Over 450,000 businesses operate in Dubai today, most of which require a commercial license. But what exactly is a commercial license, and do you need one for your business?
A commercial license is mandatory if you plan to run a business that sells products or provides trading services in Dubai or the UAE. This license covers a wide range of activities, from opening a retail store to importing and exporting goods.
It’s one of the most popular business licenses in Dubai because it lets you trade legally, open a business bank account, rent office space, and hire employees. In short, a commercial license in Dubai helps your business run smoothly and gain trust in the market.
Here we’ll explain what a commercial license is, who needs one, and how you can get it step by step, without all the confusing jargon.
Understanding Commercial Licenses in Dubai & the UAE
A commercial license in Dubai is a legal permit that allows businesses to engage in trading activities such as buying, selling, importing, and exporting goods. Entrepreneurs with this license can deal in a variety of goods such as electronics, food, furniture, toys, and jewellery.
A commercial license is issued by the Department of Economic Development (DED) or relevant free zone authorities; this license is essential for companies involved in commerce within Dubai and the broader UAE market. The license also includes services like general contracting and real estate services. It is essential for any business involved in buying, selling, or trading commodities in the Emirates.
The flexibility and breadth of activities permitted make it one of the most sought-after business licenses in Dubai, enabling both local and international trade.
Why Every Trader in Dubai Needs a Commercial License
Here are the key benefits of having a Dubai Commercial License:
1. Legal Permission to Trade: A commercial license allows your business to legally conduct trading activities like buying, selling, importing, and exporting goods within Dubai and internationally.
2. Supports Diverse Business Activities: It covers a broad list of activities, including general trading, retail, logistics, construction material trading, and more, offering flexibility to expand your operations.
3. Access to Local and Internationally: With a Dubai commercial license, your business can operate within the UAE and also build trade relationships across global markets.
4. Choose Your Ideal Business Structure: Depending on your business goals and target market, you can operate as a mainland company, free zone entity, or even offshore.
5. Tax Advantages: Dubai offers 0% personal and corporate income tax in most cases, making it a tax-efficient environment for trading businesses.
6. Strong Brand Credibility: A registered and licensed business in Dubai enhances your brand image and builds trust with customers, suppliers, and partners.
Business Activities Covered by a UAE Commercial License
A commercial license in the UAE enables businesses to carry out various trading and commercial activities, whether it’s physical goods, wholesale, or online trading. Here are some of the key activities permitted:
| General Trading | Furniture Trading |
| Import and Export | Cosmetics and Perfume Trading |
| Retail and Wholesale | Jewellery and Precious Metals Trading |
| E-commerce | Stationery and Office Supplies Trading |
| Real Estate Broking | Agricultural Products Trading |
| Logistics and Freight Services | Home Appliances Trading |
| Automotive Trading | Textile and Fabric Trading |
| Building Materials Trading | Toys and Baby Products Trading |
| Electronics and Mobile Phone Trading | Pet Supplies Trading |
| Fashion and Apparel Trading | Packaging Materials Trading |
| Foodstuff Trading | Cleaning Equipment and Supplies Trading |
| Oil and Gas Equipment Trading | Sports Goods Trading |
| Medical Equipment Trading | Safety and Security Equipment Trading |
And many more… Consult our business setup expert to know if your business activity is included in the commercial license.
Documents Required to Obtain a Commercial License in Dubai
To apply for a commercial license in Dubai, you will need to prepare and submit the following documents:
- Passport copies of all shareholders and partners
- Visa copies or UAE entry stamp (for foreign applicants)
- Emirates ID copy (if applicable)
- Trade name reservation certificate
- Initial approval certificate from the Department of Economic Development (DED)
- Memorandum of Association (MoA) or Local Service Agent agreement (notarised)
- Tenancy contract or Ejari for the business premises
- NOC (No Objection Certificate) from the current sponsor (if applicable)
- Duly filled application form for the commercial license
- External approvals (if the business activity requires permissions from specific authorities)
The DED will issue the commercial trade license once the documents are verified.
How to Get a Commercial License in Dubai, UAE?
