Types of business licenses and how to pick the right one

As the business hub of the MENA region, the UAE is every aspiring entrepreneur’s dream business location. Their business-friendly policies and ease of company formation are contributors that make the country a lucrative area filled with opportunities. The process of registering and starting your business is a simple one. Just by submitting a few documents and completing a couple of formalities, your dream business can begin operations within the country. A trade license is one of the most important documents that every business owner needs to have, mainly because it serves as a legal permit that allows an entrepreneur to conduct a select number of business activities within the UAE. For business setups in the country, a license is tantamount to proof that your business is valid and legal, and the lack of a license can result in heavy penalties. In this article, we explore the broad types of licenses you can acquire and how to choose the perfect fit for you so that you can begin your business journey successfully.

1. Trading License

A trading license is a license that permits its holder to start a business within the trading field, allowing the company to export, import, or trade in a variety of products. This license primarily focuses on all aspects related to general trading of goods, but with the advent and soaring popularity of online stores, the scope of the license has extended its reach to e-commerce operations.

2. Commercial License

This license is relevant for those ventures that deal with the purchase and sale of goods within the UAE. For those who wish to start an international business in the UAE, may do so with a commercial license. Commercial licenses have a multitude of subtypes that are specific to the exact sector your business deals with, including all matters relating to export and imports. Some of the commercial trade licenses you can acquire for your business are as follows:
– Gold and precious metals trading
– Used furniture trading
– Oil and gas trading
– Publications and media materials trading

3. Service License

A service license is a license issued to businesses that wish to operate service-oriented, professional activities. These activities include business services, consulting, artisan crafts, and other services. This type of license can also be issued to those individuals who have obtained the relevant qualifications and have the required expertise needed for a particular profession. Some of the most popular types of service licenses include the following:
A. Tourism
This license is issued to those individuals or businesses that provide services relating to the travel and tourism sector. This license has seen a boost in applications due to the recent tourism boom surging within the UAE due to Expo 2020. Some of the main categories under this license include:
– Inbound tour operator
– Outbound tour operator
– Travel agent

B: Craftsmanship License
A craftsmanship license is issued to individuals and companies that directly deal with services that require a great deal of physical strength or skills and abilities that require a level of expertise. Jobs that come under this category include electricians, blacksmiths, carpenters, and plumbers. This license allows companies in the field to be able to legally hire these craftsmen, though the craftsmen themselves are also required to have a license before they can be employed to work in this sector.

4. Publishing License

This type of license allows businesses to engage in publishing related activities that include both launching a new publication within the country and/or introducing an existing publication from abroad. The trade license you need to start this line of business must specify the activity ‘publishing’ in order to be able to be legally allowed to start operations under this activity.

5. Freelance Permit

Due to the pandemic, many of us have begun working remotely and expanding our virtual networks by freelancing our skill sets. A freelance permit is provided to those individuals who specialize in the field of media, technology, entertainment, and art so that they are legally allowed to provide their services in addition to any full-time jobs they may or may not have.

How to find your perfect fit?

Trade licenses define the scope of your venture’s business activity. If you have a business idea in mind, look into the broad range of activities the business would be involved in and shortlist the license list accordingly. Here at SPC Free Zone, we provide over 1,500 types of licensing activities to business and allow 5 activities to be combined across different sectors.

To understand more about which license is best suited for your business and how you can apply, contact our expert consultants at 800 SPC FZ today.

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