Types of company licenses in the UAE : Mainland, Free zone & Offshore explained

In the UAE, business licenses are issued based on two factors:

1. Business activity (what you do)

2. Jurisdiction (where you operate)

Licenses are issued by:

• Department of Economic Development (DED) for Mainland businesses

• Free Zone Authorities (RAKEZ, IFZA, DMCC, ADGM, etc.)

• Offshore Registrars for international structures

1. Commercial license (Trading license)

Best for: Buying, selling, importing, exporting, or distributing goods

A Commercial License is required if your business involves physical or digital trade.

Common activities include:

• General trading

• Import & export

• Wholesale and retail

• E-commerce product sales

• Distribution businesses

Where it’s issued: Mainland & Free Zones  Tax considerations: VAT often applies; Corporate Tax depends on structure

Ideal for founders planning scale, inventory movement, or regional trade.

2. Industrial license (Manufacturing license)

Best for: Manufacturing, production, processing, assembly

If your business transforms raw materials into finished or semi-finished goods, an Industrial License is mandatory.

Examples:

• Factories

• Food processing units

• Packaging & assembly plants

Key requirements:

• Physical facility or warehouse

• Approvals from industrial and environmental authorities

• Higher compliance and inspection standards

Suitable for long-term manufacturing operations, not lean startups.

3. Professional / Individual license

Best for: Service-based and expertise-driven businesses

A Professional License allows individuals or companies to offer services based on skill, qualification, or experience.

Examples:

• Consultants

• Marketing agencies

• IT & software services

• Accountants, auditors, designers

• Freelancers and solopreneurs

Advantages:

• 100% foreign ownership (Mainland & Free Zone)

• Lower setup complexity

• Flexible structure for founders

The most popular choice for service founders and remote-first businesses.

4. Freelance license

Best for: Individuals working independently

A Freelance License allows you to operate without forming a full company.

Common professions:

• Designers

• Writers

• Developers

• Media professionals

Limitations:

• Restricted to approved activities

• No hiring employees

• Income ceiling may apply

Ideal as a low-cost entry point, not for scaling businesses.

5. E-Commerce license

Best for: Online-only businesses

An E-commerce License enables trading of goods or services through digital platforms.

Important note:  E-commerce is not a standalone category everywhere—it often falls under Commercial or Professional licenses depending on activity.

Applies to:

• Online stores

• Digital marketplaces

• Subscription platforms

Tax compliance (VAT & Corporate Tax) still applies despite being online.

6. Tourism license

Best for: Travel, hospitality, and tourism services

Examples:

• Travel agencies

• Tour operators

• Event and destination management companies

Requirements:

• Tourism authority approvals

• Insurance and compliance checks

• Activity-specific conditions

Best for founders entering hospitality or experience-based sectors.

7. Educational license

Best for: Education and training businesses

Required for:

• Training institutes

• Educational consultancies

• Coaching centers

Often requires approvals from education regulators in addition to licensing authorities.

8. Media license

Best for: Media, content, and creative industries

Examples:

• Advertising agencies

• Media production houses

• Influencers and content creators (in specific zones)

Issued mainly by sector-focused Free Zones.

9. Agricultural & crafts licenses

Issued for:

• Farming and agricultural activities

• Craft-based manufacturing and traditional trades

These licenses are activity-specific and subject to local authority approvals.

Issued by: Department of Economic Development (DED)

Key benefits:

• Trade anywhere in the UAE

• Government and local contracts

• Physical office flexibility

Best for: Businesses serving the UAE local market directly.

Issued by: Free Zone Authorities (RAKEZ, IFZA, DMCC, etc.)

Key benefits:

• 100% foreign ownership

• Profit repatriation

• Simplified setup

• Sector-specific licenses (Tech, Media, Healthcare)

Limitations:

• Mainland operations require approval from the relevant mainland authority

Best for: International operations and asset holding

Use cases:

• Holding companies

• IP ownership

• Wealth and asset protection

Cannot conduct business inside the UAE.

Typically includes:

• Initial approval receipt

• Passport copies of shareholders

• Lease agreement (Ejari / Free Zone facility)

• Memorandum of Association (MOA) or Service Agent Agreement

• Additional regulatory approvals (if required)

License fees must be paid within 30 days of approval, or the application becomes void.