How to choose the right trading license in Dubai? - Marque way
 

How to choose the right trading license in Dubai?

February 26, 20210

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How to choose the right trading license for setting up a business in Dubai?

 

Are you looking forward to setting up a business in Dubai ? The flourishing business set up consultancy services have made things much more effortless. Now, Company formation in Dubai and completing its legal works have become trouble-free. But, planning and deciding the business activity and studying the license format takes time.

If you are confused about mainland and freezone company registration in Dubai and related licenses, here’s all the essential guidelines to choose the right business zone as per your need and business model.

Differences between Mainland and Freezone Company Formation

The nature of your business activity is a primary criterion in deciding the type of license you get and jurisdiction under which you should set up your business. It is not always about choosing what interests you; you need to study the business culture of the UAE and understand the benefits and limitations in different zones before setting up a business in dubai.

Let’s read through some important concepts, uses and benefits of setting up a business in Mainland and Freezone to get a better understanding of business culture in the UAE.

Mainland Company Set-up and Licenses

If you want maximum freedom and business flexibility, a mainland company set up may help you to achieve it. A mainland company trade license under the Department of Economic Development (DED) is provided to those enterprises that own a professional and commercial establishment in the UAE.

Till the end of November, one of the main constraints of mainland license was lack of complete ownership. But now things have become quite favourable; the new declaration by the UAE government, announcing 100% ownership to 122 selected economic business sectors (agriculture, health, infrastructure, education, manufacturing etc.) have made the UAE business market flexible.

If you own a company License in the UAE mainland:

  • You are eligible to trade anywhere internationally
  • You can bid on the government projects
  • You can choose any business activities
  • You can get easy access to a corporate bank account

Now, let’s take a look at some of the business licenses available in the UAE mainland:

Professional License

If you are planning to start a service-oriented company formation in Dubai mainland, then you are eligible to get a professional license. Some of the service activities include engineering and electronics consultancy, travel and tourism, marketing, safety consultancy, health and fitness, real-estate, fashion industry, etc.

Entrepreneurs consider obtaining a professional license as the cheapest procedure to step into the Dubai business world. The easy accessibility, scope for amendment and cancellation services make it a comfortable choice for new investors.

Commercial License

Commercial trade license in Dubai is granted to the investors engaged in goods, trade and related services. A commercial license also includes some of the professional categories. Most people consider getting a commercial license more beneficial as it allows the investor to engage in multiple business activities under a single license.

Industrial/Manufacturing License

An industrial license is necessary if you are planning to set up a manufacturing unit. For all other activities in the UAE mainland, the Department of Economic Development (DED) provides the licenses. But in the case of an industrial license, you need to get the required sanctions from the DED, the Chamber of Commerce & Industry and the Dubai Municipality.

The basic requirements to get an industrial license are:

  • Physical presence in the UAE mainland
  • A well-maintained warehouse
  • The Local industrial license
  • A minimum financial capital of AED 250,000

How to Set up a Mainland Company in the UAE

Setting up a business in Dubai mainland has become hassle-free. Here are the step-by-step procedures involved in the mainland company set up process:

  • Choose a local sponsor
  • Choose a business domain
  • Select a trading name as per the trade name guidelines
  • Draft the MOA(Memorandum of Association)/LSA document
  • Set up an Office space/ get a virtual address
  • Submit the documents to the DED
  • Pay and get the license
  • Open a Corporate bank account
  • Apply for an establishment card and a labour card
  • Process your visa requirements

Freezone Company formation and Licenses

Free Zones or free trade zones are the business areas in the UAE where you could set-up trade and services at preferential tax rates. Currently, there are 37 free trade zones in the UAE. The lack of complete ownership of the business activity was something that distinguished mainland companies from the free zones. With the new UAE cabinet release, foreign expatriates are now eligible for 100% ownership in the mainland also.

Also, Freezone lacks high-end exposure to conduct trade. Trade activities are limited to the jurisdiction of the Freezone where you are planning company formation in Dubai. But the tax benefits and low maintenance cost are attracting foreign investors to setting up a business in the Freezone.

Let’s see some of the licenses available in the Freezone area:

General Trading License

The general trading license gives ample scope to trade exports and imports with an exemption on some banned products that require separate permission or approval. Professional License and Industrial License The professional and industrial license offers the same trade activities that the mainland professional and industrial licenses offer. But the only difference is that you don’t need to set up physical infrastructure in the UAE to conduct trade activities. Smart/Flexi offices save you from high maintenance costs.

How to Set up a Freezone Company

For freezone company registration in Dubai, you need to follow the same procedures as mentioned in the mainland company formation. The only difference is that you don’t need to get approval from various government sectors and you don’t need the assistance of a local sponsor to start a trade. Freezone has its own rules and the local bodies to monitor the company, set up procedures and issue associated licenses.

Mainland and Freezone Company Formation: Crucial Differences

Understanding the crucial differences between mainland and Freezone lets you decide what type of license you need to setting up a  business of your choice.

Unlike mainland company licenses, in free zones, you can set up companies with or without physical infrastructure. But, visas are limited if you don’t own physical infrastructure. And free zones exhibit liberal government policies, guaranteed ownership and expatriate hiring procedures, compared to mainland companies.

Bottomline

Thorough knowledge of the mainland and Freezone licenses are necessary before you setting up a business in Dubai. Licenses are granted as per the nature of your business activity.

Guidance and assistance of a business setup consultants can help you in the entire process to setting up a business. Marqueway business setup consultants in dubai is one of the leading consultancies where you can rely upon to get the best and promising services to launch your business.

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Copyright by Marqueway