SME: Getting started: Business licensing in UAE

Neil Petch of Virtuzone provides a quick rundown of the licensing options available to entrepreneurs in the Emirates.

  

If you’re thinking about setting up a business in Dubai, word of advice: well before plotting business plans and sales projections, try to get a clear understanding of the types of licenses and permits required to form a company. Also look into the wider legal framework governing business registration and licensing in the UAE.

There are emirate-specific as well as federal laws that must be complied with, and a sequence of steps that must be followed, to ensure your business is legally set up and operating legitimately.

Needless to say, it’s a complex process that can be overwhelming for anyone.

To tackle the challenge, start by defining the scope of your business. Think carefully about the type of business and the activity you will practice because this will help you identify the appropriate category to apply for.

You will find that business activities are grouped in core activities such as trade/commercial, industrial, professional or tourism. To get an idea of how these activities are classified you can consult the Dubai Department of Economic Development’s (DED) Activities Search e-service portal.

TYPES OF LICENSES

A brief description of each type of license is readily available:

Commercial license is generally issued for companies whose core activity is trading: selling and buying goods on a retail or wholesale basis; import and export; stocking and distribution of goods. It is among the licenses most commonly issued here.

Professional license is issued for companies whose activities consist of performing specialist services, such as accounting, medicine, law, management or business consultancy. To obtain a professional license, you must supply attested qualifications.

Industrial license is issued for companies that require large manufacturing plants and factories, whose core activities may be food processing, steel and iron casting, workshops, etc.

Tourism license is issued for businesses operating in the travel and tourism sector, including hotel, flight reservation, cruises and inbound/outbound tours, etc.

Some categories of businesses require special approval from certain ministries. For example, all banks and financial institutions are sanctioned by the Central Bank of the UAE.  Equally, pharmaceutical and medical companies require special permissions from the UAE Ministry of Health.

Obtaining a business license may be a daunting task, but company formation specialists are on hand in the country to help entrepreneurs plan a course of action.

Neil Petch is chairman of Virtuzone, a UAE-based business setup and company formation company.

© ZAWYA 2020