TRW & Co · Technology & IP
IP Licensing in the UAE
IP licensing in the UAE lets brand owners, technology companies and content creators earn from their rights without giving up title. But trade mark, patent and copyright licences each follow different formalities under the federal statutes, and recording rules decide whether a licence binds third parties. This guide covers structure, drafting, tax, competition law and enforcement.
Key pointA UAE patent or design licence binds third parties only once recorded with the Ministry and published in the Bulletin, while a trade mark licence must be notarised but need not be recorded, so a single global template rarely gets all three rights right.
At a glance
Three statutes, three regimes
Trade marks, industrial property and copyright are governed by separate 2021 federal laws, each with its own licence formalities and implementing Cabinet Decision.
Patent licences must be recorded
Under Article 50 of Federal Law No. 11 of 2021, licences bind third parties only from publication in the Industrial Property Bulletin.
Trade mark licences notarised
Article 31 of the Trademarks Decree-Law requires a written, notarised licence; recording on the register is available but not a validity condition.
Copyright rights itemised
Copyright licences must specify each right, purpose, duration and place; anything not expressly granted stays with the author under Article 9.
No sub-licensing by default
Both the trade mark and industrial property statutes bar sub-licensing unless the owner agrees, so franchise and group structures need express permission.
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What IP licensing in the UAE covers
IP licensing in the UAE is the grant of permission to use trade marks, patents, utility models, industrial designs, copyright, software and confidential know-how in return for royalties or other value, while the owner keeps title. It underpins brand licensing and franchising, technology transfer to manufacturing and energy projects, software and SaaS distribution, media and content deals, and intra-group arrangements in which a regional IP holding company licenses rights to operating companies.
Licensing becomes a legal question early. Before signing, the owner needs to know that the right is registered in the UAE, that the licence meets the formal requirements for the right concerned, and that it will be enforceable against infringers and third parties. After signing, the questions turn to quality control, royalty audits, tax, competition law and what happens to improvements and goodwill when the licence ends.
The UAE has modernised all three main federal IP statutes since 2021, and each now treats licences differently, which is why licence drafting starts with the register, not the royalty.
The legal framework for IP licensing in the UAE
The Ministry of Economy and Tourism is the federal authority for registering trade marks, patents, designs and copyright, as the government's IP guidance confirms. Its intellectual property legislation page lists the three core statutes and their implementing regulations: Cabinet Decision No. 57 of 2022 for trade marks, Cabinet Decision No. 6 of 2022 for industrial property, and Cabinet Decision No. 47 of 2022 for copyright.
| Right | Statute | Form of licence | Recording | Default position on sub-licensing |
|---|---|---|---|---|
| Trade marks | Federal Decree-Law No. 36 of 2021 | In writing and notarised (Article 31) | Recordable on request; not a condition of validity | Not permitted unless agreed with the owner (Article 34) |
| Patents, utility models, designs, layout designs | Federal Law No. 11 of 2021 | In writing and signed (Article 49) | Must be recorded with the Ministry; binds third parties only from publication in the Industrial Property Bulletin (Article 50) | Not permitted unless the contract provides otherwise, save on transfer of the business (Article 53) |
| Copyright and software | Federal Decree-Law No. 38 of 2021 | In writing, specifying each right, its purpose, duration and place of use (Article 9) | Copyright registration is voluntary; protection does not depend on it (Article 4) | Rights not expressly granted remain with the author (Article 9) |
| Know-how and undisclosed information | Federal Law No. 11 of 2021, Part Six | Contract; protection depends on reasonable secrecy measures | No register | Contractual |
Trade mark licences
Under the Trademarks Decree-Law, the owner may license one or more persons for all or some of the registered goods and services (Article 30), but the licence cannot outlast the registration. Article 33 confirms that the licence may limit territory and duration, require quality control and prohibit acts that could harm the mark. Registration lasts ten years from the application date and is renewable. Because the statute focuses on the owner as the party entitled to enforce, licensees who want standing to act against infringers should negotiate express enforcement rights and powers of attorney.
Patent and design licences
The Industrial Property Law is more prescriptive. Unless the contract says otherwise, a licensee may exploit the right throughout the State, including the free zones, in all fields and for the full term, and may act against infringement (Article 52); the owner remains free to use and license others (Article 51). Article 54 allows the Ministry to refuse to record a licence that would misuse the right or harm competition, and to require amendments. Patents last 20 years from filing, utility models 10 years and industrial designs 20 years, so the licence term should track the protection period.
