and healthcare. Selecting the correct free zone for your business involves considering its location, types of licenses, regulations, costs, and infrastructure.
Select a Company Name
While selecting your company name, you must follow the guidelines of the Dubai authorities and submit your chosen name for initial approval to the DED. After getting name approval, you can apply for your general trading license. Here are some key regulations to keep in mind,
- Ensure the name is not political, religious, or offensive.
- You must not copy the name of any other organization.
- The name must not start with certain words like “international” or “universal”.
- You must register your trademark with the Ministry of Economy.
- If you want to use the name of a country or government, getting approval from the embassy is mandatory.
Obtain an Office Space
As a general trading company that deals in physical goods, you need to lease or rent an office to run your business.
Get Customer Clearance
Obtaining customer clearance is obligatory for businesses involved in the import of goods. Your company needs an import code from the customs authority along with the required fee. You can register with any customs authority within the Emirates.
Submit Your Documents
The application process also requires the company to submit its documents at one of the recognized centres. Gather your Emirates ID, passport copy, and a copy of your residence visa or visit visa for registration of your general trading company in Dubai. After submitting your application, the DED will review and approve your documents and provide you with a payment voucher for the license. You will get your license after paying the specified cost.
What Paperwork is Needed for a General Trading License in Dubai?
You need to submit the following documents if you are planning to open a company with individual shareholders.
- Copy of Emirates ID
- Passport-sized photograph
- Copy of your passport
- Copy of your residence visa
Documents for a Trading Company with Corporate Shareholders
Submit the following documents if you are forming a trading company with corporate shareholders,
- Provide a certificate of incorporation that confirms the formation of your company and its registration with the relevant authorities.
- A certificate that shows the list of directors, shareholders, and other officers of the firm.
- A Memorandum of Association that shows the company’s objectives, rules, and powers.
- Also, provide a resolution for stakeholders that allows the company to start general trading in the country and grant a general trading license.
These documents are proof that your company is legally registered and the authorized signatories who can make decisions on behalf of the company.
The document requirements are different for every jurisdiction where you want to set up your trading company. You may also need to provide additional documents, such as a NoC from your current employer, if you are working in the country with a residence visa, or if you are getting your documents attested by the relevant authorities.
What is the Difference Between a General Trading License and a Trade License in Dubai?
The UAE requires businesses to get a license before starting any commercial activity. Dubai offers two main permits, which are a trade license and a general trading license. Here are the key differences between these two licenses,
| Factor | Trade License | General Trading License |
| Overview | Allow you to trade in specific goods mentioned in the license. | Allows the trade of a wide range of goods (retail and wholesale), except for restricted items |
| Scope | Its scope is limited as it only covers goods listed under the license. | The scope is broad, as it allows trade of almost all goods (except prohibited goods) |
| Flexibility | Low flexibility | High flexibility |
| Regulatory Requirements | It is easier to get for limited business activities. | You need additional approvals if you want to trade in restricted goods. |
| Ideal for | Best choice for businesses targeting a specific product category. | A company dealing in a wide range of goods. |
| Need for Additional Licenses | Requires an additional license if the company wants to trade other types of products. | No need unless your company is dealing in prohibited items. |
What are the Different Types of Trade Licenses in Dubai?
Different types of trade licenses in Dubai are,
Normal License
You need a Memorandum of Association, which you can obtain online or in person, and an office lease contract.
Instant License
The authorities issue this license within 5 minutes for various business activities that do not need additional approvals. You can get an office for the first year and also a Memorandum of Association. An instant license includes membership of the Dubai Chamber for commercial activities, an establishment card from GDRFA, and an establishment card from the Ministry of Human Resources and Emiratisation of the UAE to hire three workers. The authorities provide the final card to the following legal entities in the UAE,
- Sole establishment
- Limited Liability Company (LLC)
- Civil Company
- Limited Liability Company single owner ( LLC-SO)
E-Trader License
An E-trader license is a sole establishment license for home office businesses. You can apply for this visa through the online portal of Invest in Dubai after paying AED 1070 for the license fee, innovation and knowledge fee, and AED 300 for membership of the Dubai Chamber.
General Trading License in Dubai – Mainland Versus Free Zone
There are two options for getting a Dubai general trading license, which are the Dubai free zones and the Dubai Economy Department.
General Trading License in Mainland Dubai
Dubai Economy provides an instant license for one year that doesn’t require an office space. However, the owner must renew the license by getting an office space to conduct business activities.
Key Advantages
The benefits of a mainland general trading license are,
- Entrepreneurs can participate in local market trading in the UAE.
- Ease of setting up your company in the UAE Mainland, with the most popular structure being LLC among the investors.
General Trading License in Free Zone
Free zones are known for their easy business setup process and facilitate international trade with advanced infrastructure, logistics, and technology.
Key Advantages
The benefits of a free zone general trading license are,
- 100% foreign ownership
- 100% repatriation of profits
- Full control of business
- Exemption from customs duty
- Fixed cost for the term of the license.
Final Words
At Alriyady, our expert team can ensure a smooth process of getting a general trading license in Dubai. We have years of experience in the business setup process, golden visa services, corporate tax, and more. Set up your general trading business in Dubai with confidence; let us handle the process while you focus on growing your business.
