Incorporating a company: Licensing & Registration

You will find here the most frequently asked questions about incorporating a company in Dubai concerning Licensing & Registration.

Issuing

1. Is it possible to establish a limited liability company for the carrying out of several professional activities?

No, limited liability companies are solely confined to conducting trading and industrial activities; whereas civil business companies are established for the purpose of practicing professional activities.

2. What are the requirements for obtaining a trade license?

Prior to operating any business in Dubai, it is first necessary to follow the steps outlined below in order to meet the legal requirements of all concerned government authorities and to guarantee maximum commercial benefit for the business owner.

  • Designate the category/categories (commercial, industrial and/or professional) which the business falls into, and the type of business activity/activities to be conducted.
  • Determine all the related business activities that can be included within each business license, subject to a maximum of ten activities per license.
  • Make a decision as to your business' appropriate legal status, taking into consideration the nature of the desired business activity/activities and the number and nationalities of the business' owners.
  • Establish that all the requirements and conditions of the desired license have been fully understood.
  • Select an appropriate trading name for the business.
  • Submit an application to the Department for initial approval either by a personal visit to the Department's offices or alternatively through the Internet, a document clearing service or a legal consultant's office.
  • Register a trade name (after receiving initial approval) either by a personal visit to the Department's offices or alternatively through the Internet, a document clearing service or a legal consultant's office. (If you have previously reserved a trade name, you may proceed to register it as being initially approved by use of the record number.)
  • Lease business premises (it is recommended that you contact the counter of the Planning Department of Dubai Municipality on Telephone Number 04 2020105 or on Dubai Municipality's Telephone Number 04 2063788 prior to leasing any premises in order to verify that they are suitable for business purposes.) Thereafter, you may visit the aforementioned Department's counter on the ground floor of the Municipality building in order to obtain approval for such leasing.
  • Prepare all required documents; such as memoranda of association and approvals from other relevant government authorities which may be necessary to each case. For example, to carry on the business of media activities, notification of approval must be received from the Ministry of Information and Culture. Such documents may be dispatched via e-mail, provided that the required fees have been settled directly through the Internet.
  • Submit a further application to the Department to obtain the final license.
  • Pay the required fees and collect your license.

3. What are the requirements for obtaining a trade license via the government website?

Identical requirements to those necessary to obtain a trade license in the ordinary way are needed.

4. Which type of license requires the aid of a local service agent?

All licenses for carrying on professional activities, whether sought by sole establishments or companies which are not owned or subscribed to by a United Arab Emirates national, require the participation of a local service agent except in the circumstances which will be dealt with below in question number 14.

5. For how long will an initial notice of approval remain valid?

An initial notice of approval will be valid for a period of 6 months from the date of issue, and it may, if necessary, be renewed ten days prior to the date of expiry.

6. Is it possible to amend the type of activity or trade name for which an initial approval has been granted?

Yes, an amendment is possible subject to a further payment of an approval fee.

7. In an envisaged scenario necessitating the granting of external approval for any suspended activity, would it be possible to obtain the Department's approval for issuing a license for such activity?

Yes, approval for such a license can be granted.

8. What are the requirements for a bank's certificate dealing with the deposit of capital?

A certificate must be issued using the official letterhead of one of the established banks operating in the Emirate, in the name of the establishment or company which is in the process of being set up.

9. What are the requirements for appointing an auditor for a limited liability company?

An auditor must hold a valid license allowing him to operate as such in the Emirate of Dubai, and a valid certificate issued by the Ministry of Economy & Commerce.

10. After obtaining an initial approval, do I have the right to proceed to carry on business in the relevant activity?

No, the purpose of such an approval is simply to ensure that the Department does not object to the carrying on of the activity in question, and to permit the formalisation of the other documents required to issue a final license.

11. Can my minor son, who is under 21 years of age, become my partner in a limited liability company?

Yes.

12. Is it necessary to lease premises to operate an activity, or is it possible to carry on such activity from residential accommodation? Are there any specific requirements or conditions governing the premises such as space or location?

Yes, leasing an office/shop is one of the most important requirements for obtaining a license for any activity. There are some special conditions governing the space for some activities, such as a supermarket or department store. A location should be deemed to be suitable for a certain activity, and this can be arranged in co-ordination with the Planning Department of Dubai Municipality.

13. What are the duties and obligations of a local service agent in the matter of a professional license, or the local sponsor of a foreign company's branch?

An agent's duties and obligations toward another party are confined to facilitating the practice of an activity in the Emirate, such as assisting in the obtaining and renewal of a license, and the obtaining and renewal of the appropriate work permits issued by the Ministry of Labour and Social Affairs, and other government authorities.

14. What is the scope of professional licenses which do not require a local service agent or local sponsor in respect of licenses held by individuals/companies who/which are not nationals of Gulf Cooperation Council Countries (GCCC)?

  • Engineering consultancy
  • Legal consultancy
  • Bank representation office

15. As a physician who is not a GCCC national, do I have the right to apply for a license for a sole establishment to operate as a "clinic", and to appoint a local service agent for this purpose, or to establish a civil business company in partnership with a United Arab Emirates national?

