Dubai – The UAE is set to transform its business landscape with the introduction of a potential 10-year ‘Golden’ trade license, a proposal that could significantly impact companies operating within the country. This initiative, currently in its early stages, aims to extend business licenses for up to a decade, offering businesses unprecedented stability and the ability to plan long-term.
The Future of Business Licensing in the UAE
While some free zones and emirates in the UAE already offer multi-year business licenses, usually for 2 or 3 years, the proposed 10-year license under the ‘Golden’ business licensing programme would mark a major advancement. Currently, extended licenses are often tied to long-term rental agreements or offered during special promotions. Leading free zones have provided licenses valid for up to 3 years, simplifying operations by reducing the need for annual renewals and allowing free zones to collect fees in advance.
This shift towards multi-year licensing isn’t entirely new. Certain emirates on the mainland already offer multi-year licenses, though these are typically limited to more generic licenses. The potential introduction of a 10-year license, along with a 5-year ‘Silver’ license, as discussed on March 27, 2024, could revolutionise the approach to business licensing, offering substantial cost savings and greater predictability.
Drawing Inspiration from the Golden Visa Programme
The concept of long-term licenses takes inspiration from the success of the UAE’s ‘Golden Visa’ programme. Originally launched to attract investors with property investments of AED 2 million or more, the Golden Visa has since expanded to include a broader range of individuals, spurring investment and supporting long-term residency in the UAE.
A similar effect is expected from the new trade license initiative, particularly if it mirrors the clarity and security that made the Golden Visa programme a success. By offering businesses a longer-term perspective, the UAE is reinforcing its status as a global business hub, fostering innovation, expansion, and sustained value creation.
Aligning with the UAE’s Vision 2031
The introduction of a long-term business license aligns perfectly with the UAE’s ‘We Are the UAE 2031’ vision, which prioritises sustainable economic development and enhancing the country’s global competitiveness. Damian Hitchen, CEO of Saxo Bank MENA, suggests that a longer-term license would promote business stability and facilitate more effective long-term planning.
This new licensing structure is expected to reduce the frequency of renewals, providing businesses with the consistency and clarity they need to succeed. Sachin Kerur, Head of the Middle East Region at Reed Smith, emphasises that the UAE’s Golden Visa programme has been crucial in attracting high-skilled talent and investors, and the proposed trade license could have an equally significant impact on the business community.
The Bigger Picture: 100% Foreign Ownership and Beyond
The proposed 10-year trade license is part of a broader suite of reforms that began with the introduction of 100% foreign ownership for businesses in the UAE. This regulatory change led to a surge in new business ventures and reaffirmed the UAE’s commitment to maintaining a business-friendly environment.
The potential ‘Golden’ and ‘Silver’ trade licenses could provide businesses with the same benefits as the Golden Visa, offering greater certainty regarding tenure, status, and setup costs. With these reforms, the UAE continues to lead the way among global economies, creating an environment where businesses can focus on innovation and growth rather than being bogged down by frequent administrative renewals.
As the UAE continues to evolve its business regulations, the introduction of long-term trade licenses could represent a pivotal step in solidifying its reputation as a premier global business hub. Companies operating in the UAE can anticipate more stable operations, empowering them to plan for the future with greater confidence.
