General trading license in Dubai

In today’s business world, there’s hardly anyone who would not agree that the UAE is a great place to start a business or expand an existing one to, and for good reasons. The stable economy, the governmental steps in supporting foreign investors and businesses, the country’s advantageous location with access to the European, Asian, and African markets along with many other factors make the UAE’s heart, Dubai, one of the most sought-after destinations in the world.

As a business owner, the more versatility you have, the better. Even if you’re running a very field-specific operation, you want to be able to have options instead of putting all eggs in one basket and risking everything in case of sudden changes on the market. One of the ways to provide this versatility is by broadening the scope of goods you can trade. And this is where the General Trading License comes in.

What Is a General Trading License?

A General Trading License in Dubai enables businesses to engage in a wide spectrum of trading activities, including the import, export, distribution, and sale of various goods and products. This type of license is highly versatile and suitable for businesses involved in diverse trading sectors. Basically, it allows business owners to engage in multiple activities at the same time and trade any goods, except for governmentally prohibited ones, under a single license. This is very beneficial as opposed to a regular Trading License, which enables you to trade a specific commodity directly tied to the license.

Here are some of the key advantages of obtaining a General Trading License in Dubai:

1. Diverse business scale. Dubai offers diverse business opportunities, and having a General Trading License enables businesses to explore various industries, sectors, activities, and products, adapting to varying market conditions instead of running the risk of having all eggs in one basket.

2. Potential for expansion. A General Trading License has a built-in potential for expanding your company, as it allows for adding numerous shareholders and an almost unlimited workforce along with visa eligibility, which is a crucial factor for those seeking to expand their operation locally and internationally.

3. No duties or currency restrictions. Under a General Trading License, your company can enjoy zero import duties and can conduct transactions in any currency, providing flexibility for international trade and financial transactions. To top it off, the UAE provides foreign companies with full repatriation of capital and profits.

4. Logistical freedom. The UAE and especially Dubai sit at the crossroads of the global supply chains and shipping routes with all the necessary infrastructure to facilitate local and international trade. Whether you choose to settle in one of the numerous free zones or in Dubai mainland, you will have direct access to the country’s major seaports, airports, and transport system, along with a variety of warehouses and offices, providing you with the utmost logistical capabilities.

General Trading License Costs in Dubai

The cost of a General Trading License in the UAE is a combination of several factors, including the emirate in which you wish to establish your business, the specific business activities you intend to engage in, the type of business structure you choose, as well as using a free zone or the mainland as your company’s grounds.

The approximate cost of a General Trading License in Dubai ranges from AED 12,500 to 35,000. Choosing the mainland for your operation raises the lowest price bar, making it AED 25,000 to 35,000. If you’re looking for the cheapest option in the UAE, consider free zones in the northern emirates, such as SHAMS (Sharjah Media City) in the Emirate of Sharjah, where a General Trading License will cost AED 6,500.

It should be noted that the General Trading License comes with additional expenses you must be aware of before applying for one, as they may increase the overall company setup costs significantly when combined. Here are some cost considerations for obtaining a General Trading License in the UAE:

License application fees. When applying for a General Trading License, you will typically need to pay a non-refundable application fee to the relevant government authority. The application fee can vary based on the emirate and the licensing authority.

Trade name registration. You may incur fees for registering your trade name, also known as a trade or business name, with the relevant authorities. This registration is essential for legalizing your business activities.

Office and warehouse rent. To obtain and maintain a General Trading License, you are required to have a physical office or commercial space in the UAE. The cost of renting office space or a warehouse can vary heavily based on the location, size, and facilities.

Government and regulatory fees. There may be additional government and regulatory fees associated with the licensing process. These fees can be different depending on factors such as the type of business, the number of partners or shareholders, and the intended business activities.

Local sponsorship or partner fees. If you are a foreign investor and do not hold 100% ownership of your business, you may need a local sponsor or partner. The cost of local sponsorship can vary, as it is typically negotiated between the parties involved.

Legal and consultation fees. Many businesses choose to work with legal advisors or business consultants to navigate the licensing process and ensure compliance with UAE regulations. These professional services may involve fees.

Visa and immigration fees. If you plan to obtain residency visas for yourself and your employees or partners, there will be associated costs for visa processing, medical examinations, Emirates ID cards, and other immigration-related expenses.

Renewal fees. General Trading Licenses typically need to be renewed annually, and there will be renewal fees associated with this process.

Value-Added Tax (VAT) registration. Depending on your business activities and revenue, you may need to register for VAT, which could involve administrative costs.

It is advisable to consult with a business advisor or legal expert with experience in the UAE to get a clear understanding of the costs involved and to ensure that you meet all the necessary requirements for your business setup. Additionally, keep in mind that regulations and fees may change, so it's essential to stay updated with the latest information from relevant government authorities.

