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What is the Difference Between Trade License and Commercial License

what is the difference between trade license and commercial license

Embarking on a business venture in the United Arab Emirates (UAE) necessitates the understanding of various licensing terms, primarily the “trade license” and “commercial license”. These terms are often used interchangeably, however, they entail different meanings. Getting a firm grasp of these differences is vital for anyone planning to establish a business in the UAE, especially when trying to answer the question – ‘what is the difference between trade license and commercial license’. Here, we delve into each term to clarify their specific representations:

What is the Difference Between Trade License and Commercial License

Trade License

In a broad sense, a trade license is an official permit issued by a governing authority, which authorizes individuals or corporations to conduct business activities within a specified jurisdiction. This mandatory license applies to all kinds of businesses, regardless of the sector or the nature of the operations. A trade license legitimizes a business, affirming its compliance with the laws and regulations of the UAE. Operating a business without a valid trade license in the UAE is deemed illegal.

Commercial License 

Contrarily, a commercial license is a subtype of a trade license. The government of UAE issues various categories of trade licenses based on the nature of the business activity being conducted. The three primary types of trade licenses in the UAE are commercial, professional, and industrial. Specifically, a commercial license is required for businesses engaged in any form of trading activity. Whether a company intends to trade in goods or provide specific kinds of services, it is obligated to secure a commercial license.

The core difference rests on the understanding that while every business must acquire a license, a commercial license is expressly for businesses engaged in trading activities.



How Can Choose UAE Help

The landscape of business licensing in the UAE can be intricate, particularly for novice entrepreneurs or foreign investors. This is precisely where Choose UAE proves its value. Our team of seasoned consultants simplifies the process by explaining the different types of licenses and assists you in choosing the one that aligns best with your business activities. We are committed to ensuring your business setup in the UAE is streamlined and straightforward. Choosing Choose UAE means gaining a reliable partner, dedicated to the successful establishment and growth of your business.

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