What is a Commercial License in Dubai? Everything You Need to Know

19 Apr 2025

By Vista Corp

Dubai has become one of the top destinations for entrepreneurs, investors, and global corporations. Its strategic location, 0% personal income tax, and investor-friendly laws make it a magnet for new business ventures. But before you jump in, there’s one important requirement you must understand—getting the right business license, particularly a commercial license in Dubai. A commercial license is more than just a legal formality—it’s the foundation of your business operations. Whether you want to import and export goods, sell products online, open a retail store, or operate a trading company, this license allows you to legally carry out commercial activities in the UAE.

Most businesses that are involved in buying and selling goods, whether locally or internationally, are required to obtain this license. It’s regulated by the Department of Economy and Tourism (DET), previously known as the Department of Economic Development (DED) in Dubai, and is one of the most commonly issued licenses in the city. In this guide, we’ll break down everything you need to know about the commercial license in Dubai—from what it is, how much it costs, the documents required, the difference between trade and commercial licenses, to how you can apply and run your business smoothly in 2025.

Whether you’re a startup founder, an investor, or someone simply exploring opportunities in the UAE, this guide will answer all your questions in one place—simple, clear, and up-to-date.

Understanding the Commercial License in Dubai

A commercial license in Dubai is an official permit issued by the government that allows individuals or companies to conduct commercial activities—primarily involving the buying and selling of goods and services. Whether you’re trading electronics, building materials, fashion, or running an eCommerce business, this license is essential to legally operate in the UAE. It is one of the three main types of business licenses in Dubai, the others being the professional license (for service-based businesses) and industrial license (for manufacturing and production). The commercial license, however, is the most popular among entrepreneurs looking to enter the trading sector. The beauty of this license is its flexibility. You can include multiple commercial activities under a single license, provided they fall under the permitted categories. For example, a business could be importing electronics, distributing furniture, and selling through a physical retail outlet—all under one commercial license.

A commercial license is commonly used for:

• General trading companies
  
• Import-export businesses
  
• Online retail (eCommerce)
  
• Real estate brokerage (with approvals)
  
• Automobile trading
  
• Building material suppliers
  
• Supermarkets and grocery stores
  

Trade License vs. Commercial License in Dubai: What’s the Difference?

One of the most common sources of confusion for entrepreneurs is the difference between a trade license and a commercial license in Dubai. While the terms are often used interchangeably, they do have nuances worth understanding—especially when choosing the right license for your business.

✅ Trade License – The Umbrella Term

A trade license is a broader term that generally refers to any license that allows a company to trade goods or services in Dubai. It’s issued by the Department of Economy and Tourism (DET) for mainland businesses and by relevant Free Zone Authorities for free zone entities. So technically, a commercial license is a type of trade license—specifically one that permits commercial activities like buying, selling, importing, exporting, and distributing goods.

✅ Commercial License – A Type of Trade License

A commercial license is categorized under the trade license umbrella. It focuses specifically on businesses involved in:

• Wholesale or retail trade
  
• Logistics and distribution
  
• Real estate brokerage (with approvals)
  
• E-commerce trading
  
• Car dealership or spare parts trading
  

Comparison Table: Trade License vs. Commercial License vs. Professional License

Types of Business Licenses in the UAE

Before applying for a license, it’s essential to understand the three primary types of business licenses in the UAE. This classification helps business owners choose the correct license based on the nature of their activity—be it trade, services, or manufacturing.

✅ 1. Commercial License

As explained earlier, a commercial license is issued for businesses involved in trading goods and products. It covers:

• Import and export
  
• Retail and wholesale
  
• eCommerce and dropshipping
  
• Real estate brokerage (with approvals)
  

This license is ideal for:

• Entrepreneurs looking to trade physical goods
  
• Startups with product-based models
  
• Retailers and wholesalers
  

✅ 2. Professional License

This license is issued for businesses that offer services or consultancy rather than physical goods. It allows 100% foreign ownership even in mainland Dubai (subject to certain conditions).

