Types of business licenses in the UAE
BUSINESS
COMPANY REGISTRATION
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A business license is a document that defines what activities a company can carry out in the UAE. Each business license is issued by the registration authority and displays a list of company’s activities.
A Mainland license allows a company to conduct business in the UAE. A Free Zone Company License allows a company to conduct business only within the Free Zone or with other Free Zones. An offshore company cannot conduct business in the UAE at all.
This article has broken down what types of licenses exist in the UAE.
A Mainland license allows a company to conduct business in the UAE. A Free Zone Company License allows a company to conduct business only within the Free Zone or with other Free Zones. An offshore company cannot conduct business in the UAE at all.
This article has broken down what types of licenses exist in the UAE.
01
Licenses in the Free Zone
Each free zone has its own list of activities and licenses for them. There are times when one free zone does not have certain activities that you need. Then you have to look towards another free zone where they are available. Otherwise, you will not be able to obtain the necessary licenses and carry out the planned activities.
For example, Meydan Free Zone has the following types of licenses:
For example, Meydan Free Zone has the following types of licenses:
Professional license
Allows you to provide consultancy or other professional services specified in the license. Examples of professional licenses: management, HR consulting, business consulting, education, logistics, real estate, investing one’s own funds (holding), etc.
Trade license
Allows the holder to import, export, sell, distribute and store the goods specified in the license. Examples of trade licenses: e-commerce, trade in a certain type of goods. BMS Meydan, among others, provides a general trading license, which allows the holder to import, export and sell any type of goods.
Media license
Allows the holder to provide services related to information dissemination, advertising, PR, marketing, etc.
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02
Mainland Licenses
Having a mainland license allows you to conduct trading activities in the UAE. Mainland and Free Zone licenses differ in cost, type, and requirements for additional permits.
Companies incorporated in the Mainland may have a 100 per cent foreign owner in the UAE from 1 June 2021, subject to certain exceptions. It is therefore important to check the composition of the shareholders before starting to register a company in Mainland. We provide below a list of licenses with a local ownership requirement.
Companies incorporated in the Mainland may have a 100 per cent foreign owner in the UAE from 1 June 2021, subject to certain exceptions. It is therefore important to check the composition of the shareholders before starting to register a company in Mainland. We provide below a list of licenses with a local ownership requirement.
Commercial Licenses (LLC) — 100% foreign ownership
- Trade — sales of food and beverages, cosmetics, fertilisers, live animals and plants, medicines and chemicals.
- Investment — unregulated licenses for venture capital investments, commercial projects. Does not include third party asset management activities.
- Construction — for the construction of all types of buildings and structures and the provision of subcontracting, infrastructure works, except design.
- Logistics — for all types of freight and passenger land, air and sea transportation, including freight chartering and airline representative activities.
- Tourism — activities of hotels of all types and categories, guest houses or apartments. Excluding travel agencies.
- Industry — industrial licenses for all types of manufacturing, processing, including the extraction of natural resources, except oil and gas.
Professional Licenses (SE) — 100% foreign ownership
- Public services — Cleaning, laundries, ateliers, beauty salons, repair and craft workshops, or car services.
- Management and consultancy — Project management, management, tax and HR consultancy, specialist advice.
- Medicine and health care — Medical centres, private hospitals, clinics, laboratories, pharmaceutical consultancy.
- Sport and education — Pre-school, secondary and higher education, courses, trainings, sport clubs.
- Catering and Agriculture — Restaurant operations, catering, cafes, fast food outlets, farms, crop production.
- Information technology — Information security, network configuration, maintenance of office equipment, software development.
Licenses requiring 51% nominal local ownership
Incorporation of Mainland companies in strategic sectors still requires the appointment of a 51% nominee local partner with a waiver from the courts.
- Investment and financial licenses — brokers and other financial intermediaries, commodity and currency exchanges, currency exchanges.
- Television and radio broadcasting — independent video, radio broadcasting via satellite, television, or radio channels.
- All types of insurance — companies that specialize in life, health, property and financial risk insurance.
- Real Estate Development — the development of real estate and infrastructure, including the subsequent sale of such projects.
- Engineering and Surveying Licenses — design work and geotechnical site surveys for planned construction.
- Fisheries — breeding and harvesting of live fish or seafood, including artificial reservoirs and fish farms.
Licenses restricted to foreign ownership
Strategic activities, which are legally restricted to foreign ownership, are widely carried out by expatriates by formalising 100% ownership by a local partner and then relinquishing rights to the foreign investor, who is appointed by the general managing director.
- Real Estate Brokers — Agents handling the sale and purchase of properties and rentals to third parties.
- Real Estate Trustee — Companies who are trusted representatives of clients' interests in the Land Department.
- Legal Officers — Representing clients in court, notary offices and litigation support.
- Printing and Publishing — Printers specialising in the production of commercial documents, cheque books, credit cards, etc.
- Recruitment agencies — Provision of workers upon request, as well as support for their employment in accordance with government requirements.
- Charitable foundations — Non-profit public, semi-public and private organisations, e.g. in the form of NPOs.
03
Features of obtaining a license
One Mainland company license allows up to 10 (inclusive) activities belonging to one group. One FreeZone company license usually allows up to 3 (inclusive) groups of activities. If a broader list of activities is required, the license needs to be extended for an additional fee. The fee for expansion may vary depending on the type of company and the specific FreeZone.
The company can usually operate in only one area (e.g. equipment trade). If a company plans to engage in outside activities (e.g. real estate agency), a separate legal entity must be registered.
Generally, a number of documents are required in order to obtain a business license: a completed application form and copies of passports of shareholders. Some free zones also require a business plan.
The license is issued together with the certificate of incorporation of the legal entity.
The validity period of the license is 1 year. After that, it must be renewed. The renewal fee is usually equal to 100% of the cost of the license at the time of registration.
The company can usually operate in only one area (e.g. equipment trade). If a company plans to engage in outside activities (e.g. real estate agency), a separate legal entity must be registered.
Generally, a number of documents are required in order to obtain a business license: a completed application form and copies of passports of shareholders. Some free zones also require a business plan.
The license is issued together with the certificate of incorporation of the legal entity.
The validity period of the license is 1 year. After that, it must be renewed. The renewal fee is usually equal to 100% of the cost of the license at the time of registration.
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