Ultimate Guide to Trade Licenses for Businesses in Dubai

Creating a business from scratch is no easy feat, and while most processes are daunting, there is an air of excitement in finally landing your “dream job”. With Dubai quickly becoming the hottest business hub for global business expansion, entrepreneurs are flocking due to the economic freedom it offers. Capital incentives, fast moving infrastructure and tons of support all contribute to the economy, providing a good environment to turn opportunities into reality.

Business setup often starts with excitement due to all its possibilities. This quickly becomes confusing the deeper you dive into the system. New founders face unfamiliar terms, multiple authorities telling you what to do, and unclear cost structures. Capable founders still find stress with starting, mostly due to not knowing what decisions matter most early on. One wrong choice can lead to higher costs, restricted operations, or burden of restructuring later.

In this guide, we offer some clarity on trade licenses and why it matters in Dubai. We help you compare business license types to find what works for your setup. Hopefully, with an insight into realistic costs and timelines, you can make decisions confidently without much overwhelm.

This guide is based on Skrooge’s extensive experience assisting founders, SMEs, and international businesses with navigating Dubai’s trade license requirements. By combining advanced automation with deep local regulatory knowledge, Skrooge ensures certainty and transparency throughout the decision-making process for newcomers to the UAE business landscape.

A business license is more than paperwork

A trade license is considered as the legal backbone of the business. It determines the business activities you’re legally allowed to do and ensures that your operations are legally protected under the law. The Dubai Department of Economy and Tourism (DET) (formerly known as the Department of Economic Development) is the primary authority responsible for regulating and issuing trading licenses for mainland businesses in Dubai; while respective Free Zone Authorities take care of license approvals in respective free zone areas.

Most entrepreneurs make a mistake due to:

• unclear differences between mainland vs free zone licenses
• confusion around different business license types
• unexpected or hidden costs when onboarding professionals
• uncertainty on rules, like whether a physical space or local sponsor is required

Clarity upfront saves time and money. A correct license choice avoids amendments, fines and reapplications. Understanding the process can prevent delays in other important transactions such as banking, visa applications, and daily operations. A clear setup will allow long-term scalability instead of relying on short term shortcuts.

Types of Trade Licenses

What are the types of licenses available?

Generally, you have 3 main types of licenses available – trade license, which might be interchangeable in local vernacular with commercial license (take note that these two are not necessarily one and the same); professional license for service based businesses; and industrial license for manufacturing and production work.

To boost Dubai’s economy, there are also several common special programs and permits that vary by authority:

• Tourism License For travel agencies, tour operators and hospitality
• Agricultural License For farming, livestock and fisheries, including environmental and land-use specific conditions that fall under agriculture
• Craftsmanship / Occupational License A type of professional license for skilled manual services (plumbers, electricians, artisans)
• Freelance licenses A special type of permit for individual service providers; and lastly

In this table, you will find a summary of all the different types of trade licenses that you can apply for:

Type of Trade License	Who needs to apply?	Typical Costs	Typical Activities Applicable	Limitations
Commercial	Businesses that buy/sell physical goods, retailers, wholesalers, local distributors who trade within mainland	For Mainland Dubai: about AED 10,000 and AED 25,000 for a commercial license   For Free Zones: starts at about AED 5,500. Actual pricing varies depending on the area, the amount of visas you need and other factors based on the package you select.	Import, export, retail, wholesale, delivery and supply of specific product categories (food, electronics, apparel etc.). The official list is defined by relevant authority	Requires correct activity code; may require physical lease and local sponsor depending on structure; regulated items need extra approvals. Costs vary with visas & workspace setup
General Trading Activities	Businesses that want to trade multiple unrelated product categories under one license (import/export/wholesale across several product lines). Popular for trading companies that want flexibility.	Mainland / Free zone examples: ranges cited vary widely: AED 12,000–50,000+ depending on number of activities, warehouse/setup needs and zone packages	Broad import/export, wholesale & retail across multiple product categories (electronics, garments, home goods, packaged food — regulated goods need approvals). Often allows multiple activity lines in one license.	Not a universal catch-all — restricted products (alcohol, pharmaceuticals, weapons, controlled chemicals, food) require additional approvals/permits. Costs increase with customs, warehousing and visas.
eTrader	Individuals (UAE nationals / in some programs GCC nationals) and small sellers who sell goods online through social media/marketplaces; small retailers testing market.	Apply for this via the portal on Invest in Dubai with a fee of AED 1,070 (license + knowledge and innovation fees) + AED 300 (Dubai Chamber membership payment).	Selling online via social media, marketplaces, home-based sales, small scale import/resale. For corporate ecommerce licenses (not e-trader) can include warehousing, online storefronts, cross-border trade.	E-Trader: restrictions — usually for UAE /GCC nationals only, limited visa quotas, limited to low-risk activities and small turnover; corporate ecommerce licenses require full documentation and may require physical lease