Examples of activities under this license:

• Marketing consultancy
  
• IT services
  
• Education and training
  
• Design services
  
• Freelancing (creative, technical, etc.)
  

Perfect for:

• Solopreneurs
  
• Freelancers and consultants
  
• Service-based startups
  

✅ 3. Industrial License

If your business involves manufacturing, processing, or industrial production, then this license is for you. It’s required for:

• Factories
  
• Food processing units
  
• Textile production
  
• Packaging and assembly plants
  

Issued with approval from:

• Ministry of Industry and Advanced Technology
  
• Local municipality for industrial land and permits
  

Bonus: Special Licenses

Dubai also offers niche licenses for specific industries:

• Tourism License – for travel agencies, tour operators, and hotels
  
• Media License – for media production and publishing companies
  
• Freelance Permits – available in various free zones for solo professionals
  

Each license type comes with its own set of rules, requirements, and jurisdictional limitations.

How to Get a Commercial License in Dubai: Step-by-Step Guide

Setting up a business in Dubai may sound overwhelming, but with the right guidance, the process is straightforward. Here’s a clear, step-by-step breakdown of how to get a commercial license in Dubai, whether you’re going for a mainland setup or a free zone one.

✅ Step 1: Choose Your Business Activity

Start by identifying the exact commercial activity you want to undertake. Dubai allows thousands of approved activities, from trading electronics to fashion goods or food items. You can even select multiple activities under a single license, as long as they’re related.

✅ Step 2: Decide the Jurisdiction

Dubai offers three main jurisdictions:

• Mainland – Operate anywhere in the UAE, including the local market
  
• Free Zone – Operate within the zone or internationally
  
• Offshore – Primarily for international operations and holding companies
  

Your choice affects office requirements, ownership structure, and the scope of business operations.

✅ Step 3: Reserve a Trade Name

Pick a unique business name that complies with UAE’s naming rules. Avoid religious or political references. The name must reflect the nature of the business if it’s a personal brand (e.g., “Ali Trading LLC”).

✅ Step 4: Apply for Initial Approval

This is a no-objection certificate from the Dubai Economic Department (or relevant authority in the free zone), allowing you to proceed with setting up your company. No commercial activity can begin at this stage.

✅ Step 5: Draft the Memorandum of Association (MoA)

The MoA outlines the company structure, ownership, profit-sharing, and responsibilities of each partner. For mainland companies, this document is legally notarized.

✅ Step 6: Secure Office Space or Flexi-Desk

You must lease a physical office or a Flexi-desk (shared workspace) depending on the jurisdiction. Free zones often offer smart desk or virtual options. The tenancy contract must be registered via Ejari (for mainland).

✅ Step 7: Submit Documents & Pay Fees

Submit all paperwork, pay the license fee, and collect your commercial license. The entire process can take 3 to 10 working days, depending on the complexity and approvals needed.

Required Documents for a Commercial License in Dubai:

• Passport copies of all shareholders
  
• Entry stamp or residence visa (if applicable)
  
• Passport-size photos
  
• Trade name reservation certificate
  
• Initial approval certificate
  
• Memorandum of Association (notarized)
  
• Lease agreement (Ejari or flexi-desk contract)

Commercial License Cost in Dubai (2025 Update)

One of the most crucial factors entrepreneurs consider before setting up a business is the cost of a commercial license in Dubai. The price can vary significantly depending on several factors, including your chosen jurisdiction (mainland or free zone), the number of visa allocations, business activities, and whether you need office space.

Average Commercial License Cost in Dubai

Cost Breakdown: What’s Included

• Trade Name Reservation – AED 620–700
  
• Initial Approval – AED 120–200
  
• License Issuance – AED 10,000–15,000
  
• Local Service Agent Fee (if required) – AED 5,000–8,000
  
• Ejari Registration (Mainland) – AED 2,000+
  
• Visa Quota Activation – AED 2,000–3,000
  

Cheapest Way to Get a Commercial License in Dubai

If budget is your concern, you can consider:

• Free zones offering no-office, flexi-desk packages
  
• Opting for fewer visa allocations (or none initially)
  
• Choosing single activity vs multiple to reduce fees
  
• Going through a business setup consultancy with limited-time deals or government partnerships
  

Many free zones like IFZA, Meydan, and Shams offer low-cost business license packages starting from just AED 8,999 (no visa).

