How to choose the right trade licence in Dubai

Every licence in the UAE is built from a list of approved business activities, and there are more than 2,000 of them. Each activity has a defined scope, belongs to a licence type and may carry conditions such as an approval from another authority. You do not pick a licence type from a menu. You pick the activities that describe your business, and the type follows.

So the useful preparation is a plain description of what you will actually do. Write down what you sell, who pays you, whether you hold stock, whether you import, and whether you work at the customer's site. Your consultant turns that into the activities the Department of Economy and Tourism has on its list.

Most mainland businesses in Dubai fall under one of four types. The wording of your activities decides which one applies, and the type in turn influences the legal form you can use and the approvals you need. Other types exist for narrower cases, such as agricultural and craft activities.

The licence type also affects the structure. The legal form has to match the activity: commercial and industrial activities are usually run through a limited liability company, while many professional activities can be held by a single owner or by partners who practise the profession. Full foreign ownership is available for most activities.

• Commercial licence: buying and selling goods, general trading, retail, e-commerce, contracting, restaurants and other businesses run as a trade.
• Professional licence: services delivered through a person's skill or qualification, such as consultancy, design, IT services, training and repair crafts.
• Industrial licence: manufacturing, processing, assembling and packaging, carried out from premises suited to production.
• Tourism licence: travel agencies, tour operators, hotels and similar hospitality businesses, regulated by the tourism side of the Department of Economy and Tourism.

A business can hold more than one activity, and most do. A trading company might list several product groups, and a consultancy might list management and marketing advice. As a rule the activities on one licence belong to the same licence type and to related groups, and the licensing authority decides which ones may sit together.

When two lines of business do not fit on one licence, the options are a second licence, a branch or a separate company. Activities can also be added or removed later through a licence amendment. Ask for the activities you need for the next year or two, and avoid padding the licence with ones you will not use, since each can bring its own conditions.

Some activities are only licensed after another authority has agreed. The approval usually comes after initial approval and before the licence is issued, though a few sectors such as legal, security and financial services need it earlier. It often brings its own requirements for premises, qualifications or equipment, so it shapes your budget and your timeline.

The full list is longer than this, and the authority can differ from one emirate to another. Your Caliph consultant confirms what applies to you before the application is filed, so the approval is planned from the start and not discovered halfway through.

• Food businesses: Dubai Municipality
• Clinics and healthcare: Dubai Health Authority
• Private schools and training institutes: Knowledge and Human Development Authority
• Transport and vehicle rental: Roads and Transport Authority
• Real estate brokerage: Real Estate Regulatory Agency
• Telecommunications: Telecommunications and Digital Government Regulatory Authority
• Banking, exchange, insurance and financial advice: Central Bank of the UAE or the Securities and Commodities Authority

The first is treating general trading as a licence for everything. It covers trade in a wide range of goods, but it does not cover services, and regulated goods still need their own approval. If you also consult, repair or install, those are separate activities that have to be on the licence.

The second is choosing by fee instead of by fit. An activity that is close but not right can leave you unable to sign the contract you set the company up for, or lead to fines for working outside the licence. The same wording is read by your bank, by immigration when job titles are approved and by customers who check the licence before they pay.

The third is copying the licence of a competitor. Their activities reflect their business and the rules on the date they applied. Yours should reflect what you will do, in the emirate or zone where you will do it. A free consultation with Caliph is the place to test your list before any fee is paid.

Before you apply, run your draft activity list through these five checks. If any answer is no or not sure, settle it with your consultant first, because changing an issued licence takes more effort than changing a draft, and some changes mean new approvals.

• Does every source of income you plan match an activity on the list?
• Do all the activities sit under one licence type?
• Does any activity need an external approval, and can you meet its conditions?
• Does the legal form suit the activity and the number of owners?
• Do the premises you plan to rent suit the activity?