Business License Types in Dubai Explained: Which One Do You Need?

If you’re planning a Business Setup in Dubai, understanding the different types of business licenses is one of the most important first steps.

A business license isn’t just paperwork, it’s your legal permission to operate, determining what activities you can carry out, where you can operate, and even the benefits you’ll receive.

Dubai offers different types of business licenses depending on your activity, location, and business model. Choosing the wrong one could mean delays, extra costs, or legal issues later.

This guide explains the main types of business licenses in Dubai, their uses, costs, and which one might be right for your business.

What Is a Business License in Dubai?

A business license in Dubai is a legal document issued by the Department of Economy and Tourism (DET) for mainland businesses or by free zone authorities for companies in free zones. It defines:

• The type of activities your business can perform
• The jurisdiction in which you can operate
• The rules and benefits your company is entitled to

Without the right license, you cannot legally run a business in Dubai.

What Are the Main Types of Business Licenses in Dubai?

1. Commercial License

Best for: Trading, retail, logistics, and import/export companies.

• Allows buying, selling, and trading goods within the UAE or internationally.
• Popular with businesses involved in e-commerce, general trading, and wholesale distribution.
• Can be obtained on the mainland or in free zones.

2. Professional License

Best for: Service-based businesses and professionals.

• Covers activities like consultancy, marketing, IT services, design, and education.
• Ownership: Allows 100% foreign ownership in most cases.
• Ideal for entrepreneurs who provide services rather than selling products.

3. Industrial License

Best for: Manufacturing and production companies.

• Required for activities such as food processing, textiles, metal works, and equipment manufacturing.
• Usually needs approvals from additional government bodies (e.g., Dubai Municipality).

4. Tourism License

Best for: Travel, hospitality, and entertainment sectors.

• Needed for travel agencies, tour operators, hotels, and event management companies.
• Issued by the Dubai Department of Economy and Tourism in coordination with other tourism authorities.

5. Freelance Permit (Special Category)

Best for: Independent professionals in media, technology, education, and creative industries.

• Allows individuals to operate under their own name without setting up a full company.
• Available in many free zones like Dubai Media City and Dubai Internet City.

How to Choose the Right Business License in Dubai?

When selecting from the different business licenses in Dubai, consider:

1. Your business activity – DET and free zones have specific activity lists.
2. Where you want to operate – Mainland vs. free zone rules differ.
3. Ownership preferences – Some licenses allow 100% foreign ownership; others may require a local partner.
4. Visa requirements – The number of visas you need affects the type of license and office space requirements.
5. Budget – Some licenses are cheaper in free zones, while mainland licenses offer broader access.

Costs of Business Licenses in Dubai (2025 Overview)

License costs vary depending on the activity, jurisdiction, and additional approvals needed. On average:

• Free zone license: AED 7,500 – AED 25,000
• Mainland license: AED 10,000 – AED 35,000 (excluding office rent)
• Special approvals (e.g., from health, education, or tourism authorities) can add to costs.
  
  [ Note: Startup works starts packages from AED 4,999 ]

Steps to Get a Business License in Dubai

1. Decide your business activity – Check the approved activity list from DET or your chosen free zone.
2. Choose a jurisdiction – Mainland or free zone.
3. Select a legal structure – LLC, sole proprietorship, branch, etc.
4. Reserve a trade name – Must follow naming guidelines.
5. Apply for initial approval – From the relevant authority.
6. Secure additional approvals – For regulated activities (e.g., medical, tourism).
7. Pay license fees & collect license – After submission of all documents.

Common Mistakes to Avoid

• Choosing the wrong license for your activity
• Ignoring the visa quota linked to your license type
• Not budgeting for renewal costs
• Assuming all licenses allow trading in the mainland market
• Skipping special approvals when needed

Which License Offers the Best Value?

If you need:

• Broad market access – Choose a mainland commercial license
• Low-cost entry – Consider a free zone professional license
• Specialized services – Pick a sector-specific license (e.g., tourism)

FAQs: Business Licenses in Dubai

Q1: How long does it take to get a business license in Dubai?
Usually 3–10 working days, depending on activity and approvals needed.

Q2: Can I upgrade or change my license later?
Yes, you can amend your license to add or change activities, but extra fees apply.

Q3: Do all licenses allow me to work anywhere in Dubai?
No. Free zone licenses generally restrict you to that zone unless you work with a local distributor.

Q4: What happens if I operate without a license?
You may face fines, closure of your business, and legal penalties.

Conclusion

Understanding business licenses in Dubai is essential for setting up a company that’s both compliant and successful. The right license saves you time, money, and legal trouble in the long run.

If you’re ready to move forward, choosing the right license is just one step in your Business Setup in Dubai journey. Our experts at Startup Works can guide you through the entire process, from license selection to final approvals.