What Is The Difference Between A Trading Licence And General Trading?

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You must essentially realise that the United Arab Emirates is considered the business capital for all the Middle-Eastern counties. This is fundamental; all the financial, commerce, business, and logistics sectors have enjoyed tremendous expansion over the previous two decades, thereby making a significant contribution to the global economy.

There’s no denying why more and more firms are now looking to Company Formation in Dubai. If you are a first-timer, you must essentially realise that you will need a valid general trading license to operate commercially in the UAE markets.

What Is A General Trade License?

Definitively speaking, you need to have a general trading license under your enterprises’ names to export, import, or trade items or products in the UAE. You must realise that a general trade license essentially covers several trading activities within the same or other industries when Setting Up A Business In Dubai. Furthermore, you must also note that the particular trade license is expensive, though it brings some exclusive benefits along with it.

Why Should Someone Apply For A General Trade License?

It is worth mentioning that the original price for getting a general trade license in the UAE begins at AED 30,000- it can go up to AED 40,000 (if certain parameters are met). Detailed observation will essentially tell you that general trading licenses can act as legal holding structures and other licensing authorities within the UAE. Additionally, you can deal with storage and warehousing assets in the same way.

Here’s a detailed breakdown of the key advantages of a general trading license that can help you when setting Up a Business in Dubai.

No Taxes

There’s no denying that every commercial enterprise would like to trade without necessarily paying taxes. This is where you can see the significance of having a general trade license- to put it simply; trade licenses can exempt you from paying any taxes when operating commercially in the UAE. This is effective for all your profits, income, or another amount.

Trade Locally and Internationally

Secondly, you must always have a general trade license if you want to Open Business in Dubai. This is essential since it will allow you to trade across borders without any objection from the authorities. You can then explore all your money-making opportunities available in local, national, and international markets.

Straightforward Process

It is worth mentioning that obtaining a general trade license is rather simple in the UAE. You need to approach the Department of Economic Development (DED) in Dubai for the license. They have completely revolutionised the application process as part of the government’s initiative. This is why you will find applying for a general trade license easier than setting up a corporation in a free zone.

Apply for Multiple Visas

You also have the option to apply for several visas, most likely for your staff, when you have a general trade license. You must remember that the size of your office determines the number of visas that you can obtain. In addition, you can sponsor visas for your dependents as well.

Auditing Is Not Mandatory

Lastly, you must also realise that having a general trade license will allow you to keep off from submitting auditing reports to government authorities. This is not the case for the rest of the business owners who are contemplating open business in Dubai. To put it simply, you don’t need to go through a yearly audit when you have a general trade license.

Trade License in UAE

The Department of Economic Development Authority in Dubai is responsible for issuing trade licenses to individuals who have aspirations for Company Formation in Dubai. You will ideally need approvals from and authorisation from concerned ministries and other relevant agencies for certain types of business:

Types of Trade License in UAE

Trade licenses typically include every type of trading activity- Company Setup Consultants In Dubai essentially classify the trade licenses into three types.

  • Professional licenses – occupations, services, artisans, and artisans.
  • Industrial permits are required to start an industrial or manufacturing business.
  • Obtaining a trade license in the United Arab Emirates is pretty straightforward.

Requirements To Obtain A Trade License:-

Ideally, you must have a detailed comprehension of the legal standards before considering business setup Dubai. Most of the laws and regulations are enforced by the relevant government agencies to ensure maximum commercial benefit for business owners.

  • You must ideally determine all relevant business activities within each business license
  • You must have a detailed plan for your legal business status
  • You must choose a trading name
  • You must then apply to the Department for initial permission
  • You must consider leasing business premises and obtain clearances from the Authority

After reviewing the themes mentioned above, one can choose which business license they require; however, this is dependent on their business demands.

Costs of a General Trade License 

If you are a first-timer, you must essentially remember that a Limited Liability Company (LLC) is the most prevalent legal entity (LLC). You will essentially need AED 300,000/- at the very least for establishing an LLC General Trading License. You may not need a bank guarantee, but mention it in the Memorandum of Association (MOA).

Suppose you are running a general trading company in the UAE. In that case, you must follow the guidelines set by the Dubai Department of Economic Development (DED) to import, trade, and re-export any of the permitted items. You could also consider arranging for special approvals through a sole establishment, an LLC, or a Single Ownership.

You will require AED 25,000 per person during the first year of business setup Dubai for a general trading license. However, you will pay around AED 15,000 right from the next year onwards. You can positively link the license to a formal holding structure in the UAE and other licensing authorities. As mentioned already, you can use the license to rent storage and do warehousing.

Final Thoughts

It only fits to admit that general trade licenses differ greatly from trade licenses. If you are looking to obtain one, you should consider bringing in Company Setup Consultants in Dubai – you could visit Dubai Business Setup to simplify the application process.

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