Only a GCCC national can obtain a license for a sole establishment to operate as a clinic, and only a GCCC national can establish a civil business company to operate such an activity. As a physician of another nationality, your legal status as set out in the license would only be that of physician in charge, rather than sole proprietor.

16. Can a Jebel Ali free zone establishment open a branch in the Emirate of Dubai?

A free zone establishment may only open a representative office in the Emirate. The functions of such an office would be restricted to promoting a company's products, services or business, or to facilitating trading contracts between a company and its clients. Such an office would not be allowed to operate any commercial business or to conclude any commercial deals on its own initiative.

17. Can the branch of a foreign company trading in Jebel Ali Free Zone open a branch in the Emirate of Dubai?

A branch existing in the Free Zone may only obtain a license for a representative office in the Emirate of Dubai. In order to open a new operational branch it would be incumbent upon the parent company in the country of origin to submit an application for a trade license. Thus any new branch would emanate directly from the parent company and not from the branch existing in the Free Zone.

18. What is the minimum number of partners in a private shareholding company?

Pursuant to Article (215) of the Federal Law No. 8 of 1984, founders of a private shareholding company shall amount to less than three persons.

19. What is the maximum number of activities which can be included in one single license?

A license can include a maximum number of ten activities; on the proviso however that they are all homogenous. For example: trading in ready made garments, footwear, children's toys, cosmetics and imitation jewelry, etc.

20. What is the minimum capital required for establishing a limited liability company, and what sort of evidence is necessary to show the existence of the required capital?

Amongst the main requirements for establishing a limited liability company is the submission of a certificate issued by one of the banks operating in the Emirate verifying the deposit of an amount specific to the capital required for the carrying on of the desired activity. The table below shows the amount of capital required according to the nature of the proposed activity:

Activity Capital

  • general trading AED 3 (three) million
  • building contracts AED 1 (one) million
  • other activities AED 300,000

21. What is the minimum capital required for establishing an individual establishment?

Most of these types of business activity do not formally necessitate the deposit of a minimum amount of capital, except for those given below:

Activity Capital

  • general trading AED 3 (three) million
  • building contracts AED 1 (one) million

A certificate issued by one of the banks operating in Emirate must be submitted verifying the deposit of the required capital.

22. Is it necessary to be a resident of the United Arab Emirates in order to become the legal owner of a sole establishment or a partner in a license?

A proprietor of an individual trading establishment, who is a GCCC national, or a partner in a commercial company, who holds any other nationality, shall not be required to be a resident of the United Arab Emirates. However the proprietor of a professional sole establishment would be required to carry on the activity in person, and this may only be achieved by residing in the United Arab Emirates.

23. What would be the requirements for opening a branch of a limited liability company existing in another emirate with a capital of AED 150,000?

The company would first have to increase the capital of the head office in order to conform at least to the minimum capital required in the Emirate of Dubai (please vide Question no. 20 above). Submission of a copy of the Commercial Register would be required as proof, along with the production of the following documents:

  • Board of Directors’ decision to open a branch office and authorize a manager-in-charge.
  • A copy of the parent company's license.
  • Copies of all partners' passports, and of national registration cards of partners who are United Arab Emirates nationals.
  • Approval from the respective government authorities in respect of the proposed activities.
  • A copy of the lease of the business premises from which the activity will be conducted.

24. Is it possible to open a branch for an establishment existing in another Emirate?

A branch may not be opened for an establishment but only for other commercial companies.

25. Can a non-UAE national obtain a license without a partner or local service agent who is a UAE national?

No, all trade licenses require a UAE national partner whose shareholding shall not amount to less than 51% of the company's capital. However, in the case of professional licenses a UAE national can either be a partner or a local service agent.

26. How many licenses can be issued for the same premises?

More than one license can be issued for the same premises, provided that the requirements of the Department's commercial Inspection Section and of Dubai Municipality's Planning Department have been fulfilled.

27. Can a GCCC national obtain an individual trade license?

Yes; however there are some activities restricted to UAE nationals only, such as land transportation.

Renewal

1- What are the requirements for renewing a trade license?

  • The trade license or a copy thereof; Photocopy of tenancy contract
  • Details of employees’ accommodation (only for those licenses which include non-local partners)
  • Approval, if necessary, from the respective government authorities pertaining to the activity.

2- What are the requirements for renewing a trade license by means of the government website?

The same requirements for renewing a trade license in the ordinary way apply to renewing a trade license via the government website; however, a special license password is needed in order to log on. This license password can be acquired by calling this number: 04-....

3- What is the period of the license's validity?

The minimum period for a license's validity is one year from the date of issue, and it is renewable. A license may be issued or renewed for a longer period of time which shall not exceed four years.

Modification

1- Can a limited liability company be altered to the status of a sole establishment?

No, it may not be changed.

2- Can a professional activity be integrated with a trading activity in the same license?

Yes, but only in certain specific cases such as computer systems design businesses and computer trading.