Hidden Fees to Watch Out For:

• Corporate bank account setup assistance
  
• Foreign name approval charges
  
• External approvals for certain regulated activities
  
• Translation and notary fees for documents
  
• Knowledge & Innovation Dirham fees

Dubai Commercial Register and Company Registration

Setting up your business in Dubai goes beyond just getting a license—it also involves your company being listed in the Dubai Commercial Register. This official record ensures that your business is recognized by the government and is legally allowed to operate within its licensed scope.

What is the Dubai Commercial Register?

The Dubai Commercial Register is a government-maintained database under the Department of Economy and Tourism (DET) that keeps records of all legally registered businesses in Dubai. Once your commercial license is issued, your company is automatically added to this register.

This registration is essential for:

• Legal recognition of your business
  
• Access to government services
  
• Opening corporate bank accounts
  
• Submitting tenders and contracts
  
• Compliance and auditing purposes
  

Being listed here gives your company official credibility and makes you eligible to apply for visas, import/export codes, and more.

How to Register a Company in Dubai Commercial Register

Here’s a step-by-step breakdown of how company registration works:

1. Choose your business activity and legal structure
   
2. Reserve your trade name with DET
   
3. Apply for initial approval and prepare required documents
   
4. Sign and notarize your MoA and lease office space
   
5. Submit the application and pay relevant government fees
   
6. Receive your commercial license and get listed automatically in the commercial register
   

Free Zone vs Mainland Commercial License: Which One is Right for You?

Choosing between a Free Zone and Mainland commercial license is one of the most important decisions when setting up your business in Dubai. Both offer distinct benefits, and the right choice depends on your business goals, target audience, and operational needs.

1. Mainland Commercial License

Issued By: Dubai Department of Economy and Tourism (DET)
Best For: Businesses targeting the UAE market directly, especially B2C or government contracts.

Key Features:

• Can trade anywhere in the UAE, including directly with the local market.
  
• Eligible for government contracts and tenders.
  
• Requires physical office space in most cases.
  
• 100% foreign ownership allowed in many sectors (post-2021 reforms).
  
• Greater flexibility to expand branches across UAE.
  

Things to Note:

• Slightly higher setup and office costs.
  
• More compliance and regulatory oversight.
  

2. Free Zone Commercial License

Issued By: Individual Free Zone Authorities (e.g., IFZA, Meydan, SHAMS)
Best For: Startups, eCommerce businesses, and international trading companies.

 Key Features:

• 100% foreign ownership from day one.
  
• No office requirement in some zones (use flexi-desks).
  
• Faster setup and easier process (2–5 working days).
  
• Access to business support infrastructure in free zones.
  

Limitations:

• Cannot trade directly in mainland without appointing a distributor or setting up a branch.
  
• Limited access to UAE government tenders.
  
• Visa quota limitations in some zones.
  

Comparison Table: Mainland vs Free Zone License

Benefits of Having a Commercial License in Dubai

Getting a commercial license in Dubai is not just a legal necessity—it’s a gateway to growth, credibility, and access to one of the world’s most dynamic business environments. Here’s why thousands of entrepreneurs and global companies choose Dubai for their commercial ventures:

1. Access to Local and International Markets

A commercial license allows businesses to operate locally within the UAE (mainland license) or globally (free zone). This flexibility makes it easier for import-export businesses and trading companies to scale across borders.

 2. 100% Foreign Ownership

Thanks to reforms introduced in 2021, many commercial activities in Dubai now allow 100% foreign ownership, even on the mainland. No need for a local Emirati partner or service agent in many sectors.

