Expanding businesses: How to add activities to a UAE trade license

The United Arab Emirates (UAE) goes beyond just being one of the leading economies among Gulf Cooperation Council (GCC) countries. Moreover, the 2020 World Bank’s Ease of Doing Business Report showed that it also ranked first in the region in terms of having a business-friendly environment. Globally, it secured the 16 spot. It comes as no surprise that many businesses would want to have a UAE trade license.

The importance of a trade license

According to S&P Global estimates, the UAE’s gross domestic product (GDP) will rise by 3 percent this 2023. It will continue to rise, hitting a four-percent growth next year. The primary driver? The non-oil sector, whose boom will be anchored in technological advancements, tourism and various government initiatives.

Among the priorities of the UAE government is to boost the small and midsize enterprise (SME) sector. Currently, it represents over 94 percent of all companies in the country. These SMEs employ 86 percent of the country’s private workforce. In Dubai, the financial capital state of the UAE, SMEs comprise 95 percent of companies, provide jobs to 42 percent of the workforce and contribute 40 percent to the GDP.

According to Minister of Economy Abdullah Al Marri, the UAE targets to have 1 million SMEs by 2030 in a bid to boost the sector’s economic impact. This is why the government has been introducing initiatives to streamline the process of establishing a business in the country.

In the UAE, one of the legal requirements to operate a trading business is to secure a trade license. Beyond being a legal recognition, this license builds credibility and opens avenues for businesses to tap into local markets, ultimately expanding reach and boosting revenue. It also doesn’t only foster trust among customers but also attracts partners and investors. 

Read: 6 ways to improve your business with brand positioning

Operating without a license in the UAE will have a penalty worth over $1,360. If not renewed, the fine is $68. Other consequences include potential blacklisting and having employee and sponsor visas canceled.

Adding activities to your UAE trade license

Getting a trade license in the country is a gateway to regional — and even global — expansion. However, the journey doesn’t end in acquiring this document. As businesses evolve, the need for additional services arises. Therefore, an entity must get an updated UAE trade license that reflects the new activities that the business will do. 

Here’s a quick and comprehensive guide on how to expand your business by adding activities to your license.

1. Enlist help from a reputable company

Regulations for trade license amendments may vary between licensing authorities and business zones. Additionally, third-party approvals may be necessary for certain business license amendments. For instance, if a particular economic activity is heavily regulated by a specific government department, you must obtain approval from that department.

To help you manage the application process more efficiently, consider getting help from companies like Trade Licensing Zone. These businesses have dedicated consultants and staff members who will guide you through the documentation required by various UAE government authorities and agencies related to your activities.

2. Get initial approval from the economic development department

To formally begin adding business activities to your license, you must first seek initial approval from your emirate’s economic development department. In Dubai, this is the Department of Economic Development (DED). In Abu Dhabi, it is the Abu Dhabi Department of Economic Development (ADDED). 

3. Fill out an application form

After obtaining initial approval, the next step is to complete and submit the form for amending a trade license. Typically, you’d need to include the signatures of your business’s directors and shareholders.

To obtain the form, reach out to local licensing authorities. Alternatively, you can get help from the business setup company you’ve teamed up with.

4. Acquire a No Objection Certificate (NOC)

This is an essential legal document in the UAE stating that the issuer has no objection to the holder in terms of conducting specific business activities. This informs various parties that the holder can add activities to its trade license.

5. Formalize it on paper

This step involves completing an addendum from a legal translator for an LLC Agreement. Then, a Notary Public must attest to it at the economic development department. Additionally, your company is required to execute a Court Agreement at the Notary. 

6. Submit required documents

The necessary documents you must submit include your original trade license and registration certificate along with a duly completed application form. You must also submit the following:

• A copy of your company’s office space lease contract 
• An initial approval certificate for your company’s name from the UAE’s Registry Office
• Permission from the economic development department
• A No Objection Certificate
• An attested amendment to the LLC Agreement and Court Agreement
• An amendment to the Memorandum of Association (MoA) that states the additional activities to your license

If applicable to your company, you must further provide the parent company board resolution authorizing the addition of activities to the trade license.

7. Receive your new trade license

Once the the economic development department approves your application, you will receive notifications to submit payment for your new trace license. This finalizes the addition of activities to your trading business.

Final thoughts

While adding activities to your UAE trade license can be a standalone process, you can also complete it while you renew your existing license. Apart from modifying business activities, you can also change your trade name, authorized capital and business address when renewing.

Whatever path you choose, you must ensure that the activities you will add are aligned with your current business structure and license. Once completed, you can now legally expand your operations and, ultimately, enhance your business’s growth potential.

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