The difference between a commercial license and a commercial register in the Emirates

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٠٣ مايو The difference between a commercial license and a commercial register in the Emirates

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Learn the difference between a commercial license and a commercial register in the Emirates because in the United Arab Emirates, the proper establishment of any business is an essential step towards success and growth. Among the important legal procedures that investors and company owners must carefully understand are the commercial license and commercial register. While some may think that they are two similar documents, there are clear differences between them that play a vital role in the management and conduct of business in the country. In this article, we will review the difference between a commercial license and a commercial register, explaining how each affects companies and how to obtain them, in addition to their importance in ensuring compliance with local laws and regulations. In this article, we will review the difference between a commercial license and a commercial register in the Emirates .

The difference between a commercial license and a commercial register in the Emirates

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Commercial register in Dubai

The commercial registry is an official registry managed by government authorities in the UAE and is considered an essential document for every business. The commercial registry is used to document all data related to companies, such as the company name, type of activity, office address, names of owners or partners, and registration number. The commercial registry is an important legal tool that confirms the company’s existence and helps regulate commercial activities, as it requires companies to update their information regularly. The commercial register is one of the basic requirements for obtaining a commercial license, and is considered a legal certificate proving that the company has been registered in accordance with local laws and regulations, which enhances its credibility and contributes to facilitating commercial operations and legal transactions.

In addition to its role in documenting companies’ basic information, the commercial registry is an important tool for ensuring the transparency of business activities and monitoring companies’ compliance with applicable laws and regulations. Companies are required to renew their registration periodically to update their data and maintain the validity of the register, which contributes to protecting the rights of various parties, including customers and suppliers. The commercial registry is also considered an essential reference for financial institutions and government agencies when dealing with companies, such as applying for loans, grants, or work visas. By registering the company in the commercial registry, the company strengthens its credibility and builds its reputation in the market, making it easier for it to establish business partnerships and integrate into local and international economic activities.

How to open a commercial register in Dubai

To open a commercial register in Dubai , you can follow the following steps:

Determine the business activity : Determine precisely the type of business activity that you will practice, as this will help you determine the type of license you need.
Choosing a business name : Choose a unique and distinctive business name. Make sure the name is not similar to other company names. Register the trade name through the Dubai Department of Economic Development website or through its offices.
Preparing the required documents : Prepare the following documents:
- A copy of the passport of investors or partners.
- Residence visas (if available).
- Lease contract for the company’s headquarters.
- A copy of your activity’s approvals or licenses, if any.
Obtaining the necessary approvals : Some commercial activities may require obtaining additional approvals from governmental or special regulatory bodies. Make sure to obtain all required licenses or approvals.
Submitting a commercial registry application : Submit a commercial registry application to the Department of Economic Development via its website or through one of its offices. Attach all required documents to the application.
Payment of fees : You will have to pay the prescribed fees for issuing the commercial register. Make sure you know the expected fees for different businesses.
Receiving the commercial register : After reviewing the documents and paying the fees, the Department of Economic Development will issue the commercial register. You can pick it up at the office or via email if the service is available.
Opening a bank account : After obtaining the commercial register, you can open a bank account in the name of the company in one of the approved banks in Dubai. By following these steps, you can complete the process of opening a commercial registration in Dubai smoothly.

Commercial license in Dubai

A business license in Dubai is a legal document issued by the Department of Economic Development (DED) and is considered necessary to operate any business activity in the emirate. The commercial license is an official license proving that the company has been approved by the competent authorities to carry out the authorized commercial activities. The commercial license includes basic information about the company, such as its name, the type of activity it carries out, its location, and the names of the owners or partners. Companies are required to obtain this license to ensure their compliance with local laws and trade controls, and it also contributes to facilitating legal and banking transactions. The license is required to be renewed periodically to ensure the continuity of business activity, and reflects the company’s compliance with quality and transparency requirements in the market. A trade license in Dubai is an essential step towards establishing a successful business that is in harmony with the legal and regulatory requirements of the emirate.

A trade license in Dubai also plays a vital role in enhancing the credibility of companies and the possibility of obtaining support and various business opportunities. It is considered proof that the company has passed all required legal procedures and meets regulatory standards. To obtain a business license, companies must submit an application that includes all the required documents, such as the articles of incorporation, identity documents for the founders, and the office lease contract. It also requires paying the prescribed fees and meeting certain conditions related to the type of business activity and location. A commercial license gives companies the ability to operate legally in Dubai, and opens the doors to cooperation with government agencies, banks, and investors. It also contributes to facilitating procedures related to employment, visas and work, which enhances the ability of companies to grow and innovate in the dynamic business environment in Dubai.

Types of commercial licenses in the Emirates

Here is a table showing the types of business licenses in the United Arab Emirates:

License type	Description	Activities included
Commercial license	It is issued to businesses that engage in general commercial activities such as buying and selling goods and services.	Wholesale and retail trade, product sales, distribution, and others.
Industrial license	Issued to companies working in the field of manufacturing and production, including all industrial operations.	Factories, manufacturing workshops, raw material production, and others.
Professional license	Issued to businesses that provide specialized professional services, such as consulting, education, and maintenance.	Law, financial consulting, design, maintenance, education, and others.
Tourist license	Issued for activities related to tourism and hospitality, such as hotels, travel offices, and tourism agencies.	Organizing trips, hotels, resorts, travel agencies, and others.
Commercial/industrial license	It is issued for businesses that include both commercial and industrial activities, and allows companies to carry out multiple activities.	Trade and industry, such as selling industrial equipment and supplying materials.
Free license	It is issued to companies operating in free zones, and allows the practice of commercial and industrial activities within the scope of the free zone.	Trade and industry in free zones such as JAFZA, DAFZA, and others.

