New Tenant Creation Issue

vc 0 Reputation points
2026-10-16T22:19:08.76+00:00

I created a pay-as-you-go subscription.

When trying to creating a new tenant I am getting the following error

"the Base-tenant does not have a paid license. Hence add-on tenant creation is not allowed on this base-tenant."

But it is a paid subscription as I mentioned above. The account used to create the tenant is the owner and has explicitly Tenant Contributor role assigned.

Please help

Thank you!

Azure Cloud Services
Azure Cloud Services

An Azure platform as a service offer that is used to deploy web and cloud applications.

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  1. kagiyama yutaka 5,655 Reputation points
    2026-10-18T03:55:40.3+00:00

    I think paying for App Service, Storage and SQL doesn't meet the paid license requirement for Governed Workforce.

    Check Entra > Billing > Licenses > All products in the base tenant for a paid, non-trial license such as Entra ID P1/P2 or Microsoft 365. Tenant Creator is required separately. Subscription Owner/Tenant Contributor only covers ARM permissions. If the error persists after meeting both requirements, open an Azure Support case with the exact error.

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  2. vc 0 Reputation points
    2026-10-17T23:38:06.0433333+00:00

    Is it not enough if my base tenant has a subscription that does have paid App Service plan, storage accounts, SQL database etc, do I need something else when you mention "paid license-based Microsoft product"

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  3. AI answer

    2026-10-16T22:19:24.3+00:00

    For Governed Workforce add-on tenant creation, a paid Azure subscription by itself is not enough. The home/base tenant must also have at least one paid, license-based Microsoft product such as Microsoft Entra ID P1 or P2, Microsoft 365, or Windows Enterprise E3. Free and trial licenses do not qualify.

    The error matches that requirement exactly: the base tenant does not have a qualifying paid license, so add-on tenant creation is blocked.

    What to verify:

    1. Confirm which tenant is the home/base tenant used for creation.
    2. In that tenant, verify there is at least one paid license-based Microsoft product assigned to the tenant. A Pay-As-You-Go subscription alone does not satisfy this requirement.
    3. Confirm the account has the Tenant Creator role. For governed workforce tenant creation, this role is required regardless of the Restrict non-admin users from creating tenants setting.
    4. Confirm the selected subscription is EA or Pay-As-You-Go, and that the account has the required ARM permissions through Tenant Contributor or Subscription Owner/Creator.
    5. If creating through the Governed Workforce flow, optionally verify whether a default governance policy template is configured. Without the default template, tenant creation can still proceed, but the governance relationship is not automatically established.

    If the goal is to create a regular workforce tenant instead of a governed add-on tenant, only paid customers can create a new Workforce tenant from the Microsoft Entra admin center. Customers using a free tenant or a trial subscription cannot create additional workforce tenants there.

    Creation path:

    • Go to Microsoft Entra admin center or Azure portal.
    • Navigate to Entra ID > Overview > Manage tenants.
    • Select Create.
    • Choose the appropriate tenant type.
    AI-generated content may be incorrect. Read our transparency notes for more information.

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