Dubai has become one of the key business locations in the world. In recent years, Dubai has witnessed a tremendous amount of growth in the business and financial sector. Industries such as trade and logistics have also shown remarkable development. Thus, commencing trading companies in Dubai is a beneficial investment.

If you are thinking of starting a trading company in this Middle-Eastern city and wondering how and where to begin, we have made things easier for you. Here is how you can obtain a commercial trade license in Dubai.

• Develop A Business Plan

Firstly, you need to develop a plan before commencing trading business in Dubai. A great business plan should consist of factors like:

• Market condition
• Competitions
• Office space requirement 
• Products and services
• Initial investment
• Marketing strategies
• Investors and financing

These above-mentioned factors can help determine the workings of your business. Thus, it is better that you thoroughly study these factors and create an informed business plan.

• Select the Right Jurisdiction for You

Dubai’s market can be classified into three jurisdictions – mainland, free zones, and offshore. In Dubai, there are currently 48 free zones. Free zone provides 100% ownership to the investors and 100% exemption on corporate and personal income.

On the mainland, you need to work with a sponsor for setting up a company. An offshore company is a legal business entity that operates outside its registered jurisdiction.

Opt for the jurisdiction according to your company’s needs.

• Look For a Sponsor

Many investors prefer to commence their business in Dubai mainland because there is more exposure to the customers, trading with other companies in Dubai, and no restriction on issuing of work visas.

When setting up your company in Dubai mainland, look for a sponsor for your business. The UAE national will hold 51% of shares in your company.

There are two types of sponsorship; corporate sponsorship and local sponsorship. Although a local sponsor will hold 51% of shares in your business, a corporate sponsor will grant you 100% ownership through an investor’s right protection contract.

• Legal Formalities

If your business trades, imports, or exports, it will require a trading license. Acquiring a trading license for your business is essential as it makes your company legal. Steps to get a trading license are as follow:

• Select a trading name for your company
• Plan your business activities
• Apply for initial approval from DED
• Prepare Memorandum of Association (MOA)
• Select a business location and get a tenancy contract
• Submit the application to the DED

The Bottom Line

Trade licenses in Dubai are critical for the existence of business, which is why many investors hire company formation consultancy services. Outsourcing these activities has become a common trend as it will all be achieved with the utmost care and in time without staking the company’s future.