The increasing popularity of general trading licenses in Dubai free zones is no surprise, considering that the trading industry forms a major part of the UAE’s economy. With proximity to major sea ports and airports, the UAE free zones have transformed into a strategic location for international trading. Over time, the opportunities for entrepreneurs in the UAE have seen an exponential rise, attracting global entrepreneurs to kick-start their ventures there. Let’s explore obtaining a general trading license in the Dubai free zone.
Understanding the General Trading License
The general trading license in the UAE authorises a company to lawfully conduct activities like selling, storing, distributing, importing, exporting, and re-exporting goods under one license. A wide spectrum of goods, including food items, furniture, electronics, and others, can be traded under a general trading license. However, some goods like medical drugs, weapons, and alcohol, among others, require special permissions for trading or are prohibited altogether.
The main difference between General Trading in Free Zones and Mainland
Unlike a regular trading license that restricts a company to trade only one type of commodity, a general trading license allows the trading of various goods, even if unrelated. The major differential factor between general trading in free zones and the mainland is the additional activity cost, excluding license costs that you would have to bear for general trading in the mainland. This charge doesn’t apply to free zones. Plus, in free zones, you can operate with a virtual office without requiring a warehouse.
UAE’s tax benefits and the zero customs tax on importing and exporting goods make the general trading license even more attractive. Besides, setting up a business in the UAE free zone is a straightforward process. The cost of a general trading license in Dubai starts from AED 11,000, although it could vary based on the chosen free zone. The registration of free zone companies can typically be completed within 3-to 4 days and requires minimal paperwork.
Securing a General Trading License in Dubai Free Zone: Step-by-Step
Select your desired jurisdiction: The UAE houses multiple free zones. Choose the one that best suits your business needs. The International Free Zone Authority (IFZA) is a popular investor choice.
Decide the right company structure: Choose the one that best fits your business model: Free Zone Establishment (FZE), Free Zone Company (FZCO), or Branch Company.
Submit necessary documents: You are required to submit the following documents to the concerned authorities:
- Completed application form
- Passport copy of the owner(s)
- Visa copy
- Emirates ID copy (if applicable)
- Two passport-sized coloured photographs with a white background.
The chosen free zone might require additional documents. Pay the license fee. Your general trading license will be issued upon fee payment and process completion.
Cost-Efficiency and Ease of Obtaining a General Trading License in Free Zones as Compared to Mainland Territories
Choosing between a Free Zone and the mainland can be critical if you’re planning to start a business. One significant aspect to consider is the cost and ease of obtaining a general trading license, which tends to be simpler and more economical in Free Zones compared to mainland territories.
In Free Zones, distinct advantages make the process more appealing. Notably, there is no activity fee, which is typically required in the mainland. This reduction in initial setup cost can significantly lower the barrier to entry for many entrepreneurs and small business owners.
Moreover, Free Zones do not require a memorandum for obtaining a general trading license. This simplifies the administrative process and saves potential business owners from the often time-consuming and complicated paperwork to create such documents.
Furthermore, the entire license process in Free Zones is online, adding to the convenience. This online system streamlines the process and allows for the swift submission of applications, immediate communication for any necessary corrections, and expedient approval times.
Conversely, the process on the mainland can be more time-consuming, involving several stages of paperwork, with potential delays at each step. Thus, for those seeking to start a business efficiently and economically, obtaining a general trading license in a Free Zone may be more attractive, thanks to lower costs, fewer hurdles, and a straightforward, digitised application process.
Obtain Your General Trading License Effortlessly with Us
We at General Trading License are committed to making your journey to acquiring a general trading license in the UAE-free zone smooth. Our team of business setup consultants will assist you through each step, from understanding regulatory requirements to obtaining necessary approvals. To set up a general trading company in Dubai, contact us today.