To increase ease of doing business, the Dubai Department of Economy and Tourism has released the following processes. Think of it as similar to passport issuance, with both a standard process and fast tracked timeline. Each carry its own needs and limitations.

Feature	Normal License	Instant License
Quick Description	Full compliance route and ideal for investors, regulated sectors and long-term business plans	Startup friendly, friction reduced entry point to the local market
License type	Any (commercial, professional, etc.)	Mainly commercial / professional applies
Activities	Flexible; you get to select the business activities	Limited to operations that do not need external government approvals (general trading & uncomplicated commercial / service); Hence, limited scope and eligibility
Speed	A few days to a few weeks	Issued as fast as within minutes via online website
Documents	Full set including the Memorandum of Association (MOA), Ejari/office lease and government approvals depending on activity	Minimal. No MOA or rental contract needed to begin
Office required	Yes, with exceptions	No physical space required initially; virtual allowed for first 12 months
Renewal	Normal renewal	Must renew and convert to normal license
Flexibility	High	Limited
Best for	Businesses that need: – a physical office – regulated businesses – multiple owners – complex setups	Permits for: – first time founders – solo entrepreneurs – testing a business idea quickly – getting legal form fast to open a bank account and invoice

If you are still confused about a) what business set up works for you and b) how much it would cost, you can check out this site by Invest in Dubai.

In this page, you can input the details that would apply to you (i.e. business details, solo vs partners, nationality, etc) so they can make recommendations on what would work for you.

Mainland vs Free Zone Areas

By now you would have seen a lot on the terms “Mainland” or “Free Zone” areas. This is a classification for where to set up your company, and while both would result in legally selling within the UAE, there are significant advantages and disadvantages to each type. They can differ hugely in terms of market access, foreign ownership, setup requirements and strategic flexibility.

To clarify the differences on each type of license and their requirements, we have compiled the summary of each one here:

Type of License	Mainland License	Free Zone License
Key Differences	Full access to the UAE market, including local customers and government contracts Ability to trade freely	Issued by designated free zones and is designed to attract international and foreign-owned businesses
Authority	Issued by Department of Economy and Tourism	Issued by relevant Free Zone Authority
Setup flexibility	Often physical or commercial lease required	Flexible requirements, like flexi-desks or virtual workspace
Pros	Full access to the UAE market, including local customers and government contracts	Tax advantages Lower cost of application and simplified setup packages
Cons	Higher setup and operational costs due to physical requirements and broader compliance obligations	Could access mainland via DET branch license / permit (Dubai) however subject to approvals and activity list, plus separate records requirement
Foreign Ownership allowed	Most mainland now allow 100% foreign ownership, as long as they are not on the restricted list that still requires Emirati ownership or special approvals	A restricted business activity may be 100% foreign owned if: ✅ The free zone explicitly lists the business sector as permitted ✅ The activity is confined to the free zone or international markets ✅ All federal approvals (if required) are obtained ✅ The activity does not involve direct mainland public access Common examples: – Media & broadcasting (in media free zones) – Education & training (in knowledge/education zones) – Technology & R&D – Financial services (in regulated financial free zones) – Healthcare research or back-office medical In these cases, ownership is allowed, but market access is limited.
Market Access	Mainland market access allowed	Ability to sell internationally or within free zone. Local trade requires special permits or dual license.
Local Trading Activities	Suitable for inventory that need on-the-ground presence for walk-in customers	Restricted scope of operations allowed
Tax / Fees	Corporate Tax Mainland companies are subject to the Corporate Tax regime. Profits above AED 375,000 are generally taxed at 9%. VAT Standard 5% VAT applies on most taxable supplies. Zero-rated supplies are taxable at 0% and allow VAT recovery, while exempt supplies fall outside the VAT system and do not allow VAT recovery. Both can apply in the UAE mainland, depending on the nature of the supply — not whether the business is in a free zone or mainland Import / Export Customs duty generally applies Setup & Fees Generally more expensive due to licensing and workspace requirements.	Corporate Tax Free zone companies can enjoy 0% corporate tax on qualifying income if they meet qualifying conditions (e.g., income specified by FTA and other criteria). Non-qualifying income and certain transactions (e.g., sales to mainland customers) may be taxed. VAT Standard 5% VAT applies on most taxable supplies. Zero-rated supplies are taxable at 0% and allow VAT recovery, while exempt supplies fall outside the VAT system and do not allow VAT recovery. Both can apply in the UAE mainland, depending on the nature of the supply — not whether the business is in a free zone or mainland Import / Export Import/export duty exemptions usually available within zone operations Setup & Fees Lower licensing entry costs, flexible work site options.
Sponsor Requirements	Depending on the business activity and legal structure, may include local sponsor or local service agent arrangements	No local sponsors needed

