Being one of the most booming business hubs in the world, it never fails to attract entrepreneurs from all over. A DED license is critical for the operation of any business legally in Dubai. Dubbed the Dubai Department of Economic Development, the department issues licenses necessary for business setup in Dubai mainland and free zones. This step-by-step guide will walk you through the DED license requirements so you are completely aware of the process.
Understanding DED License In Dubai
A DED license in Dubai is the legal document permitting operation within the emirate. Setting up your company either on Dubai’s mainland or one of its free zones, the requirement of a DED license remains mandatory. It is the basic step for business setup in Dubai, ensuring that the company abides by the legal and regulatory frameworks under the Dubai Department of Economic Development.
Types of DED License in Dubai
Before talking about the DED license requirements, the entrepreneur must be aware of the different kinds of licenses offered by the Dubai Department of Economic Development. The principal groups include :
• Commercial License: This category includes businesses dealing in trading activities.
• Professional License: It includes service-oriented businesses; hence consultancies, law firms, educational institutions, etc.
• Industrial License: This license includes businesses involved in manufacturing or any other industrial activity.
Step 1: Choose Your Business Activity
The first step to obtaining a DED license in Dubai is to select the business activity. Dubai Department of Economic Development has an indexed list of over 2,000 business activities, that span from trading and manufacturing to consultancy and education. Your choice will determine the kind of DED license to be obtained and the procedure for a business setup in Dubai.
Step 2: Determine the Business Structure
After you have decided on your business activity, you would have to determine your business structure. These would be:
• Sole Proprietorship: This is when it’s owned by one individual.
• Limited Liability Company: This would involve two or more shareholders.
• Branch Office: This will be a branch of an existing foreign company
• Free Zone Company: It has to be in one of the many free zones in Dubai.
Your choice will affect the DED license requirements and the process for company formation in Dubai. In the instance you opt for an LLC, you’ll need to have some specified capital requirements and have a local sponsor.
Step 3: Register Your Trade Name
The next step in the procedure for a DED license is to register your trade name. Regarding this, the Dubai Department of Economic Development has some naming requirements for your business: the name should relate to the nature of your activity, respect the culture, not violate any legal norms, be unique, and not previously registered by any other person or entity in Dubai.
Step 4: Initial Approval
In the wake of setting your business activity, structure, and trade name, you will be required to seek initial approval from the Dubai Department of Economic Development. The step calls for submission of your business plan alongside other documents to DED. Initial approval means that DED has no objection to your business setup in Dubai and allows you to go on with your application for a trade license.
Step 5: Drafting and Notarizing of MOA
In the case of businesses like LLCs, the memorandum of association has to be drafted and notarized. It is a critical step in obtaining a DED license in Dubai. The MOA describes the structure of the company, the capital distribution, and other relevant details. This needs to be notarized by a Public Notary in Dubai.
Step 6: Leasing of Business Premise
Leasing a real business premise in Dubai is necessary for licensing with DED. You will need to ensure that your lease agreement best suits your business activity and has an area according to the minimum space requirement that DED has set. This is necessary whether you are setting up your company in Dubai’s mainland or free zone.
Step 7: Final Submission of License Application
Now that you have your initial approval, MOA, and lease agreement ready, you can make the final submission for obtaining the DED license. Attach all documents to the Dubai Department of Economic Development while making this final submission for a DED license. These attachments would include an:
Initial approval receipt
• MOA (in case of applicability)
• Lease agreement
• Passport copies of shareholders and partners
• NOC from current sponsor (in case of applicability)
On successful submission, your application will be sent to the DED for review. If all is well, your DED License in Dubai will be issued.
Step 8: Apply for Additional Approvals from Other Government Authorities
Additional approvals from other government bodies in Dubai may be needed for some types of activities. For instance, healthcare-related or education-related business owners need the approval of the Dubai Health Authority or the Knowledge and Human Development Authority, respectively. Comply with all relevant DED license requirements so that additional time is not spent on avoidance of delays in setting up a business.
Step 9: Pay the DED License Fee
Once all approvals are received, you will have to pay the DED license fee. In addition, the DED license fee varies based on the type of business and several business activities one has chosen. Now, make the payment for the same and get your DED license process complete. Now, you have the legal right to conduct your business in Dubai.
Step 10: Collect Your DED License
Collect your DED license in Dubai by completing all past steps and making necessary payments. This license opens the doors to legally running your business in the Emirate. Whether you are setting up a Business in Dubai mainland or within one of the numerous free zones, a DED license is imperative for the success of your company.
Why Work with Business Setup Consultants in Dubai?
If you are new to the legal and regulatory frameworks of Dubai, then navigating through DED license requirements can be confusing. That is why business setup consultants in Dubai exist. They assist people who want to start a business by guiding them through the process of forming companies in addition to ensuring that all DED license requirements are met. Business setup consultants in Dubai can help one in:
Selecting the appropriate business activity and structure
• Preparation and submission of all documents
• Following up with the Dubai Department of Economic Development
• Compliance with all legal requirements
Opening a business in Dubai’s mainland calls for a DED license, and the whole process can be made easy by engaging the services of business setup consultants in Dubai.
DED License in Dubai Mainland vs. Free Zone
While applying for the DED license in Dubai, the major decision to be taken will be whether to form your business in Dubai mainland or Dubai free zone. Both have their advantages and specific DED license requirements.
Dubai Mainland
• Pros: The local market of Dubai is open to them. They can easily deal with government departments as one can carry out his work with government, and quasi-government departments. It has a less restrictive policy on doing business.
• Cons: For LLC, a local sponsor who must own 51% is required.
Dubai Free Zones
• Pros: 100% foreign ownership, no import/export duties, and full repatriation of profits.
• Cons: The company can only operate in the free zone or abroad, with restricted local market access.
Your choice will impact your company formation in Dubai and the process for obtaining a DED license.
Conclusion
Obtaining a DED license in Dubai is an extremely important process for entrepreneurs looking to start their business in this dynamic city. This will help you sail through all DED license requirements one by one and ensure a smooth business setup in Dubai. Whether you would prefer to function in Dubai mainland or one of the many free zones, it is possible to make the process even easier through the services of experienced business setup consultants in Dubai so that you will focus on really important issues, the growth of your business in one of the world’s most dynamic markets.
The DED license in Dubai is way more than a legal requirement; it is your license to succeed in one of the friendliest business environments globally. Be it a company registration process in UAE, the setup of the company in Dubai, or other available business opportunities in UAE, knowing and complying with the DED license requirements will set you on the path to success.
