Dubai business license fees are vital for contractors and new business owners. These fees are an essential part of the cost of setting up and operating a company in this vibrant business city. Business license fees vary based on the type of business and the type of company. An accurate and detailed understanding of these fees is essential to properly plan the business and determine expected costs.
This article contains an overview of business license fees in Dubai, including basic and potential additional fees, with a focus on how to determine and plan these fees into your business set-up budget in this thriving city. We will also go over the factors that may affect these fees and how to get an accurate estimate of business license costs in Dubai.
Commercial activities in Dubai
In Dubai, a variety of business activities are permitted which include but are not limited to the following:
- General Trade: includes the buying and selling of a wide range of goods and products including consumer goods, electronics, furniture, clothing, tools, equipment, etc.
- Professional services: such as engineering, accounting, legal, marketing, administrative, technological and financial consulting.
- Creative and artistic industries: such as visual arts, design, advertising, cultural and creative activities.
- Building and civil engineering: including building, construction, architecture and engineering design.
- Technology and Software Development: Software development and design, information technologies and ICT.
- Logistics and Shipping: Logistics services include supply chain management, shipping, transportation, and warehousing.
- Hospitality and tourism: includes hotels, resorts, restaurants, cafes, and tourism and entertainment services.
- Education and training: includes universities, schools, educational and training institutes, and professional development.
- Medicine and health: includes medical clinics, hospitals, and public and private health services.
Types of business licenses in Dubai
Commercial licenses vary in Dubai, and the fees for each company vary depending on the activity being started. There are five types of commercial licenses, including:
- General trade licence: which allows the practice of many different commercial activities without any restrictions.
- Events Organizing License: This license enables its holder to organize meetings, hold parties, conferences and large exhibitions.
- Business operating permit: This permit is for companies that wish to obtain a lease contract or want to operate in the free zone.
- Professional license: It is a license that specifies a number of activities. Other activities are not permitted and are subject to the necessary local licenses and permits.
- Commercial license: This is the license that allows its holder to carry out the commercial activities specified in it, such as import, export, distribution, sale, etc.
Basic requirements for obtaining a business license in Dubai
To obtain a business license in Dubai , you must follow the following steps and meet the basic requirements:
- Choosing the type of company: You must specify the type of commercial company you wish to establish, such as a sole proprietorship, limited liability company, joint stock company, etc.
- Determine the business activity: The company’s primary and secondary business activity that the company will conduct must be identified, and this activity must be compatible with the classifications specified by the regulatory authorities in Dubai.
- Choosing a company name: You must choose a unique name for the company and ensure that it has not already been used by another company. The name must also be in line with local regulations and laws.
- Commercial address: A commercial address must be provided for the company in Dubai. The address of the consulting office can be used or an office can be rented in a business center or other approved location.
- Submitting the application: After completing the previous steps, an application for a commercial license must be submitted to the competent regulatory authorities in Dubai, such as the Dubai Department of Economic Development.
- Required documents: A set of documents must be submitted with the commercial license application, such as a copy of the passport of the owner or general manager, business plan, lease contract, certificate of good conduct, and other required documents depending on the type of company and commercial activity.
Trade license fees in Dubai
Business license fees in Dubai are determined based on the type of business activity, location, additional requirements and services your company needs. There is a varied fee system in Dubai and the fees may vary depending on the free zone you plan to establish in and the type of business license you wish to obtain.
Generally, Dubai trade license fees can include the following:
- Registration fees: Includes registration application fees and license issuance fees.
- Business Fees: Additional fees may be charged based on the type of business you wish to engage in. These fees are determined according to the required industrial classification and activity category.
- Virtual Office Fees: If you need a virtual office in the Free Zone, additional fees may apply based on the services provided and the space used.
- Annual renewal fees: An annual fee is charged to renew a business license, and varies according to the type, size, location, and business activity.
- Additional Services Fees: If you require additional services such as labor, financial or consulting services, you may be charged an additional fee.
Tax benefits available to business license holders in Dubai
Dubai provides a distinguished business environment and offers a range of tax benefits to business license holders. Here are some of the tax benefits available in Dubai:
- No personal income tax: In Dubai, personal income tax is not imposed on individuals or residents of the emirate. This means that the personal profits of business license holders are not taxed.
- No corporate tax: Corporate tax is not charged on profits in Dubai. This means that companies operating in Dubai benefit from the absence of tax on profits made.
- Value Added Tax (VAT) is not imposed on some sectors: Starting from January 2018, Dubai has been charged VAT at a rate of 5%. However, there are some exceptional sectors such as health, education and new residential homes that are subject to tax exemption, meaning no VAT is charged on them.
- Smart partnership with countries: Dubai has signed agreements to avoid double taxation with a number of countries, which helps reduce any recurrence of taxation on companies operating in Dubai and in other countries.
- Flexible business environment: Dubai provides a flexible and tolerant business environment, allowing business companies to benefit from effective tax arrangements and tax planning.
Steps that must be followed to renew a commercial license in Dubai
To renew a business license in Dubai , you must follow the following steps:
- Submitting the application: The application to renew the commercial license must be submitted to the competent authority in Dubai, which is usually the Dubai Department of Economic Development.
- Payment of fees: You must pay the fees required to renew the commercial license, and these fees vary based on the type of company and commercial activity.
- Submitting documents: You must submit a set of documents required for the renewal process, such as the renewal application form, a copy of the current commercial license, a copy of the lease contract, a certificate of good conduct, and other necessary documents.
- Examination and review: After submitting the application and documents, employees at the competent authority examine the application and submitted documents, and review them to ensure that all requirements are met.
- Issuing a renewed license: After approving the renewal request and reviewing the documents, a renewal license is issued to the company after paying the required fees.
- Receiving the license: After issuing the renewed license, you can receive it from the competent authority in Dubai or have it sent to you by express mail, according to the specific arrangements.