What is a dual license?

When a business maintains both a free zone and mainland access, this setup is commonly referred to as a dual license. However, a dual license is not always two separate licenses. It can be one free zone company with approved mainland distribution rights.

1. Classic Dual setup: Free Zone Company + Mainland Offshoot

• Initially registered as a free zone company; and then you register again for the mainland satellite extension of the same company
• Pros: You can now invoice mainland clients directly, giving you full mainland access to cover the whole market
• Cons: Two separate registration would mean more expenses and compliance requirements

2. Free Zone Dual License (No Separate Company)

• Offered by specific free zones only
• Operating permit allows a free zone company to conduct business in the mainland
• Pros: No need for a separately registered mainland company
• Cons: Limited to specific offerings like in consulting, tech; scope restrictions apply

Getting a Trade License: Initial Approvals, Setting up your Trade Name, and other Expert How-to’s

Both online and service-center routes follow the same regulatory system. The difference is whether you submit documents digitally or with public assistance.

• You can apply for a trade license through:
  • Online application via Invest in Dubai
  • Authorized service centers across Dubai

Application Timeline:

The service will be completed within 20-60 minutes for a normal license and 5-10 minutes for an instant or eTrader License. After submission through the portal, approval for a normal license will take up to 20 business days.

Step-by-step Registration Process

Step 1. Choose business activity & legal form

1. Select the business activities. You can use this site as basis or guide for your setup.You can choose from more than 2,000 various activity codes from the official list by the DET.
2. Choose your legal form. Most common legal form for mainland businesses is the Limited Liability Company (or LLC) can have:
   • Single owner or multiple co-owners
   • 100% foreign ownership (for most activities)
3. Following legal forms are also available:
   • Sole Proprietorship / Sole Establishment Business owned and managed by one person. Often used for professional or small operations.
   • Civil Company For licensed professionals (doctors, lawyers, engineers, accountants). Stakeholders hold personal liability unless structured otherwise.
   • Partnership / General Partnership / Limited Partnership Structures with two or more owners sharing profits and liabilities.
   • Public Joint Stock Company (PJSC) Larger structure that may offer shares to the public, suitable for major capital-intensive ventures.
   • Private Joint Stock Company Similar to a PJSC but not publicly traded; often used for larger private enterprises.
   • Branch of a Foreign Company / Representative A direct extension of an existing parent company abroad; may require a local service agent
   • Free Zone Establishment (FZE) A single-shareholder limited liability company in a free zone
   • Free Zone Company (FZCO / FZ-LLC) A multiple-shareholder limited liability company (usually up to defined limits set by the free zone)
   • Branch of a Free Zone Company An extension of a free zone firm, regulated by the same FZ authority.

Your legal form determines:

• Ownership structure (single owner vs partners)
• Liability (personal vs limited)
• Visa eligibility
• Banking requirements
• How easily ownership and shares can be transferred in the future
• How regulators treat your company

Step 2: Reserve your trade name and set up approvals

1. Submit your chosen trade name via this website
2. Once approved, proceed to initial government for clearance. Your trade name is going to be your legal name and must be reflective of your operational scope. It must adhere to the following legal naming conventions
   • Your name must not have any divine meaning
   • Your name must not be offensive or contain any indecent terms
   • Your name must be reflective of the approved business activity
   • Your name must be unique and not misleading
3. Reserving your trade name is a key step before moving forward. Make sure to check the guide in the site before you proceed.

