Thinking about setting up an import-export business in Dubai? Dubai trade statistics from 2020 show that the total value of imports, exports, and re-exports in the United Arab Emirates totalled a whopping $1.182 trillion AED.
Clearly, Dubai is a great place to start and grow these types of trade businesses. It is, after all, a well-developed city with plenty of commercial opportunities. However, is it as easy to set up a business in the UAE as it seems?
Honestly, kind of, as long as you have the help of experienced experts in Dubai company formation. Outlined here are the benefits and hurdles of setting up a successful trading business in Dubai and across the UAE.
Why You Should Start an Import-Export Business in Dubai
Dubai is a city with a long history of trade and commerce. For centuries, merchants from across the globe have flocked to its bustling souks and markets in search of goods from all corners of the world.
Today, Dubai continues to be a major hub for trade businesses. Thanks to its strategic location at the crossroads of East and West, Dubai is uniquely positioned to facilitate trade between the two regions.
Moreover, the UAE offers a number of significant advantages for businesses, including a favourable tax regime, a pro-business regulatory environment, and a growing population of consumers with high disposable incomes.
Did your ears perk up regarding the favourable tax situation in Dubai? It’s a massive plus. Corporations are taxed at 0% (yes, zero) on income up to AED 375,000 just 9% on income above AED 375,000.
Entrepreneurs looking to trade in Dubai also enjoy well-developed infrastructure. This makes the region perfect for business activity in the UAE and beyond. With a modern airport and seaport that accommodates large shipments, import and export has never been easier.
The UAE Depends on Trade Activities
There is also a strong demand for imported goods in Dubai. The UAE is home to a growing population with a disposable income and the Dubai economy is strong. This is particularly true as climate change becomes more and more of an issue.
The United States Foreign Agriculture Service reported in January of 2022 that due to climate issues that are causing water shortages, the UAE relies on foreign imports to meet nearly 90% of its food needs.
The same study mentioned above also found that all throughout the UAE, 34% of customers are willing to pay premium prices to be able to purchase their brand of choice. And, similar studies show similar statistics for imports coming from places like Great Britain. Here’s a step by step guide to establishing a Dubai import export company.
Step 1: Learn About Business Licenses in Dubai
Interested in the tax terms and favourable business conditions in Dubai? Great! Now, if you want to set up an import-export business in Dubai, you will need to obtain a trade license from the Dubai Chamber of Commerce and Industry.
The process is fairly simple and just requires that you meet some basic requirements. Let’s walk you through those.
The Cost of an Import-Export Business License in Dubai
As mentioned, the first step is to get a license from the Dubai Chamber of Commerce and Industry. The cost of the license depends on the type of business but is typically around AED 2,000.
In addition to the license fee, businesses have to pay an annual registration fee of AED 1,000.
Once you pay the license and registration fees, you will likely need to obtain physical office space in Dubai. The cost of renting office space can vary widely but is typically around AED 5,000 per month.
Finally, you will need to obtain a trade license from the Department of Economic Development. The cost of the trade license depends on the type of business but is typically around AED 3,000.
This obviously doesn’t include any additional services. Therefore, it’s important to consider these costs if you’re interested in trading activities in Dubai.
Documents Required to Get Your Business License in Dubai
Before you start operating a Dubai business, there are certain documents you will need to obtain a trade license.
First, you will need to submit an application form to the Department of Economic Development. You can typically download this from their website or ask for a copy of the document in-office.
Next, you will need to provide proof of your trade license from the Dubai Chamber of Commerce and Industry. Once you have these two documents, you will then need to provide a letter of guarantee from a bank in Dubai.
Lastly, you will need to submit a copy of your passport and UAE residence visa. Once you have all of these documents, you will be able to apply and embark on your business activities in Dubai.
Step 2: Apply for Your Business License in Dubai
Now you’re ready to apply for your business license in Dubai! However, before you can apply for your license, you need to have a registered Dubai business.
For this step, we suggest that you consult the services of business formation experts in the UAE. They will be able to help you understand your options, such as the difference between LLC vs. sole proprietorship in Dubai.
Once you have your business idea and your commercial and trade licenses, you can then begin the application process.
The first step is to fill out an online application form. You will need to provide basic information about your business, such as its name and address. You will also need to upload some documents, such as your commercial license and registration papers.
Once your application is complete, you will submit it to the Dubai Department of Economic Development for review.
If everything is in order, you will be issued your UAE import-export business license within a few weeks. With your license in hand, you can soon begin trading.
Step 3: Consider Dubai Customs Requirements
Before celebrating, we suggest that you consider customs requirements that might apply to your business.
International trade opportunities in Dubai are ample and varied. However, it’s still important to consider the customs requirements of both the UAE and the country of origin of the goods being shipped.
In general, all imported goods must be declared to UAE Customs, and relevant taxes and duties will be applied. There may also be additional requirements for specific types of goods, such as food products or pharmaceuticals.
It is also important to be aware of the import-export regulations of the destination country, as these can vary significantly from those of the UAE. In addition, you’ll need to be aware of import tariffs and other taxes that may apply to your products.
Failure to comply with customs regulations in the UAE can result in delays, fines, or even seizure of goods. Therefore, it is essential to do careful research and consult with experts before beginning your business setup process.
Don’t Forget About a Visa
If you want to trade goods in Dubai, you will need to obtain a visa. The UAE has strict laws regarding the import and export of goods, and a visa is required for all shipments.
There are two types of visas available: a transit visa and an import-export visa. A transit visa is valid for 14 days and allows you to import or export goods within that period. An import-export visa is valid for 30 days and allows you to import or export goods within that period.
However, if you plan to live and work permanently (or even semi-permanently) in the UAE, a residence visa is a better choice.
To apply for a visa, you will need to submit an application form, passport photos, and a copy of your passport. You can apply for a visa online or at a UAE consulate. If you are applying for a transit visa, you will also need to provide a copy of your travel itinerary.
The processing time for visas varies, but it generally takes about 2-3 weeks to receive a decision. Once your visa is approved, you will be able to pick up your shipment at the port of entry in Dubai.
However, if you’re working with a corporate solutions expert in Dubai throughout this process, it’s likely that the visa stuff will be included in their fees. If it’s not, definitely ask.
Work With the #1 UAE Business Solutions Experts
Starting a Dubai business can be a daunting task, but with the help of the #1 UAE business solutions experts, you can be up and running in no time.
As company formation specialists, we’ll help you navigate the process of setting up a company in Dubai. We’ll also provide all the resources you need to get your new business off the ground. With our expert guidance, you can focus on what’s important — running your new business and achieving your goals.
Contact us today to learn more about how we can help you start a profitable trading company in Dubai.