August 2, 2024

How can you get a small business license in Dubai?

Setting up a small business in Dubai can be a good business opportunity, but passing and crossing all the legalities can be a difficult task. There were 557,000 small and medium-sized businesses in the United Arab Emirates as of mid-2022. SMEs account for as much as 63.5% of the GDP in sectors other than oil. It is estimated that by 2030, there will be one million SMEs in the United Arab Emirates. Understanding the process of obtaining a small business license in Dubai is important to ensure that your business operates legally and smoothly.

In this blog, we will guide you through the steps and requirements for obtaining a small business license in Dubai, helping you set up and run your business without a huddle.

About Small Business License Costs in Dubai

Obtaining a license is an essential need for all businesses, big or small. The approximate cost of a small business license ranges from AED 10,000 to AED 8,000, depending on several criteria.

The following three important factors increase the price of a small business license:

Nature of Business: There are mainly four main types of businesses for licensing; these include industrial licenses provided to manufacturing companies, professional licenses provided to companies providing professional services, commercial licenses provided to trading and commercial entities, and tourism licenses provided to travel and tour operators. The type of business is the major factor affecting the cost of small business licenses in Dubai.
The Business Setup: Mainland Company, Free Zone Company, or Offshore Business: A Free Zone company structure, a Mainland company, or even an offshore business may be more appropriate for certain business activities. This will have an effect on your license’s cost.
The Business’s Location: A license’s cost is also influenced by the business location, as renting an office will raise your license fees by certain percent. As per the Department of Economic Development’s laws, companies are required to pay certain percentage of their total rent as the license fee for doing business in Dubai. Therefore, it is essential to make sure you find a suitable space for your business with low rent.

Procedure for applying a small business license in Dubai

Imagine you are a designer and willing to open a small boutique in Dubai. Before you start your own shop, it is important to get a small business license in Dubai. To apply for a small business license, follow the below steps:

1. Choose a business structure.

Choosing your business structure is the first task you have to do to get a small business license in Dubai. For example:

If you are a single owner with complete control of your business, then you can choose sole proprietorship, which has minimal paperwork but offers limited liability protection.
If you have more than one partner who shares your company’s profits and losses, then choose a partnership company. However, regulations are more strict for this type when compared to a sole proprietorship.
If you are a foreign company willing to expand your business in Dubai, then choose the branch of a foreign company; however, this might require office space in the UAE.
Finally, if you have a minimum of two stakeholders, then choose a Limited Liability Company (LLC), which is the most popular choice.

2. Choose your business activities.

The Department of Economic Development (DED) or the relevant free zone authority provides a detailed list of business activities. You can choose the specific activities your business will provide or undergo. This is an important task, as it determines the type of license or permit your business needs.

3. Select a company name.

Select a unique and appropriate name that reflects your brand and resonates with your target audience. Remember, the name needs to comply with Dubai’s naming regulations and avoid violating existing trademarks. A quick online check can help ensure your chosen name is available.

4. Select your business location.

Dubai mainly offers two location options for business setup:

Firstly, the Mainland provides great flexibility, but on the other end, it involves more regulations and higher costs.
Secondly, Freezone offers benefits in the form of tax exemptions, and the procedures are simple to carry out. However, this has restrictions on business activities and ownership structures.

Carefully consider your business model and growth strategies when making this decision.

5. Get initial approval.

The next step involves getting the initial nod from the authorities, like DED for the mainland business entities or the concerned freezone authority for the entities in the freezone.

6. Keep the required documents ready.

It may be essential to get certain documents, such as those listed below. Make sure you have all the below documents ready before starting the application process. Do not hesitate to contact CDA for professional help if you have any questions or are having trouble with the application process. We can assist you in setting up your business without any hassle.

Proof of identity and address of shareholder and the director of the business
Copies of passports for directors and shareholders
A copy of the confirmation of the company name
Memorandum of Association (MOA) detailing the goals and structure of the company
Articles of Association (AOA) detailing the internal governance rules

1. Submit the application for the trading license. Submit to the DED or free zone authority a completed application form and the necessary supporting documentation. Make the necessary fee payments.

2. Get visa sponsorship: Apply to the immigration authorities for visa sponsorship if you need to obtain visas for yourself or your staff.

3. Open a bank account: After your license has been granted, register a corporate bank account to handle the finances of your company.

Dubai: Haven for small business

There are various advantages to starting a small business in Dubai. The entities can enjoy vast perks, get their businesses to the next level, and achieve their goals easily. Some of the major advantages are listed below:

Business-friendly legislation from the authorities is one of the advantages, which boosts the morale of the entities and hence helps them conduct their businesses freely.
Potential opportunities are variedly available for the business entities; there is vast scope for the business entities planning to start a business in Dubai. Entrepreneurs can start businesses in any sector without any complexities.
Utmost safety and security are the biggest perks that small businesses can enjoy in Dubai. Due to the stringent laws and vigilant authorities in Dubai, there are low crime rates, frauds, and malpractices; hence, small businesses can start their businesses without any further concern.
The UAE’s growth is yet another advantage that small businesses can enjoy. Due to its growth-oriented approach, businesses can get global attention and can approach foreign investors for any FDI.
Multiple choice of locations is another advantage that small businesses can enjoy, like mainland or freezones. The small businesses can select the location based on their target market, operation, cost, requirements, etc.
Tax advantages are another highlighted advantage of Dubai. The entities can enjoy multiple tax benefits, like tax exemptions, deductions, etc., based on their eligibility.

Conclusion

You can use the information above to obtain your small business license; however, you might not have the expertise to carry out all the tasks alone. This is where CDA steps in as your strategic partner to obtain your license smoothly and successfully. With great experience in the Emirati business landscape, CDA can guide you through the difficulties of license applications and legalities. Our team of experts handles the paperwork and application procedures, saving you valuable time and effort.

Don’t let the difficulty of getting a business license stop your business ideas. Contact CDA today.

Approach CDA for your small business license

Imagine a small business entity planning to start their business in Dubai, being new to the land and unaware of the regulations and processes to set up the business, along with having limited connections and finances in hand. It is a nightmare for most of the businesses in Dubai. Don’t worry, CDA is there to soothe your stress related to business setup in Dubai.

Small business entities can approach business set-up service providers like CDA and avail of cost-friendly business set-up services like getting business licenses approved by the authorities, getting the documents sorted, PRO services in Dubai, getting insights into tax and other business laws, getting investments and finances from banks and other potential institutions, etc. The team at CDA can get the small business afloat in the market without any further complexities. The small businesses don’t have to worry about any further consequences, as their processes will be handled by the professionals at CDA, the leading business set-up service provider in Dubai.