Step 3: Apply for initial approvals from authorities

1. This means that the government does not object to establishing your entity within the State and that you can proceed with next steps to obtain the license. However, this does not mean you are approved to transact or practice immediately.
2. Certain businesses may require, prior to this step, a different approval from other governing bodies relating to the industry, such as:
   • Activities relating to legal affairs.
   • Activities relating to security entities and the Securities and Commodities Authority.

Step 4: Submit documents (passport, MOA, lease agreement if needed)

1. A memorandum of association shall be made if the organization takes any of the following legal forms:
   • Partnership, limited partnership, limited liability company, private joint stock company, public joint stock company.
2. For the lease agreement: organizations are required to have an actual address to start in the UAE. The location must meet the requirements set by the Department of Economic Development in each Emirate, with adherence to zoning regulations by the municipality or corresponding authority.
   • A lease contract is required to establish presence of the office or the warehouse. Certain Emirates require a certified document. In Dubai, the lease contract must be properly Ejari-certified.

Step 5: Obtaining the additional government approvals

Some activities require approvals from competent federal/local regulators (e.g., health, financial services, telecom, transport, education), depending on the activity code.

Step 6: Pay fees

1. You can pay via direct debit at Dubai Islamic Bank, Commercial Bank of Dubai, or Emirates Islamic.
2. To make your payment with cash or cheque, please visit Aafaq Islamic Finance, Commercial Bank of Dubai, or Emirates Islamic.
3. Fees must be paid within 30 days from issuing of payment receipt. Failure to pay may cancel your entire application.

Step 7: Receipt of license

1. Upon submission of requirements, approval timelines vary by type and business activity. Instant and eTrader permits can be issued within minutes for eligible activities, while standard applications typically take between 3 and 10 working days.
2. Applications requiring external government approval or regulated activities may take up to 15–20 working days or longer to complete.
3. License is issued digitally once approved. Once provided, you can immediately:
   • Start executing and taking in clients
   • Apply for visas (where eligible)
   • Open a bank account (subject to bank checks)

Step 8: Registration with the Chamber of Commerce

In some cases, owners must enlist with the Chamber of Commerce of the Emirate where they are licensed before they can move forward.

Here are the locations that may be applicable to you:

• Abu Dhabi Chamber
• Dubai Chamber
• Sharjah Chamber of Commerce and Industry
• Ajman Chamber
• Um Al Quwain Chamber
• Ras Al Khaimah Chamber
• Fujairah Chamber of Commerce and Industry

Required Documents

The following are the core requirements needed to get the permits for all legal forms:

• Initial approval and all the submitted documents receipt
• Copy of the lease contract registration certificate.
• Duly certified memorandum of association
• Approvals by the other government authorities of the activity, if required.
• Proof of payment and payment receipt

However, certain concessions are allowed for a normal license:

• Approved Memorandum of Association
• Office or lease agreement (if applicable)
• External government approvals (if required by activity)

For an instant license, you will need your:

• Unified Number or Emirates ID
• Typically no MOA or physical office required upfront

For an eTrader License you will need an ID number.

If you use an approved service center, you can submit all requirements via email, and the center will process the application on your behalf.

Breakdown of Total Costs

The fees for the service vary depending on the type of license and specific operational scope. For detailed and more accurate fee information, visit Business Set-Up Recommendations and input your details.

Fee Component	What it Covers	Indicative Cost (AED)	Notes
License issuance (annual cost)	Permission to operate	AED 10,000–25,000+ (mainland); AED 5,500–25,000+ (free zone)	Varies by license type, activity, and authority
Trade name reservation	Reserving the business name	AED 620
Initial approval & registration	Preliminary government approvals	Included / varies	Often bundled in total costs but still a separate government step and payment needed
Activity fees	Adding approved scope to operations	~AED 150–500 per activity	Total cost depends on number and type of activities
Chamber of Commerce membership	Mandatory registration in some cases	~ AED 300–2,200 annually
Establishment card (immigration file)	Enables visa sponsorship	~AED 2,000	Required before applying for visas
External approvals (if required)	Municipality, Civil Defense, sector regulators	Variable	Required for regulated industries only

Typical first-year costs can be:

• For mainland: AED 30,000–70,000+ when license, office rent, visas, and compliance costs are included.
• For FZ: AED 18,000–50,000+ depending on zone, visas, and office level.

