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Choosing the right business license is one of the most important decisions you need to make when setting up a business in Dubai. The type of license not only legally defines the activity of your company, but also influences:
•the possibility of obtaining a bank account,
•obtaining a residence visa,
•conclusion of contracts,
•compatibility with Free Zone or Mainland.
In this guide, you will find out what types of commercial licenses exist in Dubai, what is the difference between them and how to choose the right one for your business.
1. What is commercial license in Dubai?
Commercial license is the legal authorization issued by the UAE authorities that allows you to carry out a certain economic activity. Without a valid license, you cannot register the company, open a bank account and legally invoice.
The license is issued by:
• Free Zone Authority — for companies registered in special economic zones (e.g. Meydan, IFZA, DMCC),
• Dubai Economy (DED) — for companies registered in Mainland.
2. Main types of business licenses in Dubai
There are 4 main categories of commercial licenses:
a) Commercial License
It allows the trade of physical goods, import/export, wholesale or retail sale.
Examples of activities:
•Online Store
•International trade of products
•Distribution and logistics
•Equipment sale
b) Service License (Professional License)
It is aimed at professionals who provide intellectual services or consulting.
Examples of activities:
•Tax consulting, IT, marketing
•Graphic design or UX/UI services
•Freelancing
•Educational services
c) Industrial License
For companies that manufacture or process goods. Requires industrial space and additional permits.
Examples of activities:
•Manufacture of foodstuffs
•Typography or packaging
•Manufacture of furniture or electronics
d) Media, educational or medical license
Special licenses issued by thematic or ministerial Free Zones (ex: Tecom, KHDA, DHA).
Examples of activities:
•Advertising agency
•Educational or Coaching Center
•Medical or aesthetic clinic
3. How to choose the right license according to your business
a) Are you a freelancer/digital consultant?
Recommended license: Licenza professionale
Recommended area: Free Zone (ex: IFZA, SHAMS, Meydan)
Why?
•You can activate 100% on your own;
•You do not need a local partner;
•Low cost and virtual address included.
b) Do you have an online store?
Recommended license: E-commerce Commercial License
Recommended area: Free Zone (ex: Meydan or Dubai CommerCity)
Why?
•You need the right to import and sell products;
•You can connect your company to global marketplaces;
•Excluding VAT or corporate taxes below AED 375,000.
c) Do you want to open clinic/salon/physical store?
Recommended license: Professional or Commercial (depending on the activity)
Recommended area: Mainland (ex: Dubai Economy)
Why?
•You need access to local customers;
•You can rent physical space and get a residence visa;
•You need a license approved by specialized authorities (ex: DHA for medical).
d) Are you active in production or packaging?
Recommended license: Licencia industriale
Recommended area: Free Industrial Zones (ex: JAFZA, Dubai Industrial City)
Why?
•You need physical space for operations;
•Requires advisories and special infrastructure;
•Possibilities of import/export without customs duties.
4. Common mistakes when choosing a license
Many entrepreneurs choose the wrong license, relying on “generic” offers or packages with vague designations.
The most common mistakes:
•Choosing a “general trade” license for IT services → can block the opening of the bank account.
•Lack of an accurate activity code → the license does not cover all services offered.
•Misunderstanding the restrictions in the Free Zone → some licenses do not allow operating in the local market.
•Lack of adaptation of the license if the company expands → sometimes amendments or additional licenses are needed.
5. What should a full license contain?
A valid and complete license must include:
• Name of business — according to the official classification
• Geographical area of operation — international or local
• Official Commercial Codes — compatible with banks and authorities
• Shelf life — usually 1 year (with possibility of renewal)
• Authorized issuers —Free Zone Authority or DED
6. How to make the right decision
Choosing the right business license in Dubai should start from your firm's actual business and long-term goals.
Key questions before you decide:
•Who are you addressing? (local or international customers)
•Do you need a physical office or just a virtual address?
•Will you be operating products or just digital services?
•Are you planning to apply for a visa?
Our recommendation:
Do not choose the license only by price. Collaborate with a consultant who understands the structure of the Dubai market and can make a personalized recommendation for you.
Want to find out which license suits your business?
Seek advice on choosing the right commercial license.