Copyright and software licences
Under the Copyright Decree-Law, a licence must spell out the rights granted, and anything not expressly granted stays with the author. Assignment of all future works is void (Article 15), moral rights cannot be assigned (Article 5), and software licences are governed by the terms shown on or installed with the software (Article 12). Works created by employees in the course of employment generally belong to the employer (Article 28), which matters when a UAE company licenses software its staff wrote. Our pages on software licensing and copyright and content go further.
A trade mark licence, a patent licence and a copyright licence signed on the same day can face three different sets of formalities, and only one of them must be recorded to bind third parties.
Compulsory licences and public-interest use
A patent owner cannot assume that an unused UAE patent is a safe asset. Under Articles 25 to 33 of the Industrial Property Law, a court may grant a non-exclusive compulsory licence once at least three years have passed from grant if the invention is not exploited, or is inadequately exploited, and the applicant first tried to obtain a licence on reasonable terms. The court can relax those conditions in emergencies and for urgent public needs, and the Minister may license inventions important to the public interest. A voluntary licensing programme, or documented local supply, is the best defence.
Licensing in the DIFC and ADGM
The DIFC has its own Intellectual Property Law, DIFC Law No. 4 of 2019, in force since November 2019. It does not create a separate DIFC register; it recognises federal registrations and adds a common-law style framework for licences, trade secrets and remedies, administered by an IP Commissioner with DIFC Courts oversight. ADGM applies English common law, so licence contracts governed by ADGM law are interpreted on familiar English principles. In both centres, the underlying marks and patents still need federal registration to be enforceable across the UAE.
Structuring decisions: exclusivity, licensor entity and royalties
The commercial architecture of IP licensing in the UAE is decided before the drafting starts. Four choices drive most of the value.
Exclusive or non-exclusive
Exclusivity attracts higher royalties and investment but limits the owner's options. Under the Industrial Property Law the owner keeps the right to use and license unless the contract says otherwise, so exclusivity must be stated expressly and defined by territory, field and channel.
Which entity licenses
Groups often hold regional IP in a DIFC, ADGM or free zone company and license it onshore. The structure must reflect real substance and decision-making, or it will fail transfer pricing scrutiny and may not deliver the intended tax result.
Royalty model
Running royalties on net sales, minimum guarantees, upfront fees and milestone payments each allocate risk differently. Define net sales carefully, including returns, discounts, VAT and intra-group sales, and build in audit rights.
Improvements and data
Decide who owns improvements, derivative works and data generated under the licence, and whether grant-backs are exclusive or non-exclusive. Overreaching grant-back terms can raise competition concerns.
Franchise arrangements combine trade mark, know-how and copyright licences with operational controls. The UAE has no stand-alone franchise statute, so the IP formalities above, the general contract law and, for some structures, the commercial agency regime all need checking. See our page on franchising.
Competition law and tax considerations
Licences that restrict prices, territories or customers, or impose broad non-compete obligations, may engage Federal Decree-Law No. 36 of 2023 on Regulating Competition, listed on the Ministry's competition legislation page. The Ministry's power under Article 54 of the Industrial Property Law to refuse recording of licences that harm competition gives this a practical edge at the filing stage. Our competition law team reviews restrictive clauses before filing.
On tax, royalties earned by a UAE licensor are generally within corporate tax at 9% above the AED 375,000 threshold. A qualifying free zone person may obtain a 0% rate only on qualifying income, and IP income is subject to specific conditions linked to the licensor's own research and development activity.
Royalties between related parties must be arm's length under the transfer pricing rules, and licensing is generally a supply of services for VAT at 5%, with reverse-charge rules on many imported services. The UAE does not apply withholding tax on outbound royalties in practice, but the licensee's home country may withhold on royalties paid to the UAE, subject to any double tax treaty. Guidance is published by the Federal Tax Authority; see also our transfer pricing page.
Record patent and design licences with the Ministry before you need to rely on them. Article 50 of the Industrial Property Law makes a licence effective against third parties only from publication in the Bulletin, so an unrecorded exclusive licensee may be poorly placed against an infringer or a later licensee.
Process: putting a UAE licence in place
- Audit the rights. Confirm which marks, patents, designs and works are registered in the UAE, in whose name, for which classes, and when they expire. File gaps before launch.
- Clean the chain of title. Check that employee and contractor works and inventions were properly assigned, using the employer ownership rules in the copyright and industrial property statutes.
- Agree the commercial terms. Settle scope, exclusivity, territory including free zones, field of use, royalties, minimums, audits, quality control and term.
- Draft for each right. Use schedules that meet each statute's formalities, such as itemised copyright rights and the trade mark licence's notarisation requirement.