Hidden costs

Hidden costs are sometimes overlooked, but based on our experience, this becomes apparent at setup and can affect total spend:

• Residence visas (medical, Emirates ID, stamping): ~AED 3,000–7,000 per person
• Office upgrades or larger space
• Annual renewals (license + office)
• Other compliance requirements (for some free zones)
• Local service agent fees (if applicable)
  • Especially required by those who are not able to transact in the mainland
• Amendments (adding activities, partners, address)

Skrooge can help you understand the total cost of launching your business in advance. We have a trusted network of business setup partners who can expertly guide you through the sometimes complex and not-so-straightforward process of establishing your company.

License Renewal and Visa Approvals (Documents Required)

Trade licenses in Dubai must be renewed annually to maintain legal operations and visa eligibility. License renewal is directly linked to the immigration file managed by the General Directorate of Residency and Foreigners Affairs (GDRFA), and late renewal can result in fines, license suspension, and visa processing blocks.

At a Glance

Type	Residence Visa possible?	Eligibility
Commercial	Yes	Standard
General Trading	Yes	Standard
e-Trading	No, with some possible workarounds	Depends on authority and nationality

1. Annual renewal requirement Trade licenses in Dubai are typically valid for one year. Renewal must be completed before expiry to avoid penalties. The license is renewed through the issuing authority (mainland or free zone).
2. Typical renewal timeline For straightforward renewals, it can take only a few working days. Renewals requiring updated approvals or documents may take longer. Those who applied for an instant license must now carry on under a normal license for their second year.
3. Common requirements for renewal below Renewal costs are generally similar to initial licensing fees and vary by license type, activity, and jurisdiction.
   • Valid trade license copy
   • Passport copies of owners/partners
   • Updated tenancy contract / Ejari (if applicable)
   • Memorandum of Association (if amended)
   • External approvals (if required for the activity)
4. Grace Periods & Late Renewal Penalties A grace period may apply after license expiry, depending on the authority (generally, it’s a 30-day grace period after license expires). Late renewal penalties are imposed once the grace period ends. Continued delay can result in:
   • Accumulating fines
   • Suspension of the trade license
   • Blocking of immigration and visa services
   • Inability to apply again or issue residence visa

Visa Quotas & Eligibility

1. Commercial & General Trading Licenses
   • These licenses can sponsor:
     • Investor or partner visas
     • Employee visas
   • Visa quotas depend on:
     • License type
     • Office size or facility
     • Jurisdiction (mainland vs free zone)
2. e-Trading / eTrader Licenses
   • Do not support residence visa by default
   • Intended for home-based or small online sellers
   • In limited cases, holders may be allowed:
     • To work under an existing personal visa (e.g. family-sponsored)
     • To upgrade or convert to a full commercial license later. These options depend on the issuing authority and nationality and are not guaranteed.

Steps to Obtain Residence Visas Under a Trade License

1. Hold a valid trade license
2. Apply for an establishment card (immigration file)
   • Via GDRFA online portal or Smart Services
   • Free zone companies may apply through their free zone authority or ICP portal
3. Allocate visa quota
4. Submit visa application
5. Complete medical testing and Emirates ID
6. Visa stamping and activation

Consequences of Non-Renewal (Important)

Failure to renew a trade license on time may result in:

1. Penalties Late renewal fine is set at about AED 200-1,000 / month (depending on authority), and can accrue with more months of delay.
2. Suspension of business operations Operating with an expired license can lead to larger fines
3. Inability to issue visas
4. Immigration violations for owners and employees
5. Bank account freezes or contract disruptions

How can we help?

While it is possible to apply independently, many founders work with partners like Skrooge —especially when setting up remotely or managing more complex structures.

If you want clarity on the right trade license Dubai option without overpaying or running into regulatory issues, our experienced team is here to assist you, working alongside a network of trusted professional business setup partners to ensure a smooth and compliant process.

This content is provided for general informational purposes only and does not constitute legal, immigration, or regulatory advice. Requirements and fees may change, and professional advice should be called for specific cases.

Frequently Asked Questions on Trade Licenses (FAQs)