If you’re planning to start a business in the UAE, the first thing you need is a trade licence. This is the legal document that allows you to operate within the country.
Without it, your business is not recognized by the authorities, and you cannot legally sign contracts, open bank accounts, or hire staff.
This article explains the types of trade licences in the UAE, the steps to obtain one, the difference between mainland and free zone licences, and recent legal updates.
It also outlines how our law firm can help you comply with UAE licensing laws and operate your business safely and legally.
Contact our expert lawyers & legal consultants in UAE. Click the WhatsApp icon below.
Table of Contents
Trade Licences in the UAE
A trade licence is a legal requirement for any business operating within the United Arab Emirates.
It is issued by the relevant government authority and defines the business activities your company is permitted to carry out.
Without this licence, a company cannot conduct business, enter into contracts, or open corporate bank accounts.
The trade licence also ensures that your company complies with UAE commercial laws and meets all operational standards as outlined by regulatory authorities.
Licences are issued by either the Department of Economic Development (DED) in each emirate or by one of the UAE’s many free zone authorities.
These licences fall under specific categories based on the company’s core business activity.
Selecting the correct licence is essential, as each type comes with different legal responsibilities, operational permissions, and documentation requirements.
Types of Trade Licences
There are six official categories of trade licences recognized in the UAE.
These are classified based on the nature of business activity and are designed to ensure that companies operate legally within their respective sectors.
Each licence type allows specific activities and may require additional approvals or compliance steps.
Choosing the wrong type can result in a licence suspension or rejection of your business registration.
It is important to align your company’s primary and secondary activities with the appropriate category to avoid legal complications later.
Commercial Licence
A commercial licence is one of the most widely used trade licences in the UAE.
It is suitable for businesses involved in any type of trading activity, including import, export, and the buying or selling of goods or commodities.
This includes general trading companies, retail shops, wholesalers, logistics firms, and contracting companies.
A commercial licence allows businesses to operate in local markets, participate in tenders, and trade internationally.
It also supports multi-activity operations, making it flexible for entrepreneurs who plan to grow or diversify. Issuance requires DED or free zone approval, a physical office lease, and a trade name.
Professional Licence
A professional licence is issued to businesses that provide specialized services based on academic qualifications, experience, or intellectual skill.
This includes consultants, engineers, architects, IT service providers, designers, trainers, and freelancers.
It is particularly useful for individuals who want to operate independently or form partnerships without requiring a local shareholder.
Although some sectors may still need a local service agent, the law permits 100% foreign ownership for many professional categories.
Professional licences often require proof of education or certification, making them more documentation-intensive but ideal for service-based companies.
Industrial Licence
An industrial licence is required for companies involved in manufacturing, processing, assembly, or packaging of goods and products.
Businesses under this category include factories, food production plants, industrial facilities, and heavy equipment manufacturers.
To obtain this licence, additional approvals are typically needed from the Ministry of Industry and Advanced Technology, and the business must be listed on the national Industrial Register.
Holders of this licence can benefit from customs exemptions and government incentives. A suitable premises and minimum capital investment may also be required, depending on the nature of the industry.
Tourism Licence
Tourism trade licences in the UAE are mandatory for any business operating in the travel, tourism, and hospitality industries.
This includes travel agencies, tour operators, event planners, cruise companies, and hospitality service providers such as hotels and resorts.
In addition to approval from the DED or free zone, businesses must get consent from the local tourism authority.
The licence ensures the company meets standards for guest safety, ethical tourism, and international travel regulations.
It is especially important for businesses serving international clients, as it often covers visa processing and ticketing services.
Agricultural Licence
The agricultural licence is intended for businesses that engage in farming, fisheries, livestock, and other agribusiness activities.
While not as common in urban areas like Dubai and Abu Dhabi, this license is essential for rural and semi-rural business operations.
Companies involved in crop farming, animal breeding, dairy production, or fish farming must acquire this licence and follow environmental and health standards enforced at the federal and emirate levels.
Additional certifications and inspections may be required to ensure food safety, biosecurity, and sustainable resource management.
Occupational (Crafts) Licence
The occupational or craft licence applies to skilled workers and businesses offering technical services.
Common examples include electricians, carpenters, plumbers, HVAC technicians, and mechanical service providers.
This licence certifies that the individual or company is qualified to provide specialized manual or technical work.