- Execute, legalise and translate. Arrange notarisation, legalisation and Arabic translation where documents are signed abroad or will be filed.
- Record with the Ministry. Record patent and design licences, and trade mark licences where recording is useful, and diarise publication in the Bulletin.
- Manage the licence. Run royalty reporting, audits, quality inspections and renewal tracking, and plan removal from the register when the licence ends (Article 32 of the Trademarks Decree-Law).
Documents to assemble
- UAE registration certificates and register extracts for each licensed right, with renewal dates.
- Assignments and employment or contractor agreements showing chain of title.
- Brand guidelines, technical specifications and know-how manuals referenced in the licence.
- Transfer pricing documentation for related-party royalties, including benchmarking.
- Corporate approvals, powers of attorney and notarised or legalised copies for filing.
- Royalty reports, audit records and quality-control inspection records during the term.
Risks and common mistakes
Licensing rights that are not registered in the UAE
Foreign owners sometimes license a brand or technology into the UAE relying on registrations elsewhere. Trade marks and patents are territorial, and the DIFC IP regime itself relies on federal registrations rather than a separate DIFC register. If the right is not registered federally, the licensee may be paying for something the owner cannot enforce, and a third party may register first. Audit UAE filings before signing, file promptly where there are gaps, and make the licence conditional on registration where timing requires.
Using one template for every right
A single global licence often fails UAE formalities. Trade mark licences must be written and notarised; patent and design licences need recording to bind third parties; copyright licences must specify each right, purpose, duration and place, or the unlisted rights stay with the author. A short schedule per right, drafted to the relevant statute, avoids gaps without rewriting the commercial terms. This is especially important in franchise and technology transfer deals that bundle several rights in one document.
Forgetting free zones in the territory clause
The Industrial Property Law presumes that a licensee may exploit a patent throughout the State, including the free zones, unless the contract says otherwise. Owners who intend separate arrangements for free zone hubs, DIFC or ADGM entities, or re-export markets need to carve those out expressly. Conversely, licensees planning regional distribution from a free zone should confirm that the licence covers export and onward sale, and not only use in the UAE.
Royalty structures that do not survive tax review
Intra-group licences from a UAE or offshore IP holding company are scrutinised under transfer pricing rules in both the UAE and the licensee's country. A royalty rate without benchmarking, or a licensor without people and decision-making to manage the IP, invites adjustments. Qualifying free zone treatment of IP income is narrower than many groups assume. Model the tax position before choosing the licensor entity and document the functions it actually performs.
Leaving termination and post-term use unclear
Disputes often arise after a licence ends: unsold stock, continued use of signage or domain names, retained know-how, and registrations recorded in the licensee's name. Draft clear sell-off periods, delivery-up and de-branding obligations, and assignments back of any locally filed rights. Request removal of recorded licences promptly so that the register reflects the end of the relationship, and plan for interim relief if a former licensee keeps trading. Our interim relief page explains the court tools available.
Enforcement tools available to licensors
When a licensee overruns its licence or a former licensee keeps trading, the statutes provide fast tools. A summary judge may order a description of infringing acts, attachment of goods and preservation of evidence; under the Trademarks Decree-Law the main action must follow within 20 days or the order lapses. The Industrial Property Law allows precautionary seizure of infringing products and, in some cases, of the establishment using the right. Customs can suspend the release of suspected infringing goods for up to 20 days. Criminal penalties, including substantial fines, apply to deliberate infringement under each statute.
Cross-border angle
Most IP licensing in the UAE is cross-border. UK and Singaporean licensors often choose English or Singapore law with arbitration, which works for the contract, but UAE formalities and recording still govern effect against third parties and enforcement against infringers in the UAE. The UAE's treaty memberships, listed on WIPO Lex, support filing through international systems.
Chinese technology licensors must consider China's technology export controls, under which some technologies require registration or licensing before export. Indian licensees paying royalties to a UAE licensor will apply Indian withholding tax and transfer pricing rules, subject to the India-UAE tax treaty. Bangladeshi licensees generally need to comply with Bangladesh's foreign exchange rules on royalty and technical fee remittances, which can require approval, so the payment mechanics should be agreed before launch. Saudi Arabia and other GCC states have their own registration systems, so a GCC licence needs country-specific schedules rather than a single regional grant.
How TRW & Co helps
We advise licensors, licensees and investors on IP licensing in the UAE across brands, technology, software and content, coordinating with our offices in Dhaka, Singapore, London and China. Where representation before UAE onshore courts or the DIFC/ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners.
