The entrepreneur’s checklist is incredibly long. Especially when starting a business overseas for the first time.
When setting up in the UAE, one of the first big decisions entrepreneurs face is choosing the most appropriate licence.
There are several on offer in the Emirates. The one that is right for you will depend on the nature of your business. When it comes to choosing yours, the clue is usually in the name.
For example: those wishing to conduct professional services, such as consultancy, would need to apply for a professional services licence; those wishing to run an industrial firm, undertaking activities such as manufacturing, need an industrial licence; and those wishing to trade goods require a general trading licence.
It’s the latter that I’m going to talk about today.
A general trading licence allows companies to import goods including food, toys, car parts, clothes and electronics into the UAE. These goods can then be sold within the UAE or exported to foreign markets.
The major benefit to a UAE general trading licence is that you don’t have to specify the goods you intend to trade. This leaves you free to import, export and trade any number of goods under a single licence.
The major benefit to a UAE general trading licence is that you don’t have to specify the goods you intend to trade.
Why apply for a UAE general trading licence?
There are many great reasons to apply for a general trading licence in the UAE – not least the fast and straightforward application process.
The easiest way to apply for a general trading licence is direct with the Department of Economic Development or Municipality for your chosen Emirate. This can usually be done online in just a couple of hours.
You’ll also need to decide where to locate your business. The beauty of the UAE general trading licence is that it is possible to set up anywhere in the UAE. Simply find a location you like and lease office space that meet your requirements.
All in all, the barriers to setting up on the UAE mainland with a general trading licence are extremely low. Start-up costs are minimal, there is no need for upfront share capital, and there’s no requirement to undergo a yearly audit.
Another major reason behind the popularity of the UAE general trading licence is that it caters for businesses both large and small, and allows entrepreneurs to start small and grow over time.
If you wish to establish your business as the sole shareholder, you can. Equally, if you wish to start with multiple shareholders, you have that option too.
The same is true of employees. If you wish, you can establish your business as a solo entrepreneur, applying for only one visa. As your business grows, you can then apply for more visas for your employees.
The maximum number of visas you can apply for will depend on the size of your business premises. Holding a UAE general trading licence also allows you to sponsor dependant family and domestic staff for their UAE residency visas too.
How to apply for a UAE general trading licence
Ready to make your application for a UAE general trading licence? Here’s how:
Step one: Find a local sponsor
Any foreign entrepreneur looking to establish a UAE mainland business requires a local sponsor. The local sponsor must be an Emirati national and will hold a 51% stake in your business. Don’t let this put you off, however. In most cases, you are able to keep 100% of your profits. Local sponsors are usually paid an annual fee for their services, and have no say in the running of your business. A business formation specialist can help you find an appropriate sponsor, or act as your corporate sponsor in some cases.
The local sponsor must be an Emirati national and will hold a 51% stake in your business. Don’t let this put you off, however. In most cases, you are able to keep 100% of your profits.
Step two: Choose a business activity
There are thousands of permitted business activities in the UAE. The one that’s right for you will depend on the nature of your business. Once again, a company formation specialist can help you to choose the most appropriate activity for your business.
Step three: Find the right space
With your application underway you can set about finding appropriate office or warehouse space. There is plenty on offer right across the UAE, from single-unit offices to sprawling warehouses.
Step four: Apply for your licence
You can make your application to the Department of Economic Development or Municipality for your chosen Emirate. As well as your application you also need to submit a Memorandum of Association (MOA) and copies of your passport.
Step five: Visas and bank account
You will be notified as soon as your licence application has been successful. With your licence in hand you can now apply for visas for you and your dependants. You will also be able to approach financial institutions in the UAE to open your corporate bank account.
Applying for your UAE general trading licence
The above steps are only straightforward when undertaken correctly.
As applying for a UAE general trading licence is such a careful process – with errors potentially leading to lengthy delays – it is advisable to work with a business formation specialist who can manage your application for you.
Such a specialist can liaise with all relevant authorities on your behalf, including immigration, to ensure that both your licence and visa applications are accurate and completed in a timely manner.