- July 2, 2019
- Posted by: master
- Category: Business Setup, Legal Article
Corporate and activity licenses are often called commercial licenses by many people, but in fact, there are many types of licenses which differ in their names depending on the entity issuing the license or the license general requirements.
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In other words, you may incorporate a limited liability company and you will be issued a commercial, touristic or free zone license according to the entity issuing that license without affecting the legal nature of the company. However, this highly depends on the entity issuing the license to you in order for you to be able to conduct business in the country.
There are several forms of commercial licenses that may differ according to each emirate, since each emirate determines the entities which issue the license, and also set its own requirements for issuing such licenses. Thus, we will discuss this topic in the general framework, noting that the following instructions may differ from one emirate to another or may change over time.
It should be noted that in case if a certain entity issues the license, it may require approval of other entities, for example, the law firm license which is issued by the Department of Economic Development requires the approval of Ministry of Justice, while the hospital license which is issued by the Department of Economic Development requires the approval of the Health Authority.
Licenses include the commercial activities practiced, and upon issuance of each license, the activities the company practices shall be added in exchange for fees for registration. Moreover, there shall be annual fees for renewal. In addition, the type of license shall determine the activities which may be added, for example, any commercial activity cannot be added to professional licenses. The elements and types of commercial licenses are listed below:
First: Elements and Components of Commercial Licenses (They Differ from one Emirate to Another):
1- License data (Company name, company type, license number, registration number, license effective and expiration dates)
2- Names of partner, their percentages and shares
3- Commercial activities licensed to be practiced
4- Name of the Director General
5- Controls or warnings
Second: Licenses Are Divided into Several Types (They Differ from One Emirate to Another):
1- Commercial License:
The Department of Economic Development in the Emirate of Abu Dhabi and the Emirate of Dubai is the competent authority to issue commercial licenses to owners of companies or institutions that practice commercial activities such as general trade, contracting, real estate, transport, clinics, hospitals, etc. This license type is considered the most common type in UAE.
2- Agricultural License:
The Department of Economic Development in Abu Dhabi and the Dubai Municipality in the Emirate of Dubai are the competent authorities to issue agricultural licenses to the owners of farms that work in plant, fish or animal production.
3- Crafts License:
It is issued by the Department of Economic Development in the Emirate of Abu Dhabi to any person who independently practices a craft for profit, and is dependent on their physical effort, or use of tools and equipment, such as carpentry, printing services, blacksmithing, etc.
4- Professional License:
The Department of Economic Development in the Emirate of Abu Dhabi and Dubai specialize in issuing licenses to professionals who rely in their work on their studies, intellectual abilities and scientific talents, such as consulting offices, law firms, audit offices, etc.
5- Industrial License:
This license is issued to owners of factories of all types which manufacture products for selling them to earn profit. The competent entity for issuing such license is the Higher Corporation for Specialized Economic Zones in the emirate of Abu Dhabi.
It is worthy of mention that the emirate of Dubai does not mind adding industrial activities to commercial and professional licenses for encouraging industries and trade, for example, mobile phone trading license may be added to mobile phone manufacturing license. Dubai Department of Economic Development is the competent entity for issuing such licenses.
6- Tourism License:
This license is issued to the owners of tourist establishments and facilities that engage in various forms of tourism activities, including hotels, travel, tourist restaurants, rental of cruise boats and floating restaurants, etc. Tourism licenses are issued by the Abu Dhabi Tourism Authority in the Emirate of Abu Dhabi and Dubai Tourism Authority in the Emirate of Dubai.
7- Free Zone License:
This license is issued by the competent free zone authorities in each emirate, the activities which can be practiced under the license of each free zone vary according to the nature of the free zone. For example, manufacturing is included in Jebel Ali free zone license, while general trade is included in Dubai and Abu Dhabi airport free zone. Meanwhile, technology and software services shall be in the Dubai Internet City Free Zone, and media production license in media free zones in emirates of Abu Dhabi and Dubai.
Third: Approvals for Activities (They Differ from One Emirate to Another):
Finally, we would like to point out that some activities which require or are related to vital subjects in the country shall require approval of several entities according to the nature of the activity. In some sectors, this may be done by requesting an expert to obtain a license or registration. For example:
1- The Ministry of Interior has to approve the following activities due to their significant effect on security: driving schools, manufacturing of keys and seals, fire equipment, alarms and safety equipment, used car showrooms, car painting and plumbing workshops, and car rental companies.
2- The Ministry of Justice issues approvals for the following activities after conducting investigation, testing and verifying the availability of requirements to ensure the quality of legal service or to conform to the required standards, such in case of establishing law firms, legal translation offices, or legal consultation offices.
3- The Supreme Petroleum Council issues approvals for the parties licensed to operate in the petroleum sectors in United Arab Emirates after the registration in the Council, such as: onshore and offshore oil and gas field services, and onshore and offshore oil drilling.
4- For the General Authority for Health Care, with the aim to ensure provision of health care services, provision of medical and health requirements and experience, the following activities have to be approved by the authority: pharmaceuticals, drug warehouses, pharmacies, private medical clinics, scientific offices and medical laboratories, hospitals, veterinarian clinics, veterinary pharmaceuticals, agricultural, livestock and fisheries production requirements (This approval shall be renewed annually).
5- Obtaining the approval of the Central Bank of the UAEis required to ensure the financial stability and the quality of financial services for the following activities: banks, shares and bonds, financial investments, foreign exchange offices, and bank representative offices (This approval shall be renewed annually).
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