The UAE houses a rapidly expanding construction industry, projected to cross $50 billion in 2029. This makes it an ideal place for entrepreneurs to get a construction license in Dubai, or expand their business operations.
Business Activities Under Construction Company License
The following activities are permissible under a Dubai mainland license for a construction business:
- Residential construction
- Farm construction
- Industrial construction
- Commercial construction
- Community building construction (schools, hospitals, public buildings)
- Building adjusting
- General maintenance
- Interior decoration
- Landscaping
- Electrical fittings
- Sanitary plumbing
How to Set Up a Construction Company in Dubai
Choosing the right legal structure is a critical first step, and many businesses choose a mainland company to operate across the UAE and bid on government, private, and large scale projects. Working with a business setup consultant is the best way to start a construction business in Dubai, as Dubai’s construction sector offers strong market opportunities. A&A Associate can guide you through the entire process, making sure to support you with the paperwork and liaising with government officials. The overall setup and licensing process commonly takes 2 to 4 weeks. Success also depends on execution capacity, including the technical team and operations, not only paperwork.
1. Choose a Business Location
You can get a building construction license in a free zone or on the mainland, but for on-ground work the mainland is typically more practical, while free zones are usually better for consultancy, design, or international-contract activities; depending on the planned activity and jurisdiction, a branch or other approved form may also be used by a foreign company. Generally, most businesses prefer to set up their facility on the mainland due to the ease of expansion, especially for larger on-ground projects. Some location examples include Al Rega, Dubai Investment Park First, and Saih Shuaib 2.
2. Register a Trade Name
The next step is to register a business name. You can check the trade name database on the Department of Economy and Tourism (DET), which supports economic development through trade-name reservation, to make sure your company name follows UAE naming rules, reflects the business activities, and is available. After reserving the trade name, applicants must obtain initial approval before proceeding.
3. Apply for a Construction License
The Dubai trade license application for a construction license in Dubai is handled by the Dubai Department of Economy and Tourism (DET), which is the competent authority and relevant authority for issuing the trade license application and overseeing building contracting, general contracting, and civil works activities. To apply, construction companies must first define their construction related activities and contracting activities from the DET list, choose a legal form, reserve a trade name, and submit the trade-license request with the Memorandum of Association (MoA) and partner ID documents, including passport copies. Depending on the jurisdiction, contractors may also file through a Free Zone authority. The team at A&A Associate can help secure the contractor’s license, manage approvals, prepare the paperwork, obtain any additional approvals required under local regulations, and coordinate project-level building permits with Dubai Municipality and other authorities, including the Dubai Electricity and Water Authority and the Transport Authority, while also helping construction companies register with Dubai Municipality and, where applicable, the Federal Tax Authority for VAT and Corporate Tax compliance. Some projects also require additional permits, including prior approval for multi-floor buildings, depending on project scope.
Types of Construction Licenses in Dubai
There are different types of construction licenses available depending on the nature of construction works your company intends to undertake:
- General Building Contracting License: This license permits the construction, development, and management of general residential, commercial, and industrial buildings. It allows companies to engage in comprehensive construction related activities encompassing new building projects across various sectors.
- Building Maintenance License: This license authorizes businesses to perform repairs, remodeling, facility management, and renovation of existing structures. It is suited for companies focusing on upkeep and improvement of buildings rather than new construction.
There are three types of trade licenses in the UAE: commercial, industrial, and professional. Generally, a construction license is considered to be a commercial license, and a Dubai Municipality NOC is required before final licence issuance, with civil defence also involved in permit, utility, and safety approvals. Businesses must also comply with the Dubai Building Code, building standards, and other applicable regulatory requirements. A building completion certificate is issued after final inspections confirm compliance with the Dubai Building Code.
4. Open a Bank Account
Opening a corporate bank account is easier with the help of a business setup consultant. Our consultants maintain good relationships with multiple banking service providers and can guide you through the account opening process.
Cost For Construction License in Dubai
Users want to understand the costs associated with obtaining a construction license and starting a construction business in Dubai. The cost of a construction license in Dubai typically ranges from AED 15,000 to AED 25,000, depending on factors such as business size and structure. It costs approximately around AED 28,272 to get a construction license in the Dubai mainland. The price is broken down into the following expenses:
- Trade name reservation: AED 736
- Initial approval: AED 236
- Ejari: AED 4,000
- MoA & document submission: AED 500
- NOC from Dubai Municipality: AED 800
- Activity fees: AED 10,000
- License fees (approx): AED 12,000
Additional costs associated with obtaining a construction license may include expenses for visas, insurance, and municipality classification. Moreover, a Dubai construction company must register for VAT when its taxable supplies exceed AED 375,000 in the previous 12 months, which can impact overall business costs.
*“These are the general expenses associated with getting a construction license but the final cost will depend on the client’s visa requirements and office location. It’s important to consult a professional to get the most accurate estimate,” said Anjali Jose, a Senior Operations Executive at A&A Associate.
Benefits of General Construction Licenses in Dubai
Foreign entrepreneurs and investors get multiple advantages from business setup:
Government incentives
The government provides modern infrastructure for businesses of all sizes, along with a simpler business setup process backed by strong government support that helps the construction sector grow and innovate.
Thriving business hub
Dubai is home to various business ventures across industry sectors. Dubai continues to see infrastructure projects and consistent demand, which supports opportunities for construction companies.
Low taxes
There is no income tax or capital gains tax in the UAE. This makes getting a construction contractor license a lucrative opportunity.
International customer base
There is a large expat population in the country, giving foreign investors access to a diverse range of customers.
Get a Construction Business License With A&A Associate
A&A Associate’s business setup consultants streamline the company formation processing, handling everything from applying for a trade license to getting a bank account, which is especially useful for a new company managing post-licensing formalities. For a dubai company, after licence issuance, contractors still need Dubai Municipality contractor’s registration, relevant approvals and additional approvals, ICP and GDRFA establishment cards, a MOHRE establishment file for immigration files and residence visas, plus VAT and Corporate Tax registration where applicable. Long term success also depends on complying with UAE labor laws, including sponsorship and residence visa processing, fair wages, and safe working conditions. We handle clients from every industry sector, across business size and jurisdiction. Book a free consultation today!