To legally trade goods and services in Dubai, businesses must go through a formal licensing process. Here’s how to get your commercial license in Dubai with ease:
1. Identify Your Business Activity
Determine the specific trading activities your business will undertake. Dubai’s Department of Economic Development (DED) provides a comprehensive list of permissible activities. Selecting the appropriate activity is crucial, as it influences the type of license required and the legal structure of your company.
2. Choose Your Legal Structure
Select a legal form that aligns with your business model. Common structures in Dubai include:
- Sole Proprietorship: Owned by a single individual with full control and unlimited liability.
- Limited Liability Company (LLC): Allows up to 100% foreign ownership in many sectors, with liability limited to the company’s capital.
- Branch Office: An extension of a parent company, operating under the same name and activities.
3. Select the Jurisdiction
Decide where to establish your business:
- Mainland Dubai: A commercial license issued by the Department of Economic Development (DED) allows you to do business anywhere in the UAE and internationally. This option is ideal for businesses targeting local clients or those planning to open physical stores.
- Free Zones: Commercial licenses issued by free zone authorities allow trading within the free zone and internationally (but not directly in the UAE mainland without a distributor or local agent). Suitable for 100% foreign-owned businesses with global reach.
- Offshore Companies: While offshore entities can obtain a commercial license, they cannot trade directly within the UAE. Offshore licenses are mainly used for international trade, asset management, or holding companies.
4. Choose a Trade Name
Choose a unique name that reflects your business activity and complies with DED guidelines. The name should not include inappropriate or prohibited words and must not be similar to existing company names.
5. Apply for Initial Approval
Get initial approval from the DED (for mainland) or Free Zone authority. It allows you to move forward with the setup process.
6. Prepare the Memorandum of Association (MoA)
Draft and notarise the MoA, outlining the company’s structure, objectives, and operational guidelines. This document is essential for LLCs and other legal forms.
7. Select a Business Location
Lease a physical office or a Flexi-desk (shared workspace) depending on the jurisdiction. Free zones often offer smart desk or virtual options. The tenancy contract must be registered via Ejari for mainland businesses.
8. Apply for the Commercial License
The key step is submitting your complete application package. Mainland businesses should apply through the Department of Economic Development (DED), while free zone companies must apply through their respective free zone authority. Kindly ensure you include all required documents and pay the applicable fees. Your issued license will clearly state your approved business activities.
9. Receive Your License and Start Operations
Once approved, you’ll receive your Commercial Trade License. You can now officially start your business operations in Dubai.
Let Shuraa Business Setup simplify your licensing process—from selecting the right business activity to handling all documentation and approvals. Get started today!
What is the Commercial License Cost in Dubai?
For businesses setting up in mainland Dubai, the average cost of obtaining a commercial license range between AED 14,900 and AED 24,500. This estimate includes various fees such as trade name reservation, initial approval, license issuance, and other administrative charges.
In contrast, establishing a business in one of Dubai’s free zones can be more cost-effective. The starting cost for a commercial license in free zones is around AED 12,500, though this can vary based on the chosen free zone and the package selected.
Please note that costs may vary based on your business activities and additional approvals. For a precise estimate tailored to your needs, consult our business setup experts today!
Key Differences Between Dubai Commercial License and Other Licenses
Businesses in Dubai are required to obtain specific licenses based on the nature of their activities. The primary types of licenses are Commercial, Professional, and Industrial. Each license caters to different business models and has distinct requirements.