3- What are the requirements for the assignment of such a license?

A. Documents required for initial approval of the amendment :

1 .Original License

2. Typed Registration & Licensing Application Form.

3. Photocopy of the investor’s passport & UAE naturalization identification (for those without any previous licenses).

B. Documents required for final amendment to the license:

  1. All documents mentioned in Section A above
  2. Sale Contract duly authenticated by the Notary Public.
  3. The Contract of Appointment of Local Service Agent duly authenticated by the Notary Public (for professional licenses of non GCC nationals only):
  4. Approval, if necessary, of the respective government authorities pertaining to the activity.

Trade Names

1- Is it necessary to register a trade name in order to apply for an initial approval?

No; a trade name may be booked for a one year renewable period, upon payment of the appropriate fee.

2- How long can a trade name be maintained?

It can be maintained for a period of one year, which is renewable.

3- In the case where there is a trade name registered in another Emirate, is it possible to maintain or use the same name in the Emirate of Dubai?

If the trade name has not been registered with the Ministry of Economy and Commerce, it may be used in the Emirate of Dubai.

4- Can a trade name be maintained after a license's cancellation?

Yes; but only upon payment of an AED 200 (two hundred Dirhams) fee in consideration of reserving the name for a period of one year.

Fees

1- What is the fee demanded for maintaining a trade name?

The fee for the maintenance of a trade name is AED 200 only for one year.

2- What is the method of payment of fees due for a license renewal for a period of more than one year?

Fees may be paid using several methods, namely:

  • in cash and lump sum.
  • in one cheque covering the total amount of fees charged.
  • in a number of cheques equal to the number of renewal years, provided that the first cheque shall be immediately payable, and the remaining cheques shall be post-dated and correspond to each year's renewal date.

3- What are the fines levied on a delay in renewal of a license?

A fine of AED 200 (two hundred Dirhams) shall be levied against each month of delay.

4- What is the initial approval fee?

It is AED100 only.

5- What is the fee payable in respect of cancellation certificates for commercial companies?

In the first instance, a fee of AED 2000 is payable in respect of two certificates.

Secondly, a fee of AED 2000 is payable in respect of the cancellation of registration.

6- Are cancellation fees to be paid in a lump sum?

No; an initial sum of AED 2000 (two thousand Dirhams), representing fees for the certificates is to be paid, and a subsequent amount of AED 2000 ( being the cancellation of registration fee) and any additional fees (according to the expiry date) shall be paid thereafter.

7- Does the fee relating to the certificates constitute the total amount payable in order to obtain cancellation?

No; there remain cancellation fees which are calculated according to a license's expiry date.

Cancellation

1- Do cancellation procedures for an operational company differ from those for a company which has not yet commenced activities?

The procedures involved in the cancellation of a company's registration are the same; whether a company carried on business activities or not.

2- What would be the solution adopted in the case of absence of one of the license's partners for the purpose of signing a cancellation contract?

In this case the matter would be referred to Dubai Court, which would arbitrate the cancellation decision and appoint a liquidator.

3- Is it possible to appoint a liquidator licensed in another Emirate?

No, a liquidator must be licensed in the Emirate of Dubai.

4- Can a general meeting's minutes concerning the cancellation be attested in another Emirate?

Yes.

5- What are the relevant documents which must be presented by a liquidator?

Copies of the professional license, the registration certificate issued by the Ministry of Economy & Commerce, and a notarized signature.

6- Is it possible to appoint a liquidator whose license and registration certificate issued by the Ministry have been allowed to expire?

No, the license and registration certificate must be valid, or a document must be presented to show that they are in the process of renewal.

7- What will the situation be should one of the partners not sign the Department's application form for cancellation?

If the minutes of the relevant meeting have been signed and notarized it will not be necessary to sign the Department's application form.

8- For how long must a notice be published in the official newspapers?

The notice should be published for one day, with a waiting period of 45 days.

9- Which party is to publish the notice; the Department or the company?

Neither; the notice must be published in a local Arabic language newspaper such as “Al Ittihad” or “Al Bayan”.

11- What are the procedures involved in cancellation of the various types of establishment?

The Department’s application form for cancellation must be signed; and the license turned over to it, together with a letter issued by the Ministry of Labor upon cancellation as well as a letter confirming the vacating of the office or shop premises.

12- What are the procedures involved in cancellation of the branch of a foreign company, whether registered or not registered with the Ministry of Economy & Commerce?

If the branch is registered, letters of cancellation prepared by the Ministry of Economy and Commerce, the parent company and the Ministry of Labor & Social Affairs must be submitted.

If it has not been registered, then a copy of the resolution signed by the parent company’s Board of Directors must be submitted, together with an appropriately worded letter to the Ministry of Labor & Social Affairs.

13- Does this regulation apply to a Gulf company?

Yes

14- What are the procedures involved in cancellation of a company's branch existing in another Emirate?

The same procedures pertaining to the cancellation of establishments shall apply, whether it existed in another Emirate or the same Emirate.

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