It is often used by small businesses or sole practitioners operating in the construction, repair, and maintenance sectors.
To obtain this licence, applicants may need to show prior experience or technical qualifications.
It supports both mainland and free zone operations and is a vital credential for compliance with UAE safety laws.
Mainland vs. Free Zone Trade Licences
In the UAE, businesses must choose between a mainland or free zone setup.
This choice impacts the type of trade licence you receive, your ability to trade within the country, and your company’s ownership structure.
Understanding the difference is crucial to avoid restrictions on operations or unexpected compliance issues.
Mainland companies can operate anywhere in the UAE and deal directly with the local market, while free zone companies enjoy tax and ownership advantages but face certain geographic limitations.
Each setup has benefits and legal implications depending on your business model.
Mainland Trade Licence
A mainland trade licence is issued by the DED in the relevant emirate and allows companies to do business anywhere in the UAE.
This includes working with government bodies, taking on private sector contracts, and retailing to consumers.
As of 2021, the UAE permits 100% foreign ownership for most activities in the mainland, eliminating the former requirement for a local partner in many cases.
This change has opened new opportunities for foreign investors. Mainland businesses must have a physical office space and must register with the Chamber of Commerce.
They are also subject to VAT and corporate tax as per UAE laws.
Free Zone Trade Licence
Free zone trade licences in the UAE are issued by dedicated authorities within special economic zones.
These zones are designed to attract foreign investors by offering benefits such as 100% foreign ownership, 0% corporate tax (for qualifying income), and simplified business setup procedures.
Free zone businesses can only operate within the free zone or export abroad unless they use a local distributor to access the mainland.
This model suits international companies, tech startups, and logistics firms.
Free zones also offer flexible office solutions and streamlined digital services, although rules and capital requirements vary between zones.
Steps to Get a Trade Licence in the UAE
The process of obtaining a trade licence in the UAE is structured, standardized, and designed to ensure legal compliance at every stage.
While the steps are clearly defined and supported by digital platforms, it’s important to follow each one carefully.
Missing a requirement or step can result in delays or rejection.
Each emirate and free zone has its own portal and documentation standards, but the core steps remain largely the same across the country.
1. Choose Business Activity and Licence Type
Start by identifying your primary and secondary business activities. The UAE classifies over 2,000 approved activities, each linked to a specific type of licence.
Your chosen activity determines not just the licence type but also which ministries or authorities you need approvals from. It’s important to select accurately.
2. Select Legal Structure
Your legal structure affects ownership, liability, documentation, and taxation.
Common options include Limited Liability Company (LLC), Sole Establishment, Civil Company, or Branch of a foreign/local company.
Your choice will also determine whether you need a local service agent or if 100% foreign ownership is allowed under the law.
Learn about the most common types of company formation in the UAE.
3. Reserve a Trade Name
You must propose a unique business name that meets UAE naming guidelines.
It should reflect your business activity, not conflict with existing names, and avoid religious, offensive, or political terms.
Where applicable, the name must also include the legal structure abbreviation, such as “LLC” or “FZ LLC”.
4. Obtain Initial Approval
Initial approval is a no-objection certificate issued by the DED or free zone authority.
It shows the government has no objection to your business setup under the stated ownership and activity.
External ministry approval may be needed first if your business falls under regulated sectors (e.g., education, healthcare).
5. Prepare and Submit Documents
Submit the required documents, which typically include the following:
- Passport copies.
- Emirates IDs (for residents).
- Lease agreements.
- Initial approvals.
- Trade name reservation.
- A Memorandum of Association (MOA)
- Service agent agreements (if applicable).
Documents must often be translated into Arabic and notarized. In some cases, corporate shareholders must submit board resolutions and incorporation documents.
6. Pay Fees and Receive Licence
After documents are verified, pay the applicable government and registration fees. Fees vary by emirate and licence type.
Once payment is confirmed, the authority issues your official trade licence.
You may also receive your Chamber of Commerce certificate and establishment card for immigration processing.
7. Optional: Use Instant Licence
Dubai offers an Instant Licence option for selected activities that require no prior external approvals. This licence can be issued online in minutes through the “Invest in Dubai” portal.
It allows entrepreneurs to begin operating immediately, with a one-year grace period to submit a lease and finalize documentation.
Learn more about:
Recent Trade Licence UAE Regulatory Updates (2021–2025)
Over the past few years, UAE authorities have introduced significant regulatory updates aimed at simplifying and accelerating the business setup process.