 3. Business Credibility & Legal Protection

Being a licensed business means you’re recognized by the government, legally protected, and eligible for contracts, tenders, and partnerships with other reputable organizations. This boosts investor and customer trust.

4. Easy Bank Account and Visa Processing

With a commercial license, you can open a corporate bank account, apply for residence visas for yourself and your employees, and rent or buy office space—all essential for long-term operations in the UAE.

 5. Multiple Business Activities Allowed

You can list multiple trading activities under one license, such as trading electronics, garments, and accessories—provided they fall under approved commercial categories. This cuts down setup costs and expands revenue potential.

6. No Personal Income Tax

Dubai’s 0% personal income tax policy remains one of the biggest incentives for entrepreneurs. Profits earned from your trading business can be reinvested or retained—tax-free.

 7. Government-Backed Business Ecosystem

Dubai offers a well-connected infrastructure, digital portals for business registration, and business-friendly policies, making it easier to operate efficiently and expand.

Whether you’re starting an eCommerce venture, opening a shop, or launching a trading company, having a commercial license in Dubai lays the foundation for sustainable growth.

Validity and Renewal of a Commercial License in Dubai

Once you’ve secured your commercial license in Dubai, your responsibilities don’t end there. To keep operating legally and avoid penalties, you’ll need to monitor the license validity and renew it on time. Fortunately, the renewal process is straightforward if your documents and payments are in order.

 How Long is a Commercial License Valid in Dubai?

A commercial license in Dubai is typically valid for one year from the date of issuance. Some free zones may offer 2- or 3-year packages, but in most mainland and free zone setups, an annual renewal is the norm.

Renewing on time helps you:

• Maintain business continuity
  
• Avoid fines or license suspension
  
• Keep your residence visas active
  
• Stay compliant with banking, leasing, and insurance requirements
  

 Commercial License Renewal Process

Here’s a step-by-step guide to renewing your license:

1. Renew your tenancy contract (Ejari)
   Must be valid for at least one more year.
   
2. Submit required documents
   
   • Valid passport copy
     
   • Current license copy
     
   • Updated MoA (if changed)
     
   • Ejari certificate
     
   • Emirates ID (if applicable)
     
3. Clear any outstanding fines
   Check with DET or the free zone for violations, if any.
   
4. Apply for renewal
   Through the Dubai Department of Economy and Tourism (DET) for mainland, or via the free zone authority portal.
   
5. Pay renewal fees
   Cost varies based on activity, visa quota, and office size.
   

Cost of Commercial License Renewal in Dubai

What Happens If You Don’t Renew?

If your license expires:

• You may be fined (starting from AED 2,000)
  
• Your business could face suspension or blacklisting
  
• Residency visas linked to the license could be canceled
  
• You may lose banking access or contracts

Frequently Asked Questions (FAQs)

1. How can I get a commercial license in Dubai?

You can apply through the Department of Economy and Tourism (DET) or a free zone authority. Choose your business activity, reserve your trade name, submit documents, lease office space or opt for flexi-desk, and pay the fees. The process typically takes 3–10 working days.

2. What is the cost of a commercial license in Dubai?

The cost ranges from AED 9,000 to AED 25,000 depending on jurisdiction, number of visas, and office space. Free zone licenses tend to be more affordable, while mainland licenses may require Ejari and more compliance.

3. What are the benefits of having a commercial license in the UAE?

You can trade goods legally, open bank accounts, apply for visas, and expand across the UAE. It also boosts your credibility, allows 100% ownership in many sectors, and offers tax-free personal income benefits.

4. What is the difference between a trade license and a commercial license in the UAE?

A trade license is a broad category; a commercial license is a type of trade license specifically for businesses involved in trading goods or services. Trade licenses can also include professional and industrial activities.

5. How long does it take to get a business license in Dubai?

If all documents are in order, mainland licenses take 5–10 working days, and free zone licenses can be processed within 2–5 working days. Time may vary for certain regulated activities.

