If you want to start a business in Dubai, you need to acquire a valid Dubai Trade License. The general trade permit is normally issued within 5 working days after the submission of the application. Another major benefit of the Dubai trade permit is that it allows the establishment of international non-business organizations (NPOs). Simply put, foreign investors wishing to set up international holding businesses in Dubai can get a free business permit for that purpose.
However, before you apply for either of these permits, there are certain prerequisites that you must fulfill. These include: being a fully-fledged citizen of the country that has granted you the said tourist visa; having active citizenship of the country that granted you the said tourist visa; and having a fixed address in Dubai which is a fixed door and not an allowance. It should be noted that business licenses in Dubai do not include investment or trading rights. Thus, if you wish to hold title to a property as a security for the loan amount you acquired through the grantor's business license, you may not be able to use the property as collateral.
Applying for a Dubai business permit does not take a lot of time. Once you have met the aforementioned requirements, you will be directed to the registration and licensing department. Upon receipt of your application, the ministry will issue you a business document that will serve as your official business license. A good thing about this is that most companies issuing travel or vacation related business documents require the assistance of the UAE ministry of foreign affairs.
Now, on to the advantages of obtaining a Dubai trade license and a Dubai non-resident business visa. For companies planning to set up an office in Dubai, acquiring both is a great idea. For one thing, it helps them to lessen the amount of paperwork involved in the application process. In addition to that, by getting both types of permits at the same time, companies can save on costs. Here are some of the benefits you stand to enjoy with both types of permits:
- UAE authorities do not require a company to have a Dubai trade license or a Dubai non-resident visa when conducting business activities in the emirate. However, companies still need to comply with the local laws of the area they are working in. Companies also need to provide proof of registration and records of their previous and present accounts. This requirement is often perceived as an attempt by authorities to tighten the no-fault settlement system in the country. However, this merely reflects an effort to make the process easier for businesses, which means it would eventually result in legal procedures that are more convenient for all parties involved.
- A Dubai national who has obtained a Dubai trade license may be eligible for receiving certain types of government subsidies. For instance, they may be eligible to receive a freehold purchase or a percentage share in an initial public offering (IPO) of a company. Holding companies are allowed to manage their own funds, invest on their own or issue their own stock in the Dubai stock exchange. Holding companies also have the option to buy back their own stock at a fixed price from the public, which allows them to benefit from a lower tax burden.
- Holding companies can expand their business activities in Dubai by obtaining a UAE national commercial activities license (CADP). A CADP gives permission for an individual or a company to conduct business in Dubai provided it meets certain conditions such as having at least one office in the city and has its owner personally signed the company's articles. Holders of a CADP do not need to disclose their private information in any way. A few companies also choose to apply for a Dubai commercial activities license (DBA) instead.
- Dubai's national general trading license or DCTP allows individuals or companies to operate in the city by entering into trading agreements with the Dubai Food and Customs administration and the Dubai Industrial Corporation. A DCTP lets you trade in the currency of the country that is on your Dubai trade license and allows you to sell and import goods in the currency that is on your personal consumption. If your business will allow you to do so, then you may consider this option. However, this option cannot be used if you intend to use your business as a vehicle for carrying out commercial activities such as money laundering. You must use a valid UAE address to register your business, and you must ensure that all the employees of your business have their own passport.