A commercial trade licence permits you to buy and sell goods. It is the most widely issued licence type in Dubai, and the one where activity selection matters most — because what you may legally invoice for is limited to the specific activities printed on it.
What a commercial trade licence Dubai covers
Trading activity: importing, exporting, distributing, wholesaling and retailing physical goods. It is issued by the Department of Economy and Tourism for mainland companies, or by the relevant authority for free zone entities.
The distinction from other licence types is the nature of what you sell. A professional licence covers services and expertise. An industrial licence covers manufacturing. A commercial licence covers goods that already exist, moving through your hands.
Activity selection is the whole game
Your licence lists specific activities, and you may only invoice for what appears on it. This causes more practical difficulty than any other formation decision.
A licence covering "foodstuff trading" does not cover trading in kitchen equipment. The activities sound adjacent to a founder and are entirely separate in the activity list.
Two failure modes recur. Choosing too narrowly, so part of your revenue sits outside licensed scope — which is a licensing problem, a banking problem when the invoice does not match the licence, and a presentation problem in your corporate tax return. Or assuming a broad-sounding activity is a catch-all, which it is not.
Adding activities later is possible but costs fees and time. Spend the extra hour at the outset.
Mainland or free zone commercial licence
A mainland commercial licence lets you sell directly to UAE customers anywhere in the country. A free zone commercial licence is cheaper but restricts direct mainland trade — you generally need a distributor or a mainland entity to serve that market.
The tax consequence is the part that decides it. Revenue from mainland UAE customers is generally not qualifying income for a Qualifying Free Zone Person, and exceeding the de minimis threshold costs 0% status on everything. Our guide to mainland versus free zone works the decision through properly.
What it costs
- Mainland commercial licence — commonly AED 15,000 to 24,000 before office and visas
- 5% market fee on annual office rent, plus Ejari at about AED 220
- Sustainability fees — roughly AED 500 to 1,500
- Free zone commercial licence — from around AED 11,900 at zones such as IFZA or Meydan
- Each visa — roughly AED 3,500 to 5,500 including medical and Emirates ID
Full breakdown, including what the advertised packages leave out, in our Dubai setup cost guide.
The formation process
- Activity selection and jurisdiction decision, tested against the tax position
- Trade name reservation under UAE naming rules
- Initial approval from the licensing authority
- Premises — tenancy and Ejari for mainland; flexi-desk or unit for free zone
- MOA notarisation where applicable
- Licence issuance
- Establishment card, then visa guidance
- Corporate bank account — file prepared during formation
Customs registration for importers
If you will import goods, you need a customs client code alongside the licence. Without it, shipments cannot clear in your name.
Goods moving from a free zone into the UAE mainland attract customs duty and clearance, and require a mainland importer or distributor arrangement. Businesses that plan to serve UAE customers directly should model duty and the qualifying income consequence together before choosing a jurisdiction.
VAT registration for traders
Trading businesses reach the mandatory VAT registration threshold faster than service businesses, because turnover is gross rather than margin. A distributor turning over AED 5 million on thin margin is well past the threshold despite modest profit.
Register on time. Late registration carries penalties, and your auditor will reconcile filed VAT returns to audited revenue — a mismatch there is among the most common FTA audit triggers.
Annual obligations
Licence renewal, corporate tax registration and filing, VAT returns quarterly or monthly, maintained bookkeeping, and audited financial statements where your free zone or your 0% claim requires them.
Trading businesses carry a particular bookkeeping burden because of inventory. Count stock at year end and keep the sheets — a missed count cannot be fixed retrospectively and leads directly to a qualified audit opinion.
Frequently asked questions
Commercial covers buying and selling goods. Professional covers services and expertise, and typically allows full foreign ownership more readily.
Yes, subject to approval and fees. It is cheaper to select adequately broad activities at formation than to amend afterwards.
If you import goods, yes. Shipments cannot clear in your name without one.
Not directly in most cases - you need a distributor or mainland entity. That revenue is also generally non-qualifying for corporate tax.
At the mandatory threshold, measured on turnover rather than profit. Trading businesses reach it faster than service businesses.
Three to seven working days for a straightforward free zone licence. Mainland takes longer once tenancy, Ejari and approvals are included.
Getting started
Send us a list of what you will actually buy and sell, and who your customers will be. Activity selection and jurisdiction follow from that, and both are cheaper to get right than to fix.