The UAE is a country that the whole business world knows as a hub that attracts non-resident entrepreneurs and companies from across the globe. It is definitely worth your attention if you are going to set up a business venture! However, this step means that you will have to obtain a trade license in the UAE. This is a document that will give your business operations an official status and help you access the large and thriving market.
How much does a UAE license cost? Well, we cannot give you one definite answer as the price may differ a lot depending on the location and business model. Moreover, there are different kinds of licenses that come at various prices. Our team is here to help you choose cost-effective licensing options so that you can start your business without exorbitant initial expenses.
There are emirates where licenses are more expensive, but affordable solutions do exist even in such popular destinations as Dubai or Sharjah. In this article, we will explore ways to obtain the cheapest trade license in the UAE. Let’s look at the free zones available in the UAE and the options they may offer.
Understanding Trade Licenses in UAE
What Is a Trade License?
A trade license is a legal permit to carry out business activities that all companies intending to register in the Emirates are required to obtain. A business owner who possesses the license will have a good night’s sleep just due to the fact that this document will make his or her business legal and ensure that regulatory authorities will be satisfied with the legitimacy of the legal entity.
Types of Trade Licenses
- Commercial License. You will need one to trade goods or engage in general commerce.
- Professional License. This one is required if you are going to provide services, such as consultancy or freelance contract-based services.
- Industrial License. If your business activity will be connected with manufacturing or production, this is the type of license that will be right for you.
Why Choose a Free Zone License?
A free zone license is an optimal choice, and far-sighted entrepreneurs will definitely appreciate its flexibility and benefits. If you register a company in one of the UAE’s free zones, you will have the right to full non-resident ownership, and you will not be liable for any corporate taxes. What is more, the administrative hurdles you will have to overcome are almost reduced to zero. We recommend free zones if you form a startup, a small or medium-sized company, or even if you are the owner of a well-established business that wants to have a competitive edge.
Want to know which free zone in the UAE is the cheapest? Please read our article to see the shortlist.
Factors Influencing Trade License Costs
The UAE license costs depend on a number of factors:
- Business Activity Type. Some activities will entail higher costs as they require more documents to be submitted or additional approvals. Healthcare or construction are typical examples, so if you decide to conduct business activities in these fields, be prepared for extra expenses.
- Free Zone vs. Mainland Licensing. Free zone licenses are more affordable than those issued elsewhere and come with some tangible benefits: for example, you will enjoy a simplified licensing procedure and will not need to hire a local sponsor to obtain the permit.
- Number of Visas Required. You may need work visas for your employees, and each one naturally increases the cost of your license.
- Office Space Requirements. A company registered in the UAE is required to have a local office. However, if you opt for a free zone, you will have access to more flexible solutions, such as virtual offices. As a result, you will minimize the license cost to the extent reasonably possible.
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Top Free Zones Offering Cheapest Trade Licenses
There are a lot of free zones in the UAE, and each of them is good for a particular company type – that is, you will not find a one-size-fits-all solution. This is the reason why we recommend consulting our seasoned experts to select the most suitable option for your case.
Still, there are several free zones where licenses are the most affordable, and we have made a list of them for you.
The International Free Zone Authority, also known as IFZA, will be a perfect choice if your top priority is finding the most cost-effective solution of all those available.
- Cost of License: It starts at AED 11,500, which makes it one of the cheapest licenses in the UAE.
- Business Activities Allowed: There is quite a long list of these: you can engage in trading, consultancy, e-commerce, and other activities.
- Key Benefits:
- The free zone offers flexible solutions when it comes to obtaining a legal address – that is, you can rent a virtual office to save costs.
- The process of receiving the desired document will not be long – it will take you no more than 1 or 2 days.
- Additional Services: If needed, you can receive assistance with obtaining visas, administrative support, and help opening a corporate bank account for your company.
Need help with remote company registration in IFZA? Please follow the link to study the benefits of the free zone and make an informed decision.
RAKEZ (Ras Al Khaimah Economic Zone)
RAKEZ is yet another good option if you, first of all, need a license that does not cost an arm and a leg.
