Every business operating in the UAE needs a trade licence — but with three types, 40+ free zones, and hundreds of activity codes, knowing which one you need (and what it actually costs) is not as obvious as it should be.
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What is a UAE trade licence?
A UAE trade licence (also called a business licence) is the legal authorisation that allows a company to conduct commercial activity within the UAE. It is issued by:
- The Department of Economic Development (DED) of the relevant emirate — for mainland companies
- The relevant free zone authority — for free zone companies
- The relevant offshore authority — for offshore companies (more limited scope)
Without a valid trade licence, a business cannot legally operate, hire staff, open a corporate bank account, or sponsor residence visas.
The 3 main types of UAE trade licence
1. Commercial licence
A commercial licence covers buying and selling goods. This includes:
- Import and export
- Wholesale and retail trade
- General trading (broad activity coverage)
- E-commerce and online retail
- Real estate brokerage (mainland, with DED approval)
Commercial licences are the most common type. A general trading licence in particular is popular because it covers a wide range of product categories under a single licence.
2. Professional licence
A professional licence covers service-based and knowledge-work activities. This includes:
- Management consulting
- IT services and software development
- Marketing and advertising agencies
- Accounting and auditing firms
- Legal services
- Healthcare practitioners
- Architecture and engineering
- Educational institutions
In some emirates and for certain activities, a professional licence requires a local service agent (a UAE national registered as the company's local contact, for a fixed annual fee). This is distinct from a local equity partner — the service agent has no ownership stake.
3. Industrial licence
An industrial licence covers manufacturing, processing, and assembly activities. Requirements are more involved:
- Suitable premises (factory, workshop, industrial unit)
- Additional approvals from the Ministry of Industry and Advanced Technology
- Environmental approvals where relevant
- Specific activity codes for the type of manufacturing
Industrial licences are less commonly sought by new foreign entrants and more relevant to established manufacturers expanding into the UAE.
Free zone licences vs mainland licences
The same three types exist in both free zone and mainland contexts, but there are important practical differences:
| | Mainland licence | Free zone licence | |---|---|---| | Who issues it | DED (emirate level) | Free zone authority | | UAE market access | Unrestricted | Limited (see note) | | Foreign ownership | 100% for most activities | Always 100% | | Cost (indicative) | AED 15,000–35,000 | AED 10,000–25,000 | | Office requirement | Physical office (Ejari) | Flexi-desk permitted | | VAT / corporate tax | Yes, same rules | Yes, same rules |
Note on free zone market access: free zone companies can sell to UAE mainland customers, but they must use a mainland registered company or licensed distributor/agent for B2C sales, import-for-resale, and some regulated activities. For businesses primarily serving the UAE domestic market, a mainland licence is usually simpler.
UAE trade licence costs in 2025
Costs vary significantly by structure, activity, and jurisdiction. Here is a realistic range:
Free zone licences:
- Entry-level (1–3 activities, no visa): AED 10,000–18,000/year
- With 1 residence visa included: AED 16,000–25,000 all-in, year one
- Premium free zones (DMCC): AED 22,000–40,000+ year one
Mainland licences (Dubai DED):
- Professional licence, small office: AED 18,000–30,000 year one (including minimum office lease)
- Commercial licence, general trading: AED 20,000–40,000 year one
- Industrial licence: AED 30,000–70,000+ (heavily dependent on facility)
Hidden costs to watch for:
- Municipality fees (typically 5% of annual rent for mainland)
- Establishment card fees (~AED 1,500)
- Per-visa costs (AED 4,500–6,500 each)
- Activity approval fees for regulated sectors
- External approvals (DHA, KHDA, etc.)
A provider who gives you only the headline licence fee without itemising these costs is not giving you a full picture. CompanyForm quotes all government fees upfront in writing before you pay anything.
How to choose the right activity code
This is where most founders lose time. The UAE uses activity codes — a standardised classification system — to define exactly what your business is licensed to do. Getting this right matters for three reasons:
1. Banking: banks check that your declared activities match your actual business. Mismatches cause account opening problems. 2. Visa eligibility: some activities limit the number of visas you can sponsor. 3. Compliance: operating outside your licensed activities is a violation and can lead to fines.
Practical advice:
- Be specific but not narrow. "IT Consultancy" is different from "Software Development" is different from "IT Trading." Choose the codes that genuinely describe what you will do.
- Check the DED or free zone activity list before deciding on a structure — not every zone licenses every activity.
- Avoid over-bundling. Adding 10 activity codes "just in case" can raise fees and complicate bank account discussions.
- Regulated activities require extra approvals. Healthcare, financial services, education, and legal services each have a governing body whose sign-off you need before the licence issues.
Trade licence renewal
UAE trade licences are issued for one year and must be renewed annually. The renewal process:
1. Ensure your office lease (mainland) or registered address (free zone) is current — most renewal applications require a valid tenancy or flexi-desk agreement. 2. Submit the renewal application through the DED portal or free zone authority's online system. 3. Pay the renewal fee — typically similar to the year-one licence fee, minus registration charges. 4. Receive the renewed licence digitally.
Missing the renewal deadline results in fines (typically AED 250–1,000 per month for mainland licences) and can complicate visa renewals, bank account maintenance, and tender applications. Set a reminder 60 days before expiry.
Getting your trade licence
The fastest route to a correctly structured UAE trade licence is working with a formation agent who handles both the advisory work (which structure, which activity codes, which zone) and the paperwork.
Not sure which licence type you need? Message us on WhatsApp — tell us what your business does and where your customers are, and we'll confirm the right licence type and send a fixed-fee quote same day.
Written and fact-checked by CompanyForm's in-house formation specialists — the same team that files trade licences, arranges bank introductions, and handles tax and visas for founders setting up in the UAE.
About our team