Setting Up A Trading Business In The UAE

March 29 2019

Setting Up A Trading Business In The UAE

Dubai has traditionally been a trading hub, hence establishing a trading business in UAE only builds upon the country’s legacy as a haven for business.

The most common trading forms of business in this category are medical supplies, foodstuff, and oil and gas products.

Dubai, being a tax-free jurisdiction, is accessible to over two billion people within six hours. The location is strategic and encourages many traders from the neighboring countries to allow them to set up, station and establish their banking and business entities in Dubai. Dubai has no foreign exchange restrictions compared to the other countries within this prevailing market.

Though the local UAE market seems small, re-export of goods is a huge business; both via competent seaports and well-connected airports.

You only need to take five steps before you can start running your trading business in Dubai:

1. Plan your business

You can either start your own business in any of the 25+ free zones or as a local business in any of the seven emirates (Abu Dhabi, Dubai, Sharjah, Fujairah, Ajman, Umm Al Quwain or Ras Al Khaimah) in the UAE.

Some jurisdictions may ask for your business plan and they must have the following information:

  • Focus markets
  • Products under offering
  • Total employees needed
  • Required office space
  • The investment you wish to make
  • Marketing efforts
  • Who are the Investors? Financing details
  • What are the critical success factors for your business
  • The suppliers and
  • The competitors

In the wholesale market, you may decide to start with wholesaling activity or have a certain branded shop in one of the many available shopping centres. Whichever you have zeroed in on, the business plan will be a good place to start.

2. Consult with an agent who specializes in company registration

Decision making might get complex since there are more than 2000+ activity based licenses and 28+ available jurisdictions to choose from. Besides this, all jurisdictions won’t offer all activities and each of them will specialize in some form or the other.

In such a situation, how would you decide? Which one meets your objectives? Which is the combination that is going to be optimum for you? Whether now or in the near future?

To start your own trading company also might be difficult due to the various rules and requirements that are necessary for starting up a venture in the Emirate.

Get in touch with a company registration agent who is eager to help you, he will offer a clear path through the available options and will handhold you until you are satisfied. They will also offer their help to you until your company gets registered.

3. Select both the activity and the jurisdiction

If you are taking a specific trading license, it will allow you to trade in specific goods only. If you get a general trading license, which is more expensive, it will allow you to trade with many more products.

Your company license can be from a Free Zone company, which you can own 100% of this company or maybe a local company where you will need a sponsor who, on paper, will own 51% of your company shares.
However, do note that a free zone company can only trade internationally, and has to appoint local distributors to retail goods within the UAE mainland.

Some businesses also require local licenses, for e.g. wholesale market outlets, shops or any business entities who are selling to government entities.

4. Find a sponsor, in case you are registering locally

There are mainly 3 types of sponsors:

  • Sponsors carrying out the sponsorship work through professional companies.
  • Middle-level government functionaries.
  • High-level brand name sponsors.

This can be a difficult task, even more so if you are new to the region. Here is a video that has tips on selecting a local sponsor for a Dubai company. 

5. Getting itemized costs for your business setup

Company registration firms will provide you with itemized costs for your company incorporation and licensing. Visas will cost extra. Typically the time taken for a company to get registered is mostly 45 to 60 business days. Much of this time is used up in getting the correct KYC or Know Your Client documents from your side and making you come to the jurisdiction for all the legal work and signatures. If in case you are easily and readily available, then the process speeds up.

Registration agents can also help you in opening your bank accounts.

Are you looking at opening a trading business in Dubai? Get in touch with us for specialised General Trading packages, starting from just US$ 5,000!

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