A trade licence is the legal permit that allows a business to operate in Dubai, and without one you cannot legally trade, invoice clients, open a corporate bank account or sponsor staff. Every company in the emirate — whether it is a one-person consultancy or a large trading firm — needs a licence that matches its actual activities, issued either by Dubai’s Department of Economy and Tourism (DET) for mainland businesses or by a free zone authority for companies based inside a free zone.
What a Trade Licence Actually Covers
The licence names your company, its legal form, its owners and the specific business activities it may carry out. Activities are grouped into three broad licence types: commercial licences for trading and buying and selling goods, professional licences for services and consultancy work, and industrial licences for manufacturing. Choosing the right activities matters, because practising an activity that is not on your licence can lead to fines, and some activities — such as healthcare, education or food trading — need extra approvals from the relevant authority before the licence is issued.
Mainland licences now generally allow full foreign ownership for most activities, which removed the old requirement for a local partner in many sectors. Free zone licences restrict you to operating within the free zone and internationally unless you work through a local distributor or open a mainland branch, so think carefully about where your customers are before you choose.
Who Pays for the Licence
The business owner pays. If you are setting up your own company, the licence fees, office or flexi-desk costs and any visa packages are your responsibility. If you are an employee, you never pay for your employer’s trade licence, and a legitimate employer will also cover your work permit and visa costs — being asked to pay for your own employment visa is a warning sign. Shareholders in a multi-owner company usually split setup costs in proportion to their shares, and this should be written into the memorandum of association.
- The company owner or shareholders pay licence and renewal fees
- Employees never pay for the employer’s licence or their own work visa
- Free zone packages often bundle licence, desk space and visa quotas
- Government fees are paid through official channels and come with receipts
How Much It Typically Costs
Costs vary widely depending on the jurisdiction, activities and number of visas. As a guide, a mainland professional licence typically starts around AED 10,000 to AED 15,000 a year including basic fees, while free zone packages can start from roughly AED 5,500 for a no-visa licence and rise to AED 20,000 or more with visa allocations and office space. These figures are estimates only and change over time — always check the official DET portal or the free zone’s own fee schedule for current prices before committing.
Remember the licence is an annual cost. Renewal is usually slightly cheaper than first-year setup if nothing changes, but late renewal brings penalties and eventually blocks visa transactions. Budget also for the establishment card, chamber of commerce fees where applicable, and the cost of your registered address.
How to Apply, Step by Step
- Choose your activities and decide between mainland and free zone
- Reserve a trade name that follows UAE naming rules
- Obtain initial approval from DET or the free zone authority
- Prepare the memorandum of association and tenancy contract (Ejari) if required
- Submit documents, pay the fees and collect your licence
- Open a corporate bank account and register for corporate tax and VAT if applicable
Keeping the Licence Valid
Renew on time each year, keep your tenancy contract valid, and update the licence whenever shareholders, activities or your address change. Operating with an expired licence can freeze your bank account and immigration file, so set a reminder at least a month before the expiry date. If you close the business, cancel the licence formally rather than letting it lapse, to avoid accumulating fines.
External Approvals and Special Cases
Some businesses need a second layer of permission on top of the licence itself. Restaurants need food safety clearance, clinics need health authority licensing for each practitioner, nurseries and schools answer to education regulators, and financial or legal services sit under their own supervisors. These approvals add time and cost to setup, and they must be renewed alongside the licence. If your activity list touches a regulated field, ask DET or the free zone at the very start which external approvals apply, so nothing surprises you after you have signed a lease or hired staff.
FAQ
Can I run two different businesses on one licence?
Only if both activities are listed on the licence and are compatible. You can usually add activities for a fee, but unrelated regulated activities may need separate approvals.
How long does a trade licence take to issue?
Straightforward free zone licences can be issued within a few days, while mainland licences with external approvals may take one to three weeks.
Do I need an office to get a licence?
Mainland companies generally need a registered tenancy, while many free zones offer flexi-desk or virtual packages that satisfy the requirement at lower cost.
For more practical guides to setting up and living in the emirate, visit DXB Talk and browse our Dubai section for the latest explainers.
