Wondering whether you need to get a business license if you are hiring an office in Dubai? It is a frequently asked question for entrepreneurs taken up by international businesses who want to start in the city. You can save a lot of time and effort if you know the rules and regulations regarding office rentals in Dubai. A business license is a requirement in most instances, but there are exceptions. Here’s a look at when you need to get a license and what to do next.
Why Do You Need a Business License to Rent an Office in Dubai?
Dubai’s government does not allow any business entity to start and begin working without following the law and registering with them. A business license is an official permission to do business within the city. Here are some key reasons why you need a license:
- Legal Compliance – Doing business without a proper business license can put you at risk of facing penalties, fees, or legal action.
- Lease Agreement Requirement – A majority of landlords and business centers will ask for a business license before renting out office space.
- Visa and Residency Benefits – A business license enables companies to sponsor employee visas, which is a prerequisite for hiring employees.
- Banking and Financial Transactions – A trade license is required to open a corporate bank account in Dubai. Get details about Office Spaces for Rent in Business Bay Dubai.
Types of Office Spaces and License Requirements
Depending on the location and model of lease, it is also important to know the licensing requirements, as Dubai has office spaces.
Mainland Office Spaces
If you intend to rent an office on the mainland, a business license is a requirement. The mainland businesses are licensed by Department of Economic Development (DED). As part of the registration process, a physical office is usually needed.
Free Zone Office Spaces
More flexibility for businesses in free zones. You can register without renting a physical space via virtual office options offered by some free zones. However, the majority do still need a business license before renting an office space. Popular free zones include:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Silicon Oasis (DSO)
- Jebel Ali Free Zone (JAFZA)
Co-Working Spaces and Virtual Offices
However, co-working spaces and virtual offices suit startups and freelancers a lot better. Some companies will even allow you to rent their space without an active trade license, but if you plan on running a legitimate operation, we suggest applying for a license.
Steps to Get a Business License in Dubai
How to get a business license if you need one before renting an office?
- Choose a Business Activity – Choose the type of business you want to operate as different types of activities need different types of licenses.
- Select a Business Location – Whether to work on a free zone or the mainland.
- Register Your Company Name – Select a unique name for your company and register it through the appropriate authorities.
- Apply for a Business License – Application must be submitted to either the Department of Economic Development (for mainland businesses) or the relevant free zone authority.
- Obtain Approvals – Certain businesses need to get additional approvals from government departments.
- Receive Your License – When your application is approved, you will get your business license, which will enable you to legally rent office space. Get details about Office Space for Startups in Dubai.
Are There Any Exceptions?
Some individuals and freelancers can rent office space without needing a business license. For example:
- Freelancers with Permits – Certain free zones provide free zone permits that give the right to use shared office spots.
- Short-Term Office Rentals – Some business centers will provide temporary office space rentals without the necessity for a business license.
- Business Setup Services – Some vendors will let companies do this from a virtual office while they go through the licensing onboarding.
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Please note that the above is commonly valid for long-term leases and acquiring an office in Dubai typically comes with a business license. No matter if you choose a space on mainland, free zone, or co-working, having a valid license will allow you to operate smoothly and in accordance with the law. For those who are ready to set up business in Dubai, obtain the right license and secure the perfect office space.
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F.A.Q
In general, yes you need a business license to lease an office space in Dubai. Most landlords and business centers require you to have a valid trade license before they can lease office space to you.
Others are co-working spaces that will rent a desk to a person and freelancer without requiring a business license. But having a studio license is advisable for business purposes.
Yes in the free zones a trade license is required before getting an office for rent. Virtual offices with licensing packages are available in some of the free zones.
And there are business centers and free zones that can provide you temporary office space until your business license is done. But you’ll require a valid license for long-term lease.
Depending on the nature of your commercial operations the type of license may vary. A DED (Department of Economic Development) license is required for mainland businesses, and a license from the respective free zone authority for free zone companies.
