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UAE Considers 10-Year Golden Trade Licence

by Violet Dawson
0 comment

The proposal for extended business licenses aligns with recent reforms aimed at enhancing the UAE’s business environment. Allowing foreign investors 100% ownership was a significant step that led to a surge in new businesses and investments in the country.

The UAE is considering extending business licenses to durations of up to 10 years, a move that could notably transform the corporate sector in the country. While some free zones and emirates already offer multi-year licenses, extending them to 5- or 10-year periods would mark a significant shift.

Businesses usually receive 2- or 3-year licenses on a case-by-case basis. This will often be tied to the length of their rental agreements. Some leading free zones have offered extended licenses of up to 3 years as part of special promotions. Atik Munshi, Managing Partner at the consultancy Finexpertiza UAE states “Leading UAE free zones have allowed taking out extended licenses for up to 3 years in such cases as part of special promotions.”

“In such instances, the company and the free zone authority both benefit – the company saves itself the trouble of the yearly renewal and the other requirements. And the free zone authority is able to collect the multi-year license renewal fees in advance,” he added.

Depending on the free zone, businesses choosing multi-year renewals may also enjoy discounts compared to annual renewals. Similarly, some emirates on the mainland offer multi-year licenses, mainly for “generic licenses.”

Recently, discussions have begun about the possibility of introducing a “golden” business licensing program. This will offer 10-year licenses and a “silver” option for 5-year licenses. Even if it is still in the early stages, such a move could repeat the success of the UAE‘s Golden Visa residential program, which grants 10-year visas to investors with important property investments.

The Golden Visa program has attracted large investments and secured residents in the country. This has helped in contributing to economic growth and stability. Extending similar benefits to businesses could further boost the UAE’s appeal as a global business hub. In the initial phase, the Golden Visas were issued with invitations, and they gradually extended to wider categories of individuals, inviting fresh new bigger investment opportunities. 

Multi-year licenses could provide long-term cost savings and greater clarity and consistency in planning for the nearly 800,000 licensed entities in the UAE. A longer licensing tenure promotes stability and enables businesses to undertake longer-term strategies aligned with the UAE’s economic vision for 2031.

The proposal for extended business licenses aligns with recent reforms aimed at enhancing the UAE’s business environment. Allowing foreign investors 100% ownership was a significant step that led to a surge in new businesses and investments in the country.

Providing clarity and certainty to business owners reaffirms their rights and strengthens the UAE’s position as a preferred destination for investment. The potential introduction of a golden and silver trade license program could further bolster investor confidence and attract more investment to the UAE.

Businesses value certainty in tenure, status, and setup costs, which encourages long-term planning and investment. A trade license program offering extended durations could have a positive and lasting impact on the UAE’s economy, similar to the success of the Golden Visa program.

UAE’s consideration of expanding business licenses to 5- or 10-year durations shows its commitment to fostering a favorable business environment and attracting investment. By providing clarity, stability, and long-term planning opportunities, such a move could further strengthen the UAE’s position as a global business hub.

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