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UAE business license

The United Arab Emirates (referred to as the UAE throughout this text) as a jurisdiction for setting up a business presents several distinctive features. One of these features is licenses. In the UAE, all companies, regardless of their registration in free zones or the mainland, are required to obtain them. Similar to elsewhere, the UAE business license serves as specific "permission" for conducting particular activities.

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UAE business license

Posted 25 December 2023

General information about UAE licenses

Obtaining a UAE business license is an extremely crucial and necessary process. This showcases a company’s legitimacy, making it absolutely vital. The license is issued as a separate document to a company after its registration along with its founding documents. Typically, the license also specifies the activity codes of the company, which precisely describe what the company plans to engage in. Thus, it’s important to clearly articulate the intended business activity to ensure the license aligns accurately.

Types of licenses in the UAE

The UAE business license can correspond to specific types of activities. Based on what a company plans to do, the required license is determined. The list and names of licenses depend on the territory where the company will be registered, whether it’s a free zone or mainland. However, the most popular licenses in the UAE include:

  1. Trade License.
    A trade license can be general or specialized, catering to specific goods’ buying and selling purposes.
  2. Service License.
    Also known as a service-providing license. The exact name of the license depends on the nature of the services the company intends to offer: legal, consulting, medical, or others.
  3. Manufacturing License.
    Suitable for companies engaged in manufacturing or industrial activities, such as establishing a factory in the UAE for producing goods.
Important:
If setting up a factory and conducting business across the entire UAE, a company cannot operate within a free zone alone. It will be necessary to obtain a local license and establish a local company.

Procedure for obtaining a UAE business license

Requirements for obtaining a license in the UAE are determined by each Emirate separately. Hence, it’s essential decide where exactly the future company will be registered. The conditions for obtaining a license in the UAE are set by both the UAE Government and the governments and economic development departments of each Emirate and free zone individually. However, in general terms, the steps for obtaining and renewing a UAE business license can be outlined as follows:

  1. Detailed description of the future company’s activities.
    Providing an accurate description of the company’s intended activities is important for determining the appropriate license.
  2. Company registration and license acquisition.
    The average time to obtain a company license is 5 days. However, it largely depends on the nature of the business and the issuing authority.
  3. Renewal of the license upon expiration.
    Licenses in the UAE are not indefinite, so each license needs timely renewal.

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License duration

Any UAE business license is issued for a period of one year. Each year, the license must be renewed in advance (at least one month before expiration).

Important:
Failure to timely renew a license may result in fines for the company or, in cases of prolonged non-renewal, even the forced suspension of the company’s operations. Additionally, if the company holds an account, the bank may close it.

Conclusion

Every company registered in the UAE is required to have a license, regardless of the type of activity. This is one of the key features of the UAE as a business jurisdiction. All companies in the UAE must obtain a license, making all activities in the UAE “licensed.” GFLO Consultancy offers a complete range of corporate and accounting services in the UAE. We would be pleased to assist you with any inquiries. Contact us for a cost estimate and a free consultation.

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