How to Start an Import Export Business in Dubai

How to Start an Import Export Business in Dubai

Author

Ambia Hoque

Date

Did you know that Dubai ranks among the top 20 countries for imports and exports? In 2019, the emirate imported goods worth $288 million and exported goods to the value of $389 million. That’s why the import export business in Dubai is one of the most popular areas for foreign entrepreneurs looking for new horizons. It is also one of the most lucrative!

If you have been thinking of investing in Dubai, you may feel overwhelmed with information, and you don’t know where to start. Starting a new business in a new country can be intimidating, but we are here to break down the whole process.

In this article, you will find the ultimate guide on how to start an import-export business in Dubai. We will cover everything from why Dubai is such a great place to consider for your business to the detailed paperwork you will need.

Let’s get started!

Why Start an Import-Export Business in Dubai?

Dubai was once little more than a sleepy port village. Today, it boasts world-famous skyscrapers and a reputation for attracting people from around the world to do business.

The United Arab Emirates ranks 16th in the world for ease of doing business. Authorities have taken multiple steps to lure investors with improved reforms and conditions for entrepreneurs.

This includes multiple tax-free economic zones.

Dubai is politically stable and renowned for its modern, top-class infrastructure. The emirate has been growing at around 6 per cent since mid-2021, higher economic growth than many global business capitals.

Authorities are also focused on diversifying the economy. With some three million inhabitants, mostly a vibrant mix of expats, it is also an exciting and pleasant place to live.

One of Dubai’s main draws is its location at the heart of Africa, India, and the Middle East. This has made it a trading hub for centuries, and now is one of its greatest assets.

What Licenses Do I Need for an Import-Export Business?

The first step to doing business in Dubai is to understand the kind of venture you want. This will allow you to choose the right licensing that will enable you to conduct your business.

There are six main types of license that you can get in Dubai:

  • Commercial
  • Professional
  • Industrial
  • Tourism
  • Agricultural
  • Occupational

The best option for an import-export business is a commercial license.

This will allow you to import and sell goods in the UAE or export goods outside of the emirates. There is a list of more than 2,000 activities you can choose from for your business. This ranges from trading in flowers to food, jewellery, and waste.

The commercial license is issued by the Department of Economic Development (DED).

However, if you decide to set up your business in one of Dubai’s more than 20 free trade zones, you may be able to apply directly to the authorities of your chosen area for your license.

While the process seems pretty straightforward, it can get complicated if you require further special permits or permissions related to your chosen business. For example, if you want to import e-cigarettes or fertiliser, you will need special permission.

Another trading business that will require particular permits is the trade of luxury goods or gold jewellery.

Sometimes your chosen business might touch on two different license types. It is important to get it right when applying for these documents.

This is why it is helpful to have professionals assist you in setting up your business.

How to Apply for an Import-Export License in Dubai

So, you have chosen the kind of license you want to apply for. What comes next when setting up a Dubai import-export business?

You will need to have a few other aspects sorted out before applying for your commercial license. Here is a list of steps to follow:

1) Select Your Business Activity

Your commercial license will allow you to list up to 10 different activities. Your business will have to restrict itself to these activities if you do not want to run into trouble with authorities. You could receive a heavy fine or even be prohibited from doing further business if you do not follow the rules correctly.

Remember that all chosen activities must be linked to your main business activity.

2) Choose Your Location

Dubai has a variety of options when you decide where to set up your business. Each of these comes with its own set of rules. So, it is important to make the right decision when picking the location of your new venture.

The emirate has set up various free zones to make it easier to start businesses and to encourage foreign investment. Each free zone offers its own benefits and packages to lure entrepreneurs. They are also organised around specific economic activities.

Here are some benefits offered by these special economic zones:

  • Full company ownership
  • Zero personal and income tax
  • Low VAT of 5 per cent
  • Full repatriation of profits and capital
  • Access to international trade facilities
  • On-site support
  • Preferential customs duty rates
  • No currency restrictions

It is essential to remember that any license to operate in a free zone does not allow trade with the local Dubai market. However, you can overcome this by working with local distributors.

If you decide to set up your business on the mainland, you may have to find a local partner if it involves offering professional services. This means you will not have full ownership of the company.

Free zones will also offer assistance with other bureaucratic hurdles, such as visa applications and the opening of bank accounts.

However, each free zone comes with its own particular rules. Some may require more steps and additional documents.

3) Pick a Name for Your Import-Export Business

There is no doubt that the name of your company can play a key role in its success or failure.

