With the growing business opportunities in the UAE, many entrepreneurs are exploring the option of setting up a general trading license in te UAE. The UAE, known for its business-friendly environment, offers various advantages for companies looking to engage in general trading activities. In this blog, we will take a comprehensive look at the general trading license in the UAE, its significance in the economy, the process of obtaining one, and the benefits it offers to businesses. Whether you are a local entrepreneur or a foreign investor, understanding the general trading license requirements and procedures is crucial for establishing a successful trading business in the UAE.

What is a General Trading License?

The UAE market is known for its vibrant business landscape, offering ample opportunities for general trading. Companies with a general trading license can engage in the retail business, sourcing products from local and international markets and selling them to individual customers or other businesses. General trading licenses in the UAE mainland require the involvement of a local sponsor, who holds a minimum ownership stake of 51% in the company. On the other hand, free zone trade licenses offer foreign investors the advantage of full ownership, without the need for a local sponsor.

A general trading license in the UAE enables companies to trade in a wide range of products, including electronics, apparels, consumer goods, automobile accessories, and more. It provides the flexibility for companies to adapt to market demands and trade in diverse products based on the business opportunities available. Companies with a general trading license can explore lucrative trading prospects both within the UAE and in the international market, contributing to the growth of the UAE economy.

Process of Getting a General Trading License in the UAE

To obtain a general trading license in the UAE, first, determine whether to establish in Dubai mainland or free zone. Then, choose a company name and activity, and draft the LLC company’s memorandum. Next, apply for initial approval from the Department of Economic Development (DED). After that, acquire an office space, finalize legal documents, and submit the application for the general trading license. Finally, receive the commercial license from DED, and register with the Chamber of Commerce and Industry in Dubai mainland.

Step 1: Selection of Trading Activities:

• Conduct thorough market research to identify viable trading activities that align with market demand and regulatory compliance.
• Evaluate the potential profitability, scalability, and sustainability of each chosen activity within the UAE market.
• Consult with industry experts or legal advisors to ensure compliance with local laws and regulations governing specific trading sectors.
• Explore opportunities for diversification within chosen categories to maximize revenue streams and mitigate risks.
• Consider the long-term implications of selected activities on supply chain logistics, licensing requirements, and operational overheads.
  

Step 2: Legal Framework Establishment:

• Delve into the intricacies of mainland versus free zone incorporation, weighing the pros and cons of each jurisdiction in alignment with your business objectives.
• Engage in detailed discussions with legal counsel to understand the legal implications, taxation frameworks, and corporate governance requirements associated with different business structures.
• Evaluate the strategic advantages of establishing a new entity, an international branch, or a subsidiary, considering factors such as market penetration, brand recognition, and regulatory compliance.
• Explore the feasibility of joint ventures or strategic partnerships to leverage local expertise, access new markets, and enhance competitiveness.
• Develop a comprehensive business plan outlining the chosen legal framework, organizational structure, and strategic roadmap for sustainable growth and profitability.
  

Step 3: Reservation of Business Name:

• Conduct a thorough search of existing business names and trademarks to ensure uniqueness and avoid potential legal disputes.
• Brainstorm creative and memorable business names that resonate with your target audience and reflect your brand identity and values.
• Verify the availability of chosen business names through official channels and initiate the reservation process promptly to secure your preferred choice.
• Ensure compliance with regulatory guidelines regarding prohibited terms, offensive language, and cultural sensitivities to avoid delays or rejections in the registration process.
• Leverage online tools and resources for domain name availability checks to align your business name with digital branding strategies and online presence.
  

Step 4: Attainment of Initial Approval:

• Prepare a comprehensive documentation package including trade name registration payment receipts, shareholder information, visa documentation, and other requisite legal documents.
• Engage proactively with relevant governmental authorities to expedite the approval process and address any queries or concerns promptly.
• Seek guidance from experienced legal advisors or business consultants to navigate regulatory complexities and ensure compliance with licensing requirements.
• Establish clear communication channels with regulatory authorities to facilitate the exchange of information and documentation throughout the approval process.
• Anticipate potential challenges or delays in the approval process and implement contingency plans to mitigate risks and maintain momentum towards license issuance.
  

Step 5: Submission of Trading License Application:

• Compile a comprehensive application package containing all necessary legal documents, approvals, and payment receipts to streamline the licensing process.
• Conduct a thorough review of the application form to ensure accuracy, completeness, and compliance with regulatory requirements before submission.
• Coordinate closely with regulatory authorities to address any additional documentation requests or clarification requirements in a timely manner.
• Monitor the progress of the application closely and follow up proactively with regulatory authorities to expedite processing and minimize delays.
• Stay informed about any changes or updates to licensing procedures, requirements, or fees to adapt your application strategy accordingly and maximize the likelihood of approval.

Documents Required for General Trading License in the UAE

Essential documentation must be furnished to the relevant authorities to procure a general trading license in the UAE. These documents include:

• Passport copies of shareholders.

• Visa page or entry stamp.

• Passport-size photographs.

Benefits of Acquiring a General Trading License in the UAE

Broadening your business horizons with a general trading license in the UAE offers access to diverse trading opportunities. The flexibility in business operations, along with unrestricted access to the UAE and GCC markets, provides a competitive edge. Additionally, establishing your business in Dubai mainland as an LLC company under this license can significantly enhance your market presence and credibility.

