Renowned as one of the world’s most dynamic business hubs and a magnet for foreign investment, Dubai saw a 25% increase in company registrations in 2024 compared to 2023. These numbers show no signs of slowing down, thanks to the emirate’s strategic location, investor-friendly policies and world-class infrastructure.
However, to operate legally and successfully here, it is essential to understand the types of business licenses in Dubai for foreigners. These licenses determine the activities you can engage in, the regulations you must follow, and the opportunities for growth.
Types of business licenses in Dubai for foreigners – Explained
There are six types of business licenses in Dubai for foreigners: industrial, commercial, crafts, tourism, agricultural and professional.
Commercial License: A commercial license is issued for businesses engaged in trading activities. This includes importing, exporting and selling goods within Dubai or internationally. There are three main types of commercial licenses:
General trading: Companies involved in trading multiple unrelated goods need a general trading license.
Specialised trading: For businesses focused on specific sectors, such as technology, pharmaceuticals or luxury goods.
E-commerce trading: A commercial license can also cover online trading, enabling businesses to sell products globally via digital platforms.
Professional License: This license is for individuals or companies providing professional services. Consultancies, such as management, financial or technical consultancies, would require a professional license. Freelancers, healthcare professionals and legal or accounting firms would also usually require a professional license.
Industrial License: Businesses involved in manufacturing, production or industrial activities need an industrial license. This license is usually issued to factories and facilities that process raw materials into finished products.
Tourism License: Businesses like travel agencies, tour operators and hospitality companies require a tourism license. This license is issued by the Department of Economy and Tourism.
Agricultural License: Entrepreneurs operating in businesses relating to agriculture, such as farming or the sale of agricultural products will usually require an agricultural license.
Crafts License: Individuals or businesses operating in specialised craft sectors, such as carpentry or printing, will need to obtain a crafts license.
How to choose the right business license
It is crucial to choose the right business license for your business. Choosing the wrong time won’t just cost you money and time, it could also result in penalties. Here’s what you need to consider when choosing the right license for your business.
Understand your business needs
Define your short-term and long-term business objectives. Are you planning to trade internationally or operate locally? Will you be offering a service or providing goods? For example, a commercial license is ideal for businesses looking to trade goods, while a professional license is better suited for service providers.
Consider industry requirements
Each industry in Dubai has unique regulations and licensing prerequisites. For instance, many tourism businesses require approvals from the Department of Economy and Tourism, while manufacturing firms need to comply with environmental and safety standards.
Seek expert guidance
The licensing process can be complex and choosing the wrong license can lead to unnecessary expenses. Consulting a business setup expert from the get-go will ensure you select the most suitable license for your venture, saving you valuable time and effort.
Steps to obtain a business license in Dubai
With its business-friendly legislation and low-level bureaucracy, obtaining a business license in Dubai is easier than elsewhere, but it still requires local knowledge and on-the-ground expertise. We’ve broken down the process for obtaining a business license into six steps below. Our expert advisors at Set Hub are always on hand to help answer any questions you have.
Step 1: Define your business activity
To work out which type of license you need, you will need to determine the exact nature of your business activities. This will affect the process and requirements.
Step 2: Choose your business structure
Select the appropriate legal structure, such as a sole proprietorship, limited liability company (LLC) or branch office.
Step 3: Pick your location
You will need to decide early in the process whether you want to set up your business in a free zone or mainland. Setting up in a free zone offers numerous advantages, including 100% foreign ownership and repatriation, 0% income and no requirements for a local sponsor. Many specialist free zones offer tailored support for startups too. Our agents will be happy to help you decide which option best fits your business and requirements.
Step 4: Prepare the documentation
Depending on the location of your business, you may need to apply for initial approval from the Department of Economic Development (DED) or the relevant free zone authority. You will also need to submit the necessary documents, including passport copies, visa details and, depending on the nature of your business, a business plan.
Step 5: Obtain any necessary approvals
Some industries, such as the Ministry of Health, require additional approvals from government authorities.
Step 6: Pay the fees and get your license
Once approved, you will need to pay the required fees, which vary depending on location and business activity. Once you have received your license, you can legally launch your business and start operations.
Benefits of obtaining a business license in Dubai
Setting up a business in Dubai offers countless benefits which offset any complexities you may encounter while applying for your business license, including:
Global connectivity
Dubai’s strategic location between Europe, Asia and Africa makes it an ideal hub for international trade. It’s home to one of the world’s busiest airports and a top-ranked seaport, ensuring seamless connectivity for business owners, as well as those importing and exporting goods.
Generous tax incentives
The UAE’s tax system is famously appealing to entrepreneurs, with low or no corporate tax rates depending on the business, zero personal income tax and VAT exemptions in specific zones.
Business-friendly environment
Dubai consistently ranks as one of the best places in the world to do business, thanks to an easy registration process, digitalised government services and a transparent regulatory environment.
World-class infrastructure
Dubai’s infrastructure supports businesses across all sectors, from cutting-edge technology hubs and high-speed WiFi to state-of-the-art logistics facilities.
Innovation and growth
Dubai actively supports innovation and entrepreneurship through various initiatives and provides funding, mentorship and networking opportunities to help businesses scale.
Why work with Set Hub
At Set Hub, we are committed to helping businesses establish themselves and thrive in the UAE. Our mission is to provide personalised solutions that cater to the unique goals of each entrepreneur and investor, ensuring success in Dubai’s ever-evolving market. From navigating the intricacies of business setup in Dubai to streamlining compliance with local regulations, Set Hub simplifies the journey.
To speak to one of our advisors or to find out more about how we can help, get in touch with our expert team of advisors today.
