The UAE Laws Series. 6 March 2023
This is a companion piece to the previous article on setting up business in the UAE which you can refer here: https://www.vikneshyap.com/post/setting-up-your-business-in-the-united-arab-emirates
Business Permits and Approvals Process in the UAE
Welcome to the business permits and approvals process in the United Arab Emirates, a major hub for international business. The UAE is known for its booming economy and great business prospects, and as such it is seen as a great place to start and/or run a business. In order to be successful, however, there are certain permits and approvals processes which must be followed. This guide will cover all aspects of the process and should equip you with the knowledge needed through all the necessary legalities, though this is not intended to substitute a qualifed UAE lawyer and/or legal consultant's advice.
1. Getting a Business License
The first step in the business permits and approvals process in the UAE is to obtain a business license. To begin, you will need to decide which type of license you require: a Mainland license, a Free Zone license, or a Professional Service license.
A Mainland license is ideal for those setting up brick-and-mortar business in the UAE, while a Free Zone license is perfect for those who are looking to take advantage of special benefits such as tax exemptions and other incentives. Professional services licenses are for those who will be offering professional services, such as consulting or accounting, within the UAE.
Once you have decided on the type of license you will need, you will need to approach the respective authorities and apply for the license. The application process will usually involve several steps, and each authority may have its own set of rules and regulations which need to be adhered to.
2. Getting a Trade Name (TM)
Once you have obtained your business license, the next step in the business permits and approvals process in the UAE is to register a trade name (TM). This is important as it will be used on all your official documents and will be the public face of your company.
When registering a TM, you will need to submit your company’s Articles of Association, company details, and any other regulatory documents which the relevant authorities may require. The process can take up to two weeks depending on the authorities, but once the TM has been registered, it will be valid for five years and can be renewed if necessary.
3. Obtaining a Business Bank Account
Once you have registered your trade name and obtained your business license, the next step in the business permits and approvals process in the UAE is to open a business bank account. This is important as it will be used to manage the finances of your company.
When opening a business bank account, you will need to provide proof of your business license, trade name, and other documents such as share certificates and Articles of Association. Most banks will require a minimum deposit, so it is important to budget for this.
In addition to the fees associated with the process, banks in the UAE also have certain requirements which need to be met as part of the process. Depending on the bank, this can involve completing an application form and providing additional documents such as a passport copy and utility bills.
4. Registering for VAT
Once you have registered a TM and opened a business bank account, the next step in the business permits and approvals process in the UAE is to register for Value-Added Tax (VAT). This is a government-mandated tax, and businesses wishing to do business in the UAE must obtain a VAT registration.
The process for obtaining a VAT registration is fairly straightforward and you will need to submit your company details and other relevant documents to the Federal Tax Authority (FTA). The process of applying for a VAT registration typically takes only a few days and once approved, you will receive your VAT registration number which must be displayed on all invoices and receipts.
5. Getting Trade Licenses
Finally, the last step in the business permits and approvals process in the UAE is to obtain trade licenses. Depending on the type of business you are operating, you may need to obtain one or more trade licenses in order to abide by the regulations set out by the relevant authorities.
The process for obtaining a trade license varies according to the type of business and the concerned authorities. Generally, you will need to provide company documents as well as a business plan and proof of your business license. The process can take anywhere from a few days to a few weeks, so it is important to apply as soon as possible.
We will introduce the employment laws and the labour laws of the UAE in our next article.
Meantime, if you have inquiries related to business set up in the United Arab Emirates and the laws, you can email me at email@example.com where our team of UAE lawyers can further assist you with company formation and all matters related to it.