When starting a new business, entrepreneurs are faced with a number of important decisions. One of the first that you’ll need to make when setting up in the UAE is choosing which business activity you are going to trade under.
Essentially, this is a question of the industry you are going to trade in and the types of activities you wish to undertake. While not the most taxing of tasks, it can be particularly daunting as there are over 3,000 permitted activities to choose from in the UAE, as specified by the Department of Economic Development (DED) and the country’s free zones. Depending on the nature of your business, you may wish to choose a single activity or a range of activities under a single licence.
Business activities are classified by the Department of Economic Development. A business trade license is also provided to you depending on your business activity. Businesses involved in providing services need a professional license, and those involved in buying or purchasing goods will need a commercial license. Any company that wants to undertake manufacturing activities in UAE needs an industrial license. While applying for a trade license, you must clearly define all the activities you wish to undertake under the main company license.
Your chosen activity will determine not only the type of business you are permitted to carry out but also, in some cases, the area in which you can set up. For example, some free zones – such as Dubai Media City which is open to media-related companies – only allow certain business activities. As this is such an important, and potentially confusing part of the company formation process, it is advisable to work with a company formation agent or a lawyer who can advise on what activities best cover your business.
To know how to apply for a trade license in the UAE get in touch with our business setup consultants.