What Licenses Are Required to Start a Business in Dubai
Starting a business in Dubai is an exciting opportunity for entrepreneurs and investors. Thanks to its strategic location, tax-friendly environment, and world-class infrastructure, Dubai has become a global hub for startups and multinational companies alike. However, before starting your business, one difficult step stands in your way: obtaining the right business license.
In this guide, we’ll walk you through:
- The types of licenses required to start a business in Dubai
- How to apply for a business license
- Cost considerations and regulatory requirements
- Answers to the most common questions about business setup in Dubai
What Is a Business License in Dubai?
A business license in Dubai is an official document issued by the Department of Economic Development (DED) or a relevant free zone authority, authorizing the operation of a business legally in the UAE. Without this license, you cannot conduct commercial activities in the region.
Types of Business Licenses in Dubai
Dubai offers several license categories depending on the nature of your business activity and where your business is registered (mainland, free zone, or offshore). Here’s a breakdown of the major types:
1. Commercial License
- For businesses involved in trading or general commercial activities
- Examples: Import/export, retail, real estate, logistics
2. Industrial License
- Required for manufacturing or industrial activities
- Examples: Factories, food production units, equipment manufacturing
3. Professional License
- Ideal for individuals offering services or consultancy
- Examples: Lawyers, engineers, IT consultants, photographers
4. Freelance Permit
- Offered mostly in free zones for independent professionals
- Examples: Designers, content creators, developers
5. Educational License
- Required for institutions offering training or academic services
- Examples: Schools, training centers, edtech companies
Mainland vs. Free Zone Licenses: Which One Do You Need?
Mainland License
- Issued by the Department of Economic Development (DED)
- Allows businesses across all of the UAE
- May require a local service agent (depending on activity)
- Higher flexibility in the client base
Free Zone License
- Issued by specific free zone authorities
- Offers 100% foreign ownership
- Usually, faster setup and tax incentives
- Limited to operating within the free zone or abroad, unless you partner with a mainland distributor
Pro Tip: If you’re unsure where to start, consider beginning with a free zone for lower costs and easier entry.
Step-by-Step: How to Apply for a Business License in Dubai
Here’s a simple roadmap to get a license for your Dubai-based business:
Step 1: Choose Your Business Activity
Start by deciding what your business will do. Each license is tied to a specific activity code, as listed by the DED or free zone authorities.
Step 2: Select a Business Jurisdiction
Decide between the mainland, the free zone, or the offshore option. Your choice affects ownership rights, taxation, and legal obligations.
Step 3: Reserve a Trade Name
Pick a unique trade name that complies with UAE naming laws. You can check availability on the DED portal.
Step 4: Get Initial Approval
Apply for initial approval from the relevant authority. This acts as a go-ahead to proceed with your licensing process.
Step 5: Prepare Legal Documents
You’ll need to submit documents like:
- Passport copies of shareholders
- Visa or entry permit
- MOA (Memorandum of Association)
- Lease or tenancy contract for office space
Step 6: Submit the License Application
Once the documents are ready, submit your application to the DED (for the mainland) or the respective free zone authority.
Step 7: Receive Your License
After approval and payment of the fee, you’ll receive your business license, typically within 5 to 10 working days.
What Is the Cost of a Business License in Dubai?
Business setup costs vary depending on the license type, jurisdiction, and visa quota. Here’s a rough estimate:
| License Type | Estimated Cost (AED) |
|---|---|
| Commercial License | 10,000 – 30,000 |
| Professional License | 7,000 – 15,000 |
| Free Zone Package | 5,000 – 25,000 |
| Industrial License | 15,000 – 40,000 |
Pro Tip: Some free zones offer zero visa packages for solo entrepreneurs starting lean.
Documents Required for a Dubai Business License
To complete your business license application, you’ll typically need:
- Passport copies of all shareholders/partners
- Emirates ID (if resident)
- Visa copy (or entry permit)
- Trade name reservation certificate
- Initial approval certificate
- Tenancy contract or Ejari (for mainland)
Keep all documents scanned and ready in both digital and physical format.
Final Thoughts
Setting up a business in Dubai is an attractive proposition; however, understanding the required licenses and the application process is crucial for ensuring a smooth launch. Whether you’re starting as a solopreneur, service provider, or full-scale enterprise, having the correct license protects you legally and opens doors to growth.
Ready to Start Your Business in Dubai?
Let our experts guide you through the license application process, help you choose the right setup, and handle all the paperwork, so you can focus on building your dream business.
Contact us today for a free consultation!
