Why Do You Need A Trade License In Abu Dhabi?

24th June 2019

To be doing business legally in Abu Dhabi and Dubai it is necessary to have a business presence with a trade license.

Showing your commitment to doing business in Abu Dhabi and Dubai

As business in Abu Dhabi and Dubai is very relational, people will spend time getting to know you and trust you before doing business with you. They will want the confidence that you are committed to doing business in Abu Dhabi and Dubai for the long term and not someone who is here today and gone tomorrow. Meetings can be organised very last minute, so its always handy if you can juggle your diary to make time for someone you are wanting to do business with. If people can easily meet with you it builds the relationship much quicker. In this part of the world, emails and phone calls just don't build the relationships. Business is done face-to-face. Having a business and trade license, which enables you to be on the ground here makes relationship building much easier and ultimately you'll start to win work more quickly.

To get a local business address you need a trade license

Business cards are still handed out freely in Abu Dhabi and Dubai and if you can show Abu Dhabi or Dubai contact details because you have a business with a trade license here, you will be taken a lot more seriously. To be able to lease an office space or arrange a virtual office it is necessary to have a business with a trade license here.

To have a local corporate bank account you need a trade license

A business with a trade license is required in order to open a local corporate bank account. Many companies will only make local payments for invoices, not international transfers, so a local account is really important. Furthermore, if your organisation is intending to work with a government or quasi-government entity, they will only pay into local bank accounts and these must have the same name as that on the contract, they wouldn't for example pay into a personal account. So its important to organise a business and obtain your trade license so that you can open a local corporate bank account and get paid!

Tendering for projects you need to at least commit to getting a trade license

If your organisation is tendering for a government project but doesn’t yet have a presence in the respective Emirate, there is usually a clause which the foreign entity is required to accept and sign whereby they agree to establish a local company and get a trade license if awarded the project. If this is the case, then it is advisable to get prepared in advance because once the contract is awarded, you will be expected to have the company formation well underway and the assignment will be all systems go! At that point you'll be wanting to focus on the assignment rather than worrying about getting your business setup, trade license issued and staff visa'd.

It's also worth being aware of the commitment to have a business in Abu Dhabi or Dubai before submitting your tender so your organisation can ensure that costs are covered and the commitments that go with it are fully understood and planned for. Don't let this put you off - it is a level playing field because every other company tendering will be in the same position that if they aren't already operational here, then will need to setup a business in Abu Dhabi or Dubai to fulfil the tender.

Getting registered in government departments you need a trade license

Companies delivering products and services to the government are required to be registered with the Ministry of Finance, which in turn requires them to have a business in the UAE and a trade license.

To have staff working in the UAE your organisation needs a trade license

To have staff working in Abu Dhabi or Dubai, whether your organisation is hiring locally or relocating expatriate staff from overseas, a trade license is necessary. Once the business is setup in Abu Dhabi or Dubai it will be able to register with the General Directorate for Residency & Foreign Affairs (GDRFA) as well as the Ministry of Human Resources & Emiratisation (MOHRE) in order to apply for work permits and visas for its staff. Everyone living and working in Abu Dhabi or Dubai is required to have a visa. Working in Abu Dhabi or Dubai without a visa will result in penalties. So to have people operational on the ground, your organisation will need to be registered in Abu Dhabi or Dubai with a trade license.

Conclusion

You need to have a trade license to be doing business in Abu Dhabi or Dubai. By not having a commercial presence and correctly visa’d staff in Abu Dhabi or Dubai, an organisation is operating at risk for many reasons including but not limited to: employees being at risk; lack of insurance; risk of not being paid; risk of fines; closure of whatever local operation exists; and, deportation of in-country staff without visas.

To get compliant, be able to register as a vendor with government departments and employ your staff in Abu Dhabi and Dubai, connect with Gateway Group. We can manage the company formation so that you can focus on your business, we offer a unique selection of local sponsor packages so you can choose which most appropriately suits your requirements, and we can help with getting work permits and visas for your employees and dependents, so they can live and work legally here. To get started with your Abu Dhabi or Dubai company formation, contact Gateway Group by emailing us: info@GatewayToUAE.com