When setting up a business in Dubai, one of the key decisions entrepreneurs must make is whether to obtain a mainland trade license Dubai or a professional license. Each type of license serves different purposes and is suitable for specific business activities. Understanding the differences between trade licenses and professional licenses is essential for choosing the right option for your Dubai-based business.
Trade license:
A trade license, also known as a commercial license, is required for businesses engaged in trading, importing, exporting, or selling physical goods. This type of license is suitable for businesses involved in retail, wholesale, manufacturing, distribution, and logistics activities. Trade licenses allow businesses to engage in commercial transactions, import and export goods, and operate within the designated jurisdiction, whether in a free zone or on the mainland.
Key features of trade license:
Trading activities: Trade licenses permit businesses to engage in buying, selling, importing, exporting, and trading physical goods within Dubai’s jurisdiction.
Commercial operations: Trade licenses are suitable for businesses involved in commercial activities such as retail, wholesale, distribution, manufacturing, and logistics.
Physical presence: Businesses holding trade licenses may require physical office or warehouse space to store inventory, display products, and conduct trading operations.
VAT registration: Businesses holding trade licenses may be required to register for value-added tax (VAT) if their taxable turnover exceeds the specified threshold.
Professional license:
A professional license is required for businesses offering professional or non-physical services, such as consulting, legal services, accounting, engineering, healthcare, education, and IT services. This type of license is suitable for individual professionals, freelancers, and consulting firms providing specialized expertise or advisory services to clients within Dubai’s jurisdiction.
Key features of professional license:
Service-oriented activities: Professional licenses permit businesses to offer professional services, expertise, or consultancy in specialized fields without engaging in physical trading or commercial activities.
No physical presence: Businesses holding professional licenses may not require physical office space, warehouse facilities, or retail outlets to deliver services. Services may be provided remotely or on a client-site basis.
VAT registration: Businesses holding professional licenses may be required to register for value-added tax (VAT) if their taxable turnover exceeds the specified threshold, depending on the nature of the services provided.
