What will happen when doing business without a license in the UAE?

06 / 08 / 2020

Any commercial activity is strictly prohibited on the territory of the UAE without an appropriate license. If you are a business owner, then you must have a license. For some types of activities, obtaining a license implies the prior receipt of additional permits. For example, these types of activities can be medicine, finance, publishing, printing, food sales. If your business is in one of the areas mentioned, then additional permissions from the government and special agencies are required. But for a general or standard license, additional permissions are not required, and the process of obtaining is much easier.

Today, there are 3 types of licenses, without which you cannot carry out any activity. These types of licenses cover three main areas for any business. So:

1 - Industrial license - for companies planning to engage in production, or any other industrial activity.

2 - Commercial license - for trading companies.

3 - Professional license - this type of license is intended for companies providing professional services, as well as for craftsmen.

What are the risks of doing business without a license?

We have already mentioned that in the UAE each company must be licensed, otherwise, you will be considered as a person carrying out illegal activities. The fine can vary from different circumstances and ranges from 5 thousand to 50 thousand dirhams (1.400-14000 $). Also, there is a high probability of receiving a ban on the continuation of the activities carried out. In the United Arab Emirates, it is considered illegal to sell without a legal entity. A private person is not allowed to carry out trading activities.

In some cases, shareholders or company managers, when operating without a license ,can not only received a fine, but also a prison sentence. The cost of a license for a period of one year is approximately 25 thousand dirhams ($ 7,000).

Many people are interested in doing freelance activities. In Dubai, this type of activity is also prohibited without a license.

The conditions for assisting businessmen in starting their business in the UAE are getting better and better every day. For these purposes, the Department of Economic Development was established. Thanks to his work, there are no lengthy processes of administration and registration of a business, but on the contrary, this procedure takes place very quickly and at lower costs.

In the United Arab Emirates, you can register both a local company and a company in more than 50 free economic zones.