Dubai – The UAE is poised to revolutionize its business landscape with the introduction of a potential 10-year ‘Golden’ trade license, a move that could significantly alter the corporate environment for companies operating in the country. This initiative, still in its early stages, could extend business licenses up to a decade, offering unprecedented stability and long-term planning opportunities for businesses.
The Future of Business Licensing in the UAE
While some free zones and emirates in the UAE already offer multi-year business licenses, typically for 2 or 3 years, the proposed 10-year license under the ‘Golden’ business licensing program would elevate the corporate framework to a whole new level. Currently, longer-term licenses are often tied to extended rental agreements or offered as part of special promotions. For example, leading free zones have been known to provide licenses valid for up to 3 years, benefiting both the companies, by reducing the hassle of annual renewals, and the free zones, by collecting renewal fees in advance.
This move towards multi-year licenses isn’t entirely new. Some emirates on the mainland also offer multi-year licenses, but these are usually restricted to ‘generic licenses’. However, the potential introduction of a 10-year license, and a 5-year ‘Silver’ license, as discussed on March 27, 2024, could transform how businesses approach licensing, offering substantial cost savings and greater predictability.
Drawing Inspiration from the Golden Visa Program
The concept of long-term licenses is inspired by the success of the UAE’s ‘Golden Visa’ program. Initially launched to attract investors with property investments of Dh2 million or more, the Golden Visa has expanded to include a wider range of individuals, creating a surge in investments and anchoring long-term residency in the UAE.
This trade license initiative could similarly attract a new wave of investment, particularly if it follows the same principles of clarity and security that made the Golden Visa program so successful. By providing businesses with a longer-term outlook, the UAE is reinforcing its position as a global business hub, encouraging innovation, expansion, and value creation.
Aligning with the UAE’s Vision for 2031
The introduction of a long-term business license aligns perfectly with the UAE’s ‘We Are the UAE 2031’ vision, which focuses on sustainable economic development and enhancing the country’s global competitiveness. According to Damian Hitchen, CEO of Saxo Bank MENA, a longer-term license promotes stability and allows businesses to engage in more effective long-term planning.
This new licensing structure would not only reduce the frequency of renewals but also offer businesses the consistency and clarity they need to thrive. Sachin Kerur, Head of the Middle East Region at Reed Smith, highlights that the UAE’s Golden Visa program has been pivotal in attracting high-skilled talent and investors, and the proposed trade license could have a similarly profound impact on the business community.
The Bigger Picture: 100% Foreign Ownership and Beyond
The 10-year trade license is seen as part of a broader set of reforms that began with allowing 100% foreign ownership for businesses in the UAE. This regulatory change led to a surge in new businesses and reaffirmed the UAE’s commitment to providing a business-friendly environment.
The potential ‘Golden’ and ‘Silver’ trade licenses could offer the same benefits as the Golden Visa, giving businesses more certainty regarding tenure, status, and setup costs. With these reforms, the UAE continues to position itself ahead of other global economies, offering an environment where businesses can focus more on innovation and growth rather than the administrative burdens of frequent renewals.
As the UAE continues to evolve its business regulations, the introduction of long-term trade licenses could be the next big step in cementing its status as a leading global business hub. Companies in the UAE can look forward to more stable operations, enabling them to plan for the future with confidence.