Your business will have its own brand and reputation, and the name you choose will give customers their first hint of what to expect from you. It will help you market your services on social media, and will appear in your logo and packaging.

Choosing a company name is an important part of any venture. However, when exploring Dubai business ideas, it is even more vital.

This is because Dubai has strict rules about what companies can be titled. And if someone is already using the same name, you will not be able to use it. You may find different restrictions in different zones of the emirate.

The first rule when naming your Dubai import-export business is not to include any religious names that could be blasphemous. The same goes for any global religious or political words that may be loaded.

Steer clear of spicy puns or possibly offensive names, which the authorities may reject.

You also need to be careful not to pick a name which does not have any link to what your primary activity is. It needs to be clear from your company name what it is that you do. That said, it cannot include references to your location, such as Dubai or the Middle East.

You can work around this by using a nationality such as American or Scottish in the name.

Before proceeding, you must also check what the name translates to in Arabic. This will ensure no misunderstandings upon translation.

You will need to submit several names to the Department of Economic Development for approval.

4) Pick a Legal Structure

Depending on your chosen activity and location, you may need to choose the legal structure of your business. For example, will it be a limited liability company (LLC), a civil company, a free zone company branch, or a general partnership?

Most of these will apply only on the mainland. In a free zone your options will be between a Free Zone Limited Liability Company (FZ LLC) or Free Zone Establishment (FZE)

If you are setting up your business on the mainland, you may also need to sign a Memorandum of Understanding (MOU) with your local partner or sponsor.

5) Choose an Office Space

When you apply for the necessary license for your import-export business, you will have to provide proof of a physical office space. This could be a lease agreement.

You can also buy office space for your business in free zones.

6) Apply for Initial Approval

At this point, you will apply to the DED or free zone authorities for initial approval. Depending on which zone you have chosen, this may require:

  • Coloured passport copies of main shareholder and director
  • Signature specimens from the above
  • Letter of intent
  • Business plan
  • Application form
  • Financial reports
  • Registry Identification Code Form

Once you receive approval, you will pay the registration and license fees.

7) Paying Costs

The cost of setting up your Dubai import-export business can range from 12,500 AED to upward of 50,000 AED. This will depend on the licenses you need, the number of people working for your company, and the visas you will require.

basic trade license listing only three activities could cost you a minimum of 12,500. Your business setup agents will talk you through the likely costs associated with your specific venture.

8) Apply for the License

Now you are ready to apply for your licence by sending all the documents you have gathered to the DED or free zone authorities. It can take a few days or up to four weeks to be granted your import-export license.

Then, you will be on your way to starting a business in Dubai.

9) Register With the Dubai Customs Department

Once you have your commercial license, it will be time to get to grips with the basics of Dubai Customs. This is a vital link for the movement of goods in and out of the emirate.

Registering with Dubai Customs will provide you with a unique customs code that you will submit each time you import or export goods.

What Visas Do I Need to Run My Dubai Business?

The other crucial step to consider once you have the right to operate your business is your visa. Several types of visas are available to people running an import-export business in Dubai.

You can get a temporary visa, such as a transit visa, solely to bring goods in and out of the country.

However, if you are planning to move to Dubai or spend a significant amount of time in the emirate, your best bet is to apply for a residence visa. The mere fact that you have started a business or are investing in Dubai will grant you eligibility.

What to Know About Customs Rules?

Once you are set to begin importing and exporting, you need to keep in mind some of the rules that apply in Dubai.

The customs office keeps a close eye on goods coming in and out of the country, as there is a long list of forbidden and restricted items.

Forbidden items include, but are not limited to:

  • Illegal drugs
  • Items seen as harmful to Islamic faith or morals, such as pornography
  • Live pigs
  • Counterfeit goods
  • Used tires
  • Any device used for gambling

Restricted items include, but are not limited to:

  • Live animals or plants
  • Fertiliser or insecticides
  • E-cigarettes or hookah
  • Alcohol

You will have to declare all goods destined for import and export. You will also have to master the documents you will need to provide each time you import or export. This may include specific invoices, certificates of origin, waybills and permits.

Starting a Business in Dubai

Dubai is a global hub with a booming economy and endless opportunities for innovators and disruptors seeking to shape our world.

If you are looking to start an import-export business in Dubai and you are full of ideas and focus, the DUQE free zone is for you. This special economic zone is located onboard the Queen Elizabeth 2 Floating Hotel.

Contact us for advice on setting up your business in a free trade zone.

 

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