Rights audit and filing strategy
We audit UAE registrations and chain of title, identify gaps and coordinate filings so that licensed rights are enforceable on day one. See our trade mark strategy page.
Licence drafting
We draft brand, patent, technology transfer, software and content licences with right-by-right schedules that meet UAE formalities and recording rules.
Structuring and tax alignment
We work with tax advisers on licensor location, royalty design, transfer pricing and VAT so that the commercial and tax models match.
Disputes and enforcement
We plan audits, royalty claims, termination and post-term enforcement, including customs and interim measures against former licensees.
Related areas include patent commercialisation and technology transactions. Browse all our UAE practices or contact our Dubai team to discuss a licence.
Checklist for IP licensing in the UAE
- Are all licensed rights registered in the UAE in the licensor's name, and when do they expire?
- Does the licence meet each statute's formalities: notarisation for trade marks, recording for patents and designs, itemised rights for copyright?
- Is exclusivity defined by territory, field, channel and free zones?
- Are sub-licensing, improvements, grant-backs and data ownership addressed expressly?
- Has the royalty model been benchmarked and reviewed for corporate tax, VAT and foreign withholding tax?
- Have restrictive clauses been tested against the competition law?
- Are termination, sell-off, de-branding and register removal steps clear?
IP licensing in the UAE rewards owners who treat each right on its own terms: the commercial deal may be global, but enforceability is decided locally by registration, formalities and recording.
Frequently asked questions
01Do IP licences have to be registered in the UAE?
It depends on the right. Patent, utility model and design licences must be recorded with the Ministry of Economy and Tourism and bind third parties only from publication in the Industrial Property Bulletin. Trade mark licences must be written and notarised, but recording is available on request rather than a condition of validity. Copyright licences must be written and specify the rights, purpose, duration and place; copyright registration itself is voluntary.
02Can a UAE licensee sub-license the rights?
Not by default. The Trademarks Decree-Law bars assignment of the licence or sub-licensing unless the owner agrees, and the Industrial Property Law has a similar default rule save on transfer of the business. Copyright rights not expressly granted remain with the author. If sub-licensing is needed, for example to franchisees, distributors or group companies, the licence should authorise it expressly and set conditions.
03Can the licensee sue infringers?
Under the Industrial Property Law, a patent or design licensee may act against infringement unless the contract says otherwise, and either party may take protective measures. The Trademarks Decree-Law frames enforcement around the owner, so trade mark licensees should negotiate express enforcement rights and powers of attorney. In the DIFC, the IP law allows a licensee to act if the licensor refuses, unless otherwise agreed.
04Is a licence granted onshore valid in the free zones?
Federal IP rights apply across the UAE, including free zones. The Industrial Property Law presumes that a patent licensee may exploit the right throughout the State, including the free zones, unless the contract says otherwise. Owners who want different arrangements for free zone hubs, the DIFC or ADGM should carve them out expressly in the territory clause.
05How are royalties taxed in the UAE?
Royalties received by a UAE licensor are generally subject to corporate tax at 9% on taxable income above AED 375,000. Qualifying free zone persons can access 0% only on qualifying income, and IP income has specific conditions. Related-party royalties must be arm's length. Licensing is generally subject to VAT at 5%. The UAE does not apply withholding tax on outbound royalties in practice, though the payer's country may withhold on payments to the UAE.
06Can competition law affect an IP licence?
Yes. Restrictions on price, territory or customers, wide non-compete clauses and onerous grant-backs may engage Federal Decree-Law No. 36 of 2023 on Regulating Competition. Separately, the Ministry may refuse to record a patent or design licence that misuses the right or harms competition, and may require amendments, so restrictive terms can delay recording.
07Who owns software or inventions created by employees?
Under the Copyright Decree-Law, works created in the course of employment and related to the employer's business, or using its resources, generally belong to the employer. Under the Industrial Property Law, the employer generally owns inventions made under an employment contract, although the inventor may claim extra remuneration in some cases. Licensors should confirm chain of title before granting licences.
Sources and official materials
- Federal Decree-Law No. 36 of 2021 on Trademarks — Licensing rules in Articles 30 to 34
- Federal Law No. 11 of 2021 on Industrial Property Rights — Licensing, recording and compulsory licences
- Federal Decree-Law No. 38 of 2021 on Copyright — Licensing and assignment formalities
- Intellectual Property Legislations, Ministry of Economy and Tourism — Statutes and executive regulations
- Intellectual property (u.ae) — Government overview of IP rights and terms
- Federal Tax Authority — Corporate tax and VAT guidance
- WIPO Lex: United Arab Emirates — UAE IP laws and treaty memberships
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
