A Complete Guide to Obtaining a General Trade License in Dubai

Dubai has long been a global hub for commerce and trade, attracting entrepreneurs and businesses from all over the world. Among the various types of business licenses available in the emirate, a general trade license stands out for its flexibility and wide scope of activities. This type of license allows businesses to engage in trading a variety of goods across local and international markets.

In this comprehensive guide, we will cover everything you need to know about obtaining a general trade license in Dubai, including the benefits, application process, costs, and regulations.

What is a General Trade License?

A general trade license allows businesses to trade in a variety of products without being limited to a single category. It enables companies to import, export, distribute, and re-export goods within the UAE and internationally.

Activities Permitted Under a General Trade License

With this license, businesses can deal in a wide range of goods, including:

• Electronics
• Furniture
• Clothing
• Machinery
• Food products
• Beauty products
• Medical supplies (with additional approvals)

However, restricted items such as alcohol, pharmaceuticals, and hazardous materials may require special permissions.

Advantages of a General Trade License

1. Wide Scope of Activities: Unlike other licenses that restrict businesses to specific products, a general trade license allows flexibility in dealing with multiple goods under one license.
2. Ease of International Trade: Businesses can import and export goods seamlessly to and from Dubai.
3. Multiple Market Access: Trade locally in the UAE and expand to international markets.
4. Tax Benefits: Enjoy zero personal income tax and competitive corporate tax rates.
5. Simplified Setup: The application process is streamlined, especially with Dubai’s business-friendly policies.
6. 100% Foreign Ownership: In free zones, businesses can have complete foreign ownership without needing a local sponsor.

Mainland vs. Free Zone General Trade License

Mainland License

• Allows businesses to trade directly in the local UAE market.
• Requires a local service agent or partner for certain activities.
• Suitable for companies needing a physical office or warehouse in Dubai.

Free Zone License

• Provides 100% foreign ownership.
• Limits trade within the free zone or international markets unless partnered with a local distributor.
• Offers benefits like tax exemptions, duty-free imports, and no currency restrictions.

Steps to Obtain a General Trade License in Dubai

1. Choose Your Business Location

Decide whether you want to establish your business in the mainland or a free zone. Each option has unique benefits, so consider factors like target market, ownership preferences, and cost.

2. Define Your Business Activities

List the goods you intend to trade. While a general trade license covers a wide range, some products may require special permits or approvals.

3. Choose a Trade Name

Select a business name that adheres to the UAE’s naming conventions. Avoid religious references or names that could be deemed offensive. Check name availability with the relevant authority.

4. Submit Initial Approval

Apply for initial approval from the Department of Economic Development (DED) for mainland businesses or the respective free zone authority.

5. Prepare the Required Documents

Commonly required documents include:

• Passport copies of shareholders and managers.
• Emirates ID (for UAE residents).
• Initial approval receipt.
• Memorandum of Association (MOA) or Articles of Association (AOA).

6. Lease an Office or Warehouse

For a mainland license, you must have a physical address registered with Ejari (the official tenancy registration system). Free zones often provide flexi-desk or virtual office options.

7. Apply for the Trade License

Submit your application to the DED for a mainland license or the respective free zone authority for a free zone license.

8. Obtain Additional Approvals (If Needed)

For certain goods, like medical equipment or food products, additional approvals from specialized government departments may be required.

9. Pay Fees and Collect the License

Once all documents and approvals are in place, pay the licensing fee to receive your general trade license.

Costs of a General Trade License in Dubai

The cost of obtaining a general trade license varies based on the location and business requirements. Below is an estimate:

1. Mainland License
   • Trade license fee: AED 10,000 to AED 20,000.
   • Office space rental: Varies based on location and size.
2. Free Zone License
   • Free zone package: AED 12,000 to AED 50,000 (includes license, office space, and visas).
   • Additional fees for trading outside the free zone.

Note: These costs are indicative and may vary depending on your business activities, visa requirements, and other factors.

Documents Required for a General Trade License

• Passport copies of shareholders and managers.
• UAE residence visa or entry stamp (for foreign investors).
• Emirates ID copy (for residents).
• Proof of business address (Ejari or lease agreement).
• Trade name reservation certificate.
• Initial approval receipt.

Renewing Your General Trade License

A general trade license must be renewed annually. The renewal process involves:

• Submitting your tenancy agreement (valid for at least one year).
• Paying the renewal fee.
• Providing updated documents, if required.

Failure to renew the license on time may result in fines or penalties.

Key Considerations for General Trade License Holders

1. VAT Registration: If your business turnover exceeds AED 375,000 per year, you must register for VAT with the Federal Tax Authority.
2. Customs Code: To import or export goods, obtain a customs code from Dubai Customs.
3. Employee Visas: You can sponsor visas for employees, depending on your license type and office space.

Benefits of Starting a General Trading Business in Dubai

1. Global Trade Opportunities: Leverage Dubai’s position as a global trading hub.
2. Infrastructure Support: Access to world-class logistics and transport facilities.
3. Flexible Market Access: Operate locally and internationally with ease.
4. Government Initiatives: Benefit from policies encouraging foreign investment and innovation.

A general trade license in Dubai is a gateway to limitless opportunities in the world of commerce. Whether you want to trade locally or expand globally, Dubai’s strategic location, investor-friendly policies, and robust infrastructure make it an ideal choice.

By following the outlined steps and understanding the costs and regulations, you can establish your trading business smoothly and efficiently. Take the first step today and unlock the immense potential that Dubai has to offer for general trading enterprises.