- Cost Breakdown: The cheapest e-commerce license or general trading license will cost AED 10,500 and may be more expensive depending on your business details.
- Business Categories: This solution would be a perfect fit for small and medium enterprises (SMEs).
- Advantages for SMEs:
- You will get four visa quotas to be used for your employees or other purposes.
- The cost is quite affordable, and you will be able to select a package tailored to your business.
Get more information on setting up an offshore company in Ras Al Khaimah free zone. Our team is ready to help you with any issues you may find complicated.
If you are working in the creative industry, you will hardly find a better choice than Sharjah Media City (SHAMS), a free zone specially created for such businesses.
- License Types: Obtain a media production license, a license for a tech startup, an event management license, and more.
- Estimated Costs: Business owners can get a license for as low as AED 12,000, though some cases may require more expenses.
- Best Suited Industries: Media, design, marketing, and other creative industries will definitely feel at home.
Want to find more details about this remarkable free zone? SHAMS is a rapidly developing FEZ that we do recommend, and here is a guide on company formation that will help you. Do not hesitate to use the live chat to ask any questions!
Ajman Free Zone
New businesses and startups that need support at the initial stages of their development often opt for the Ajman Free Zone.
- Cost for New Businesses: Ajman is one of the most affordable options in the UAE as you can obtain a license here at AED 9,500.
- Popular Activities Supported: Companies that engage in retail, professional services, and consultancy usually find Ajman FEZ very attractive.
- Licensing Process: You will not have to jump through many administrative hoops to get a license here, and the whole procedure will not take more than 2 to 3 days.
Read more details on Ajman free zone to see whether this is the right option for your business.
Comparison Table of Costs Across Free Zones
| Free Zone | License Cost | Business Activities | Visa Quota | Time to Issue |
|---|---|---|---|---|
| IFZA Dubai | AED 11,500 | Trading, Consulting | Up to 3 | 1–2 days |
| RAKEZ | AED 10,500 | E-commerce, General Trade | Up to 4 | 3 days |
| SHAMS Sharjah | AED 12,000 | Media, Tech Startups | Up to 6 | 2 days |
| Ajman Free Zone | AED 9,500 | Small Retail, Services | Up to 2 | 2–3 days |
Benefits of Choosing a Low-Cost Trade License
- 100% Ownership for Expats. If you set up a company in mainland UAE, you will not be able to be its full owner unless you are a local resident. However, free zones will give this opportunity to you, and you will own 100% of your company even though you are a foreign investor.
- Tax-Free Environment. The UAE is a country that minimizes your tax burden: you will have to pay zero tax in most cases on the condition that you derive 100% of your profits outside the UAE.
- Simplified Setup Process. You will not encounter any difficulties registering your venture in most free zones, so a business can be launched rather quickly.
- Scalability for Business Growth. Licenses in the UAE are affordable, as you may have seen above, so companies can use their budget to expand their business operations to new markets rather than allocate it to administrative tasks.
Step-by-Step Process to Obtain a Trade License
Choose a Free Zone and Business Activity. First of all, think about your business needs and the activities you are going to engage in. It will help you select the right free zone, as not all of them are versatile.
Submit Required Documents. Collect the package of required documents, such as passport copies, visa details, proof of residence address, and other standard papers.
Complete Payment and Receive Your License. You will need to pay a number of required fees – and wait a few days to get your trade license.
Apply for Visas (if applicable). The majority of free zones provide the benefit of visa quotas, which is of great help to you and your employees.
Conclusion
The UAE is a country where you will find different licensing options that are designed to satisfy the requirements of various business owners and entrepreneurs from any industry or location. Choosing an affordable option means that you will allocate most of your budget to business development rather than administrative fees, which is something that most business people are after. The above-mentioned free zones (IFZA, RAKEZ, SHAMS, and Ajman) are among the top destinations that we recommend. If you are looking for an ideal option, you are sure to find it there.
Ready to start your business in the UAE? Contact us today to set up a company and obtain a license without much hassle!
