Types of Business Licenses in the UAE
A business license is one of the key documents of a company. It contains basic information: name, types of activities, director and General Manager details. Each license is issued by the registration authority for a certain period.
Depending on the type of activity of the company, the types of business licenses differ. In this article, we have analyzed what types of business licenses exist for Mainland and Free Zone companies.
Free Zone
One Free Zone license of a company usually allows up to three (inclusive) groups of activities. If a wider range of activities is required, the license must be expanded for an additional fee. For example, the Meydan Free Zone allows adding more than 10 activities to the license from different groups.
“Each free zone has its own list of activities and types of business licenses. It happens that one free zone does not have certain types of activities that are necessary. Then you need to consider another free zone where they are, or the option of registering a Mainland company. Otherwise, you will not be able to conduct the type of activity you planned” Sergey Kovalkov, Head of International Practice инкорпорацийс
In a free zone, the license is valid for one year, but this period can be extended by agreement with the free zone administration. After the expiration of the term, the license must be renewed. The renewal fee is usually 100% of the cost of the license issued upon registration of the company.
The most common types of business licenses in the free zone are:
Commercial license
Allows you to import, export, sell, distribute and store goods related to the activities specified in the license.
Examples of commercial licenses:
- Electronic commerce.
- Trade in a certain type of goods: cars, computer equipment, clothing, footwear, etc.
Most free zones issue a General Trading license, which allows trading in a wide range of products, not just certain groups. However, UAE banks are wary of companies that have a General Trading license. This is important to keep in mind.
Professional license
Allows you to provide services. For example, management, consulting, business consulting, education, logistics, software development, etc.
Industrial license
Allows the production of chemical and food products, construction materials, etc.
Cryptolicense
Allows you to trade cryptocurrency, as well as create it through mining.
One Mainland company license allows the company to carry out up to ten (inclusive) types of activities related to one group.
“A Mainland company can only operate in one area – for example, equipment trade. If the company plans to engage in third-party activities – for example, a real estate agency, then it is necessary to register a separate legal entity” Alexey Romanov, юрист
“Usually, the types of business licenses and activities in a free zone and on the Mainland differ. But there are free zones whose list of activities completely copies the list of activities on the Mainland. For example, Dubai Silicon Oasis” Ilya Vydrych, Business Development Manager
In the Mainland, the license is valid for one year. After that, the license must be renewed. The renewal fee is usually 100% of the cost of the license issued upon company registration.
Below we have listed the main types of licenses in Mainland Dubai.
Commercial license
Allows:
- Carry out trade. Sale of food and beverages, cosmetics, fertilizers, cars, medicines and chemicals
- Engage in construction. Activities related to the construction of all types of buildings and structures and the provision of subcontracting, infrastructure work, with the exception of design
- Carry out logistics. Cargo and passenger land, air, sea transportation, including freight chartering and activities of airline representatives
Tourism License
Allows you to conduct the hotel business: activities of hotels of all types and categories, guest houses or apartments, with the exception of travel agencies.
Professional license
Allows:
- Provide services to the population. Cleaning, laundries, studios, beauty salons, repair and craft workshops, or car services
- Provide management and consulting. Project management, management, tax and HR consulting, specialized recommendations
- To engage in medicine and health care. Medical centers, private hospitals, clinics, laboratories, pharmaceutical consultations
Industrial license
Allows:
- Produce food products. Factories for the production of baby food, sports nutrition, etc.
- Manufacture building materials. Concrete, crushed stone, etc. factories.
Activities requiring UAE national participation in capital
Incorporation of Mainland companies in strategically important sectors of the economy still requires the inclusion of a local partner (a UAE citizen) in the company's capital.
Below we have listed some of the areas of activity that require a local partner.
Investment and financial activities
Brokers and other financial intermediaries, commodity and currency exchanges, currency exchange offices.
Television and radio broadcasting
Independent video and radio broadcasts via satellite, television or radio channels.
All types of insurance
Companies that specialize in life, health, property, and financial risk insurance.
Engineering and geodetic works
Design work and research of engineering and geological characteristics of the territory for planned construction.
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