6. What documents are required to apply for a commercial license in Dubai?

You’ll need passport copies, visa or entry stamp, Emirates ID (if applicable), trade name certificate, initial approval, MoA, and a tenancy contract or flexi-desk lease agreement.

7. Can a foreigner apply for a trade license in Dubai?

Yes. Foreign investors can apply for a trade license. Many activities allow 100% foreign ownership, especially in free zones and mainland sectors approved after 2021 reforms.

8. What are the 3 main types of business licenses in the UAE?

The three main types are:

1. Commercial License (for trading)
   
2. Professional License (for services)
   
3. Industrial License (for manufacturing)
   

9. What is the validity period of a commercial license in Dubai?

Most commercial licenses are valid for 1 year and must be renewed annually. Some free zones offer multi-year licenses (2–3 years) depending on the package.

10. Do I need a physical office to get a trade license in Dubai?

For mainland businesses, a physical office is usually required. In free zones, you can opt for a flexi-desk or virtual office depending on the authority.

11. How do I register a company under the Dubai commercial register?

Register by applying through DET or a free zone. Submit required documents, pay the fees, and your company will automatically be added to the Dubai Commercial Register upon license issuance.

12. Is a free zone license considered a commercial license in the UAE?

Yes, if your activity involves trading goods, it’s categorized as a commercial license—regardless of whether it’s issued by a free zone or the mainland.

13. Can I operate across the UAE with a Dubai commercial license?

Only mainland commercial licenses allow unrestricted trade across the UAE. Free zone companies need to appoint a local distributor or open a branch for mainland operations.

14. How much does it cost to renew a trade license in Dubai?

Renewal costs typically range from AED 7,000 to 15,000, depending on the license type, visa quota, and jurisdiction. Additional charges may apply for document renewal and Ejari.

15. Which authority issues business licenses in Dubai?

• Mainland: Dubai Department of Economy and Tourism (DET)
  
• Free Zones: Respective free zone authority (e.g., IFZA, DMCC, SHAMS)
  

16. Can I hold multiple activities under one commercial license in Dubai?

Yes, you can include multiple related activities under a single license, as long as they are approved by the licensing authority and fall under commercial categories.

17. What is the cheapest way to get a trade license in Dubai?

The most affordable option is setting up in a free zone with no visa allocation and opting for a flexi-desk plan. Some zones offer packages starting from AED 8,999.

18. Are there any hidden fees when applying for a Dubai commercial license?

Yes—look out for charges like name approval, external approvals, document translation, notarization, and banking assistance. Always ask for a full cost breakdown.

19. Can I get a UAE residence visa with a commercial license?

Yes. A commercial license allows you to sponsor investor visas and employment visas for staff, depending on your visa quota and office space.

20. What happens if my commercial license in Dubai expires?

You risk fines, license suspension, and visa cancellation. Renew it on time to avoid penalties and operational disruptions. Grace periods are limited, and late renewal costs increase over time.

Final Thoughts: Why Your Business Needs a Commercial License in Dubai

Getting a commercial license in Dubai isn’t just a legal formality—it’s a powerful first step toward establishing a strong and credible presence in one of the most business-forward cities in the world. Whether you’re a startup looking to test a product, a trader expanding globally, or a corporation seeking tax-friendly growth, this license gives you the access and flexibility you need.

From trading locally or internationally to hiring staff and opening a business bank account, the commercial license acts as your all-access pass to the UAE’s vibrant economy. With government reforms allowing 100% foreign ownership, a booming digital infrastructure, and simplified procedures, there’s never been a better time to start.

But navigating the license options, cost structures, and jurisdictional requirements can get tricky. That’s where expert help makes the difference. A trusted business setup consultant can save you time, money, and a lot of back-and-forth with government departments.

📌 Quick Recap

• Commercial license = best for trading businesses
  
• Available in both mainland and free zones
  
• Average cost ranges from AED 9,000–25,000
  
• Valid for 1 year; renewable annually
  
• Visa eligibility, 100% ownership (in most sectors), and bank account access included