Activities under the General Trading License

A General Trading License enables the trading of various products, from electronics and textiles to food items and machinery. Be aware of import and export regulations and customs procedures if you plan to be involved in international trade.

Here are some of the common activities that can be conducted under a General Trading License in Dubai:

• Import and Export. Businesses with a General Trading License can import goods into Dubai from other countries and export goods from Dubai to international markets. This includes a wide variety of products such as electronics, textiles, machinery, consumer goods, and more.
• Wholesale Trading. You can engage in wholesale trading, buying products in bulk and selling them to retailers, other wholesalers, or even directly to consumers.
• Retail Sales. While the primary focus of a General Trading License is on wholesale trading, it may also allow for retail sales, depending on the specific terms and conditions of the license. Retail activities may include opening stores or selling products online.
• Trading in Food and Beverages. This license allows trading in food products, including both non-perishable and perishable items. It can cover activities related to food import, distribution, and sale.
• Trading in Electronics and Appliances. Companies can engage in the trading of electronic devices, appliances, gadgets, and related accessories.
• Trading in Building Materials. Businesses can trade in construction and building materials, which are in high demand due to the construction and development projects in Dubai.
• Trading in Industrial Machinery and Equipment. The license covers trading in industrial machinery, equipment, and tools used in various industries.
• Automotive Trading. It allows trading in vehicles, automotive parts, and accessories.
• Health and Beauty Products Trading: Businesses can engage in trading health and beauty products, cosmetics, skincare, and personal care items.
• Pharmaceutical and Medical Equipment Trading. While certain medical activities may require specific healthcare licenses, a General Trading License can cover trading in pharmaceutical products, medical equipment, and supplies.
• Textiles and Apparel Trading. Companies can trade in textiles, clothing, fashion accessories, and related products.
• Toys and Games Trading. Trading in toys, games, and recreational products for children and adults is another possible activity.
• Office Supplies and Stationery Trading. This license can cover the trading of office supplies, stationery, and related items.
• General Commodities Trading. It allows businesses to trade in a broad range of commodities, including agricultural products, raw materials, and more. 

How to Get a General Trading License in Dubai

Here are the key points to understand about obtaining a General Trading License in Dubai:

1. Business Eligibility.

General Trading Licenses are typically available to both UAE nationals and foreign investors. However, foreign investors may require a local partner (a UAE national or a UAE-based company) to hold a majority share (51%) of the business. 

2. Company Structure.

You can choose the appropriate legal structure for your business, such as a Limited Liability Company (LLC) or sole proprietorship, based on your specific requirements and the involvement of partners or shareholders. 

3. Licensing Authority.

To obtain a General Trading License in Dubai mainland, you will need to apply to the Department of Economic Development (DED) or the relevant authority in the specific emirate you plan to operate in. If you’re setting up your company in a free zone, apply to the free zone’s authorities. 

4. Minimum Capital Requirement.

While there may not be a fixed minimum capital requirement for a General Trading License, the DED may assess your business activity and require you to demonstrate sufficient capital to support your trading operations. 

5. Office Space Requirement.

You will need to have a physical office or commercial space in Dubai to obtain this license. The space should be suitable for your business activities and comply with DED regulations. The amount of personnel you can hire also depends on the size of your premises, with free zones offering turnkey office packages eligible for a certain number of employees. 

6. Renewal and Compliance.

After obtaining the license, you must ensure ongoing compliance with DED regulations, which includes renewing the license annually.

When it comes to the actual process of acquiring a General Trading License, the procedure itself includes the following steps:

• Specify your company’s name in accordance with the DED’s naming regulations and apply for its registration.
• Define the legal structure of your business and assess whether you need a local sponsor or partner to meet the ownership requirements.
• Specify the trading activities you plan to engage in under your General Trading License and ensure that your chosen activities align with the license type.
• Secure a physical office or commercial space in Dubai that meets the DED's requirements for your business activities and obtain a lease agreement for the office space.
• Prepare and submit the necessary documentation, which typically includes the Memorandum of Association (MOA), lease agreement, passport copies of partners or shareholders, and other relevant paperwork. The specific paperwork requirements may vary based on factors such as your residential status, the company’s legal entity, size, business activities, etc.
• Apply for your General Trading License to the corresponding authority bodies.
• Pay the necessary fees and wait for your application to be approved.
• Once you receive the approval from the authorities, secure your General Trading License.

Summary

The General Trading License is a great way to expand your operations and tap into different trading fields, business activities, and markets without having to receive individual licenses for each of them. The UAE authorities have facilitated the licensing procedures, but it's important to stay informed about any changes in business licensing and regulatory requirements.

To successfully acquire a General Trading License in Dubai, it is recommended to work with a local consultant or advisor who can guide you through the possible bottlenecks and provide full compliance with all relevant regulations. Our experts at Emirabiz can help you navigate this process and ensure a smooth and successful application. Contact us today to get started.