UAE is a land where businesses prosper and establish a name for themselves. However, starting or running businesses or business offices in the emirates requires strict adherence to legal compliance, including obtaining a legal license. Professional and commercial licenses are the two most commonly acquired licenses and Dubai, as it’s both easier and cheaper to acquire. This article will focus on giving a comprehensive differentiation between a professional & commercial DED license.
The main takeaway
In short, the main difference between a commercial and professional DED license is that a commercial license is issued to a business that conducts any commercial/ trading activities or physical services. Meaning this license is free from any expertise or educational qualifications. Examples of businesses that require a commercial license include general trading, specialized trading, healthcare transportation, real estate, etc.
In contrast, a professional license is more of a service-oriented license that is issued to individuals or professionals who meets the requirements of a certain area of expertise, craftsmanship or upholds a specific educational qualification. A professional license is issued to people whose business or activity depends on the individual’s expertise, skills, mental and intellectual capacities, academic achievements, or scientific talents.
Below are some key criteria that differentiate commercial and professional licenses.
Ownership – For commercial license, an expat or foreigner can own 49% of the shares, with the rest owned by a UAE national or any other local service agent. For a professional license, an expat can become the sole owner by owning all 100% ownership.
Share capital – The minimum share capital for a commercial trade license and a professional trade license are DHS 300,000 and DHS 150,000, respectively.
Government license fees – Generally, the commercial trade license fees are higher than professional trade license fees.
Liability– Commercial trade license is subject to limited liabilities. In contrast, a professional license is subject to unlimited liability. But a professional license holder can switch to a limited liability status by changing the suffix to LLC. However, this change will also require the ownership to be divided between an expat and a UAE national.
Documents required
Commercial license
- Application form
- Copies of passports of every shareholder legally connected to the business
- A detailed explanation of the type of business plan and activities expected to be conducted.
- A minimum of two years of reference certificate of financial statement
- A no-objection certificate from the sponsor
- Letter of intent
- Notarized copy of registry identification form
- A passport-size latest photograph of either the manager or the director of the business
Professional license
- Application form
- Copies of passports (This includes owners and all other partners)
- A copy of the “Naturalization Book Of Local Partners” – Jinsiya
- If the expatriate is already on a work visa, then a “No Object certificate” from international partners or sponsors is requested.
- If the shareholder is on a visit visa, then the UID number is requested.
- A primary approval proof by the competent authority. This usually depends on the type of business operations that are to be conducted.
- Ejari registration, a rental contract, and name registration certificate
- A detailed description regarding the shared capital of the business
At myOffice business centre, we understand that starting a business is both exciting and daunting at the same time. We offer prestigiously located business centres, workspace solutions, and a range of other services to help our clients manage their business operations successfully. We also have a dedicated licensing department that can handle all the aspects of licensing for a business to operate in Dubai legally.
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