1. Broad Range of Trading Opportunities

Companies holding a general trading license in the UAE have access to a diverse array of trading opportunities, including retail and wholesale trade. This allows them to engage in trading various products such as electronics, textiles, and more. Such businesses can effectively meet the demands of different industries within the UAE. Moreover, the general trading license facilitates access to international trade markets, enabling companies to expand their reach and operations seamlessly.

2. Flexibility in Business Operations

With a general trading license, companies have the flexibility to engage in professional activities and trade in a diverse range of products and services within the UAE. This license also allows them to establish physical office spaces, whether in Dubai mainland or LLC companies. Additionally, opting for free zone licenses provides further flexibility in business operations, enabling general trading companies to engage in international trade and access global markets effortlessly.

3. Access to the UAE and GCC Markets

With a general trading license in the UAE, companies gain access to both the local market and the GCC, allowing for expansion of their trading activities. Additionally, they have the opportunity to trade in the UAE mainland and free zones, and can establish a bank account in the UAE. This access enables companies to trade in a wide range of products in both the UAE and the GCC market, facilitating further business growth and opportunities.

4. Robust Infrastructure

Access to high-quality infrastructure facilitates efficient business operations. In the UAE, particularly in Dubai, the infrastructure is modern, well-maintained, and designed to support various industries. Robust infrastructure includes reliable transportation networks (roads, airports, ports), advanced telecommunications systems, modern office spaces, and utilities like electricity, water, and internet connectivity. Businesses benefit from efficient logistics, smooth supply chain operations, and the ability to connect with global markets seamlessly, enhancing productivity and competitiveness.

5. Streamlined Setup

Setting up a business in the UAE, especially in Dubai, is known for its streamlined process. The government has implemented initiatives to simplify bureaucratic procedures, making it easier for entrepreneurs to start their ventures. Obtaining business licenses, which are essential for legal operation, typically takes a relatively short time of 7-10 working days. This rapid process minimizes delays and allows businesses to commence operations swiftly. The simplified setup procedure encourages entrepreneurship, attracts foreign investment, and contributes to the overall economic growth by fostering a business-friendly environment.

6. Minimal Trade Barriers

Dubai’s business environment is characterized by minimal financial and regulatory barriers, making it attractive for businesses seeking profitability and operational flexibility. Low tax rates, free trade zones, and lenient regulations contribute to an environment where businesses can thrive with fewer constraints on their operations. This conducive environment encourages international trade, stimulates investment, and promotes innovation. Businesses can explore new markets and expand their operations with greater ease, leading to sustainable growth and prosperity.

Costs of Obtaining a General Trading License in the UAE

The cost of obtaining a General Trading License in Dubai comprises several components. Initially, there are fees associated with reserving the trade name, which amounts to AED 620. Following this, there are initial approval fees totaling AED 120, along with Tasheel fees for initial approval and Memorandum of Association (MOA), which amount to AED 345 and AED 350 respectively. The license itself incurs costs ranging from approximately AED 12,500 to 15,000, with additional DED Activity Fees specific to General Trading amounting to AED 15,000. An Immigration Card, necessary for conducting business, carries a fee of AED 750. In total, the cost of a general trading license in Dubai sums up to AED 29,685.

Additional costs may arise in the form of expenditures such as annual rent for premises, visa costs for investors and employees, and 5% annual rent Dubai Municipality fees. The total expenditure for acquiring a general trading license in Dubai varies based on factors like the number of partners and managers in the company, as well as the chosen trade name. Typically, this falls within the range of AED 28,000 to 32,000.

For further details regarding the costs and procedures associated with obtaining a general trading license in the UAE, or for guidance on starting a company in Dubai, please feel free to contact us at www.arnifi.com. We provide comprehensive assistance to individuals seeking to establish businesses in the region.

We have some great deals in different free zones in the UAE like SHAMS, Creative City, MASDAR, Meydan, UAQ, Hamriyah, Digital Oasis, and more. Take a look at what’s available by clicking the link.

Is Residency in UAE Mandatory for Owning a General Trading Business?

No, residency in the UAE is not mandatory for owning a general trading business. Foreign investors can establish a general trading company without local shareholders and have the option to choose between setting up in the mainland or free zones. The UAE government encourages foreign ownership in trading activities, making it easier for non-residents to start their businesses.

Conclusion

To summarize, obtaining a general trading license in the UAE opens up a world of opportunities for entrepreneurs. The country’s robust economy and strategic location make it an ideal hub for conducting business. The license allows you to engage in a wide range of trading activities, giving you the flexibility to explore various industries. Additionally, the UAE provides access to both local and GCC markets, further expanding your potential customer base. While the cost of acquiring a general trading license may vary depending on several factors, it is possible to minimize expenses through careful planning. Lastly, residency in the UAE is not mandatory for owning a general trading business, making it an attractive option for international investors. With the right knowledge and resources, you can navigate the process of obtaining a general trading license and establish a successful business in the UAE.

About Arnifi

Arnifi is digital first Corporate service provider helping companies enter the Middle East region, starting with UAE and Saudi Arabia markets. Founded and backed by professionals from Amazon, Souq and other large companies operating in KSA – the team understands what it takes to succeed as a startup in both UAE and Saudi Arabian markets, apart from going through the setup process multiple times. Arnifi will provide a truly digital experience to entry and scale up of companies both UAE and Saudi Arabia. The Arnifi promise is simple, yet revolutionary, use technology and a great team to provide transparency, efficiency and great customer experience in the whole process. Check out at – www.Arnifi.com for more details.