These changes aim to attract more foreign investors and encourage innovation. They also support economic growth by streamlining licensing procedures.
Additionally, they expand ownership rights and provide greater flexibility for entrepreneurs and startups.
Full Foreign Ownership
Since June 2021, businesses in most sectors can be 100% owned by foreign investors.
This reform eliminated the previous requirement for UAE nationals to hold 51% of shares in mainland companies.
The change makes it easier for international entrepreneurs to fully control their business operations in the UAE.
Corporate Tax
In 2023, the UAE introduced a federal corporate tax of 9% on business profits above AED 375,000. This tax applies to mainland companies and some free zone businesses.
However, free zone entities that meet specific criteria and generate qualifying income may continue to enjoy a 0% tax rate.
Digital Licensing Platforms
To simplify setup, the UAE launched several digital platforms such as Basher, TAMM (Abu Dhabi), and Invest in Dubai.
These portals integrate federal and local services, allowing businesses to apply, upload documents, pay fees, and get trade licences in the UAE issued entirely online. This significantly reduces processing time and human error.
Virtual Business Licences
The UAE now allows non-resident entrepreneurs to obtain virtual licences without living in the country.
These trade licences in the UAE cover various sectors including consulting, tech, media, and e-commerce.
They can be applied for entirely online and are ideal for foreign businesses wanting a UAE presence without full physical relocation.
AI and Coding Licences
In 2023, Dubai launched an Artificial Intelligence and Coding Licence through DIFC. This licence is aimed at software firms, AI researchers, and tech startups.
It offers access to tech hubs, government incentives, and eligibility for long-term Golden Visas. It reflects the UAE’s push for digital transformation and innovation.
Legal Services Related to UAE Trade Licences
We offer comprehensive legal support for businesses that need to obtain trade licences in the UAE.
Our licensed attorneys assist in every step of the process.
This includes selecting the appropriate legal structure, drafting necessary documents, obtaining regulatory approvals, and ensuring complete compliance with UAE laws, regulations, and licensing authorities.
Legal Structuring and Ownership Guidance
Our legal consultants in Dubai advise on the most suitable legal structure for your business based on ownership, activity type, and risk management.
Whether you plan to operate as an LLC, professional firm, or branch, we ensure full compliance with the UAE Commercial Companies Law and sector-specific regulations that may affect foreign ownership.
Drafting and Reviewing Legal Documents
Our legal team prepares and reviews essential documents such as the Memorandum of Association, Service Agent Agreements, Board Resolutions, and shareholder contracts.
We also provide Arabic legal translations and notarization support, ensuring that all submitted materials meet the standards required by UAE authorities.
Handling Regulatory Approvals
Some business activities require pre-approval from external authorities like the Ministry of Health, Central Bank, or the Tourism Department.
We handle all communication and submission processes with these regulators to ensure your licence application is not delayed due to missing or incorrect approvals.
Trade Licence Dispute Resolution
If your trade licence is suspended, cancelled, or challenged, we provide expert legal representation to resolve the issue.
We also assist with activity violations, penalties, non-compliance notices, and any legal challenges arising from commercial licensing or regulatory disputes in the UAE.
Legal Compliance for Foreign Investors
We support foreign investors in navigating the UAE’s licensing rules, helping them obtain 100% ownership where permitted, identify restricted sectors, and avoid local sponsor pitfalls.
We ensure all documentation and structure align with current UAE laws for foreign-owned business setups.
Find more services from top Commercial Lawyers in Dubai UAE.
FAQs about UAE Trade Licences
Obtaining a trade licence in the UAE is a legal requirement and the cornerstone of operating a legitimate business.
Whether you choose to register on the mainland or within a free zone, you must follow the correct procedures and meet all legal obligations.
The UAE’s recent reforms offer greater ownership, faster approvals, and online services—but compliance is non-negotiable.
Our law firm is here to ensure your licensing process is smooth, legally sound, and fully aligned with UAE regulations.
We provide the legal foundation for your business success—right from day one.
Contact our law firm in UAE for expert help. Click the Whatsapp icon below.
A law graduate and legal writer focusing on UAE law, he became known for his ability to clarify complex legal concepts through his writings. His work simplifies the intricacies of the legal landscape in the Emirates, helping both locals and expatriates navigate their legal concerns.