| Criteria | Commercial License | Industrial License | Professional License |
|---|---|---|---|
| Purpose | For trading goods and services (buying and selling). | For manufacturing, production, and industrial activities. | For providing professional services (consulting, medical, education, etc.). |
| Business Activity | Retail, wholesale trading, import/export, general trading. | Manufacturing, production, assembly, and processing of goods. | Consulting, education, healthcare, legal, IT services. |
| Ownership | 100% foreign ownership allowed for many activities as per new rules. | 100% foreign ownership allowed in Free Zones; local sponsor may require in Mainland. | 100% foreign ownership allowed |
| Office Requirement | Physical office or warehouse (Ejari for Mainland). | Physical manufacturing facility required. | Physical office or consultation space required. |
| Regulating Authority | Department of Economic Development (DED) for Mainland, or Free Zone Authority for Free Zones. | Department of Economic Development (DED) for Mainland, or Free Zone Authority for Free Zones. | Department of Economic Development (DED) for Mainland, or Free Zone Authority for Free Zones. |
| Main Activities | Buying and selling of goods, retail operations, wholesale activities, etc. | Production, manufacturing, assembly, packaging, etc. | Providing professional services such as consultancy, healthcare, IT solutions, etc. |
| Documents Required | Trade name reservation, initial approval, tenancy contract, passport copies, etc. | Trade name reservation, initial approval, manufacturing agreements, tenancy contract, etc. | Trade name reservation, initial approval, qualification certificates, tenancy contract, etc. |
How to Renew Your Dubai Commercial License
A Dubai commercial license is typically valid for one or two years from the date of issuance. To continue business operations legally, it’s important to renew the license before it expires. Timely renewal also helps avoid penalties, legal issues, and business interruptions.
The renewal process is straightforward and can often be completed online through the Dubai Department of Economic Development (DED) or relevant Free Zone authority.
Basic steps include:
- Ensure your tenancy contract is valid, attested, and not expired.
- Prepare required documents (trade license, tenancy contract, passport copies of shareholders, etc.).
- Apply for renewal through the DED or Free Zone portal.
- Pay the renewal fee based on the business activity.
- Receive a renewed trade license (usually within a few working days).
Start Smart with the Right Commercial License in Dubai
Starting a business in Dubai begins with one key decision – getting the right license. A commercial license in Dubai opens the door to countless opportunities in trade and business, both locally and globally. However, sometimes the process seems overwhelming, especially for new entrepreneurs entering the UAE market.
That’s why Shuraa Business Setup is here, to assist and guide you every step of the way. With decades of experience and a team that knows the system inside out, we handle everything from paperwork and approvals to finding your office space and managing PRO services.
We don’t just help you get licensed; we help you launch with confidence.
Frequently Asked Questions (FAQs)
1. How to Get a Commercial License in Dubai?
To get a commercial license in Dubai, follow these steps:
1. Choose your business activity.
2. Select a company name and get it approved.
3. Apply for initial approval.
4. Prepare the MOA and secure a tenancy contract.
5. Submit required documents to DED or Free Zone authority.
6. Pay the license issuance fees.
7. Receive your commercial license.
2. Why is the commercial license popular in Dubai?
The commercial license is highly sought after due to Dubai’s strategic location, offering access to major markets in Africa, Asia, Europe, and the Middle East. This license facilitates trading, importing, and exporting goods, making it an attractive option for businesses aiming to establish themselves in the region.
3. Can I Get a Commercial License in Dubai Without Office Space?
No, you cannot obtain a commercial license in Dubai mainland without a physical office, as an Ejari (tenancy contract) is mandatory for DED licensing. However, many Free Zones offer more flexible solutions like Flexi-desks or virtual offices that meet this requirement at a reduced cost.
4. How Much Does It Cost to Get a Commercial License in Dubai?
The commercial license cost in Dubai varies depending on location (mainland or free zone), number of activities, office space, and additional services. On average, prices range from AED 12,000 to AED 30,000 or more.
5. Can I operate multiple business activities under one commercial license?
Yes, a commercial license can cover multiple related business activities. However, all activities must fall under the same license category and be approved by the relevant authority.
6. What are the penalties for operating without a commercial license in Dubai?
Operating without a valid commercial license in Dubai can lead to significant penalties, including fines ranging from AED 5,000 to AED 50,000. Authorities may also suspend or cancel licenses for repeated violations or non-payment of fines.
7. Do I Need a Commercial License for E-commerce in Dubai?
Yes, businesses engaging in e-commerce activities, such as online retail, digital product sales, or offering services online, need a commercial license. E-commerce businesses are subject to the same licensing and regulatory requirements as other commercial enterprises in Dubai.
*Note: The information in this post is for general guidance only and may change due to updates in government policies or regulations.