Economic business registration procedures

Registering an economic business in the UAE requires following a set of legal and procedural steps to ensure the proper establishment of the company. Here is an overview of the basic procedures for registering an economic business:

Determine the type of activity that the company will engage in, whether it is commercial, industrial, professional, tourism, or other.
Choose a trade name for the company that complies with local regulations and is not previously used. The name must comply with naming laws in the UAE.
Individuals: Copy of passport, residence visa (if applicable), no objection certificate (if there are partners).
Companies: commercial registry, articles of incorporation, copy of the founders’ passports, office lease contract.
Determine the workplace, whether it is an office, factory, or store. The site must be compatible with the activities permitted in the license.
In free zones: Registration is through the administrative body of the relevant free zones, such as JAFZA or DAFZA.
In non-free zones: registration is done through the Department of Economic Development (DED) in the relevant emirate.
Submit the application to the relevant authority (DED or Free Zone), and provide all required documents.
Pay the prescribed fees to obtain the license.
Open a bank account in the name of the company in one of the approved banks in the Emirates.
Register with the Federal Tax Authority to obtain a tax number if the company intends to engage in taxable activities.
Businesses may need additional licenses or special permits depending on the type of activity and location.
Registering employees for social insurance and health insurance in accordance with local requirements.
Submit applications for work visas for founders and employees.
Adhere to all local regulations and laws related to the business, including labor, health and safety laws.

These steps represent the basic framework for registering economic businesses in the Emirates, and the details of the procedures vary based on the type of activity and location.

Advantages of obtaining a commercial license and registering your activity

A commercial license in the UAE provides many advantages for companies and investors, including:

Entry into the Emirates market: A commercial license allows companies to enter the Emirates market, work there, and provide their services to local customers. This is considered an excellent opportunity for companies and investors to expand the scope of their business and increase opportunities for growth and profitability.
Obtaining work visas: Companies that have a commercial license can obtain work visas for foreign employees and workers who work in the company, and this helps attract high calibers and diverse experiences to the company.
Obtaining government support: Companies that obtain a commercial license receive multi-faceted government support, such as financial support, tax facilities, logistical support, training and development, and this helps companies achieve success and stability in the market.
Intellectual property protection: A commercial license allows companies to protect intellectual property rights, such as trademark rights, patents, and copyrights. This helps maintain the company’s reputation and prevent the use of similar or traditional trademarks.
Investment in infrastructure: The UAE occupies an advanced position in investing in infrastructure and developing many vital projects, such as ports, airports, roads, bridges, schools, hospitals, etc., and companies that have a commercial license can benefit from this advanced infrastructure and invest in it.
Entry into global markets: Companies holding a commercial license in the Emirates can benefit from its strategic location and enter global markets through partnerships and various commercial agreements. This helps expand the scope of the company’s business and increase opportunities for growth and profitability.

Trade license fees in Dubai

Steps to obtain a commercial license in the Emirates

A commercial license in the UAE can be obtained by following these basic steps:

Determine the type of company: Investors must determine the type of company they wish to create, such as a sole proprietorship, partnership, joint-stock company, or limited liability company, according to the needs of their business and the conditions of local legislation.
Choosing a company name: Investors must choose a name for the company to be created, and must ensure that the name is not repeated with any already existing company.
Determine the location: The location of the company to be established must be determined, whether it is in the free zone, industrial zone, or virtual office.
Submitting the application: The application to obtain a commercial license must be submitted to the relevant authority, and these authorities differ depending on the emirate. In the Emirate of Dubai, the application is submitted to the Department of Economic Development in Dubai, while in the Emirate of Abu Dhabi, the application is submitted to the Abu Dhabi Council of Trade and Industry.
Company registration: After approval of the application, the company must be registered in the commercial registry and obtain the final commercial license.
Adherence to conditions: Company owners must adhere to the required conditions, such as adherence to financial and tax accounts and practical and environmental laws.

Investors must check with the relevant authorities in the emirate in which they wish to establish their companies to learn more details and requirements necessary to obtain a commercial license in that emirate.

In conclusion, both the commercial license and the commercial register are considered essential and indispensable elements in establishing and operating economic businesses in the Emirates. While the commercial registry represents an official document proving the company’s registration and documenting its legal data, the commercial license is a permit authorizing the company to carry out its commercial activities in accordance with local laws and regulations. Both contribute to ensuring that companies adhere to legal practices, and enhance their credibility in the market, which contributes to building an organized and safe business environment. By understanding the differences between these two documents and the procedures for obtaining them, investors and business owners can take informed steps to legally and efficiently establish their companies. The importance of complying with these requirements remains clear in achieving success and growth in the UAE market, which contributes to supporting the economy and enhancing the business environment in the country.