Definition
A trade licence is an official government authorization permitting an individual or business entity to engage in specified commercial activities within a defined jurisdiction. The licence establishes the legal scope of permitted operations, including the categories of goods and services the holder may provide. Operating without a valid trade licence constitutes a legal violation subject to fines, penalties, and potential business closure.
UAE Context
In the UAE, trade licences are issued by the Department of Economic Development (DED) for mainland businesses or by the relevant free zone authority for free zone entities. Three primary categories exist: commercial licences for trading activities, professional licences for services and consultancies, and industrial licences for manufacturing. Each licence specifies permitted activities, and companies may add or modify activities with regulatory approval. Annual renewal is mandatory, and a valid licence is required to open corporate bank accounts, sponsor employee visas, and lease commercial premises.
Key Facts
| Item | Detail |
|---|---|
| Issuing authorities | Emirate DEDs (mainland), free zone authorities |
| Main categories | Commercial, professional, industrial |
| Validity | One year, renewable annually |
| Prerequisites | Trade name approval, initial approval, lease agreement |
| Digital platforms | Dubai Invest, Abu Dhabi TAMM, Sharjah Investment Services |
Vision 2031 Relevance
Streamlining trade licence issuance is a key component of Vision 2031’s ease-of-doing-business reforms. Same-day issuance, digital licensing portals, and activity bundling reduce barriers for entrepreneurs and multinationals, reinforcing the UAE’s competitiveness among the world’s most business-friendly economies.