How To Open A Trading Business In The UAE

Pauline Familara
Pauline Familara
10 July 2022
How To Open A Trading Business In The UAE

The Arab Emirates is one of the most attractive jurisdictions for opening a trade-related business. The absence of restrictions on capital withdrawal, currency controls, a favorable geographical location, and economic stability create unique opportunities for developing trade in the UAE. In this article, we will tell you how to open a store in Dubai or any other of the 7 emirates of the country to a foreign investor, which will help you quickly organize a successful trading business here.

What Opportunities The Registration Of A Trading Company In The UAE Provides

To conduct trade-related business in the Emirates, entrepreneurs from other countries must first register a company. Opening a trading company allows:

  • To import goods – the domestic market of the UAE differs in its dependence on imports, and a single trade space with the countries of the GCC makes it possible to establish profitable trade with the prosperous states of the Persian Gulf, taking into account tax preferences, the absence of export/import duties and ease of customs clearance of goods;
  • To export and re-export goods, with the possibility of a VAT refund when exporting goods, you pay a 5 percent tax. A minimum of bureaucracy and an effective system of international sea transportation, providing convenient connections with the countries of Europe, Asia, and Africa, create excellent conditions for international trade. The UAE ranks third in the world in terms of re-exports after Hong Kong and Singapore, trading with more than 220 countries;
  • Conduct international trade from a tax-free jurisdiction, using re-invoicing (a scheme for purchasing goods from a foreign supplier through an offshore company) and transfer pricing to optimize business processes, participating in tenders under the flag of a prestigious jurisdiction that fulfills all FATF and OECD requirements;
  • Trade offline in a physical store on the territory of the UAE or organize electronic trade, which has excellent prospects, considering that more than 90% of the country’s population has access to the Internet, and the trade volume through online stores in the Emirates exceeds $10 billion.

Registration of a trading company in the UAE is a profitable business solution that allows you to trade various goods in any volume within and with other countries.

The Main Factors Ensuring The Success Of Trade Business In The UAE

Factors contributing to the success of business related to domestic and international trade in the territory of the Arab Emirates include:

  • Loyal tax policy of the state with the absence of taxes and fees (except VAT at the rate of 5% on specific groups of goods), export and import duties;
  • High activity of buyers in the domestic market of the country – the UAE is among the top ten countries in the world in terms of the purchasing power of the population, demonstrating great demand for all groups of goods, including expensive ones;
  • A well-developed transport infrastructure that allows the creation of optimal logistics solutions for the delivery of goods to the consumer, their export, and import;
  • A modern banking system that offers a vast selection of products and services at low rates;
  • A low level of bureaucracy simplifies the process of business registration and obtaining licenses, certificates, and permits.

How To Start Trading In The UAE

For successful trading activities in the territory of the Arab Emirates, it is necessary to know the requirements of the legislation of this country and some peculiarities of conducting business related to trade for foreign entrepreneurs.

What To Consider If You Decide To Open A Trading Business In The UAE

The main features of the UAE legislation, which regulates trade relations for foreign investors, include:

  • The possibility of opening a trading company in the Free Zone, which can operate only within its free zone, or a local LLC, which has the right to trade throughout the UAE. Today, the presence of a partner who is a citizen of the Emirates is no longer required to open a local company, but its maintenance is more expensive than a company in a free zone;
  • The obligation to obtain a license – this may be a limited trade license for the sale of certain groups of goods or a general permit for the sale of any goods;
  • The need for certification of goods imported into the UAE. All imported goods must comply with national standards and technical regulations;
  • The requirement to test some goods and the need to obtain an additional permit for their trade in the territory of the Emirates.

Before opening a trading business in the UAE, it is necessary to research the market and the competitive environment and think through the organization of the central business processes. For successful trade, it is required to choose suitable trading areas and places of warehouse storage of goods, find reliable suppliers and carriers and develop optimal solutions for trade logistics.

How To Open A Store Or Online Store In Dubai And Other UAE Emirates

To open a store in the United Arab Emirates, you must adhere to the following algorithm of actions:

  1. Choose the type of company – a trading company in a free economic zone or a local company on local land outside the Free Zone;
  2. Decide on the choice of the emirate or free zone that your company will be registered in;
  3. Choose and rent an office (if necessary), trade and warehouse premises;
  4. Register a legal entity;
  5. Obtain a trade license;
  6. Open a corporate account in the UAE bank.

The specialists of Dynasty Business Adviser provide consulting support to entrepreneurs and companies wishing to open a trading business in the UAE and will help you register your company and obtain all permits and licenses necessary to start work in the shortest possible time.

  • Euromoney April 2006 Archived from February 3, 2008, on the Wayback Machine.

  • The Government and Politics of the Middle East and North Africa. D Long, B Reich. p. 157

  • Economy : UAE: consequences of diversification. Retrieved January 15, 2011. Archived from the original on April 21, 2013.

Frequently asked questions

How Much Does It Cost to Open a Store in Dubai?

The cost of opening a store in Dubai varies, depending on location and area. A significant part is the rent price, which in large shopping centers reaches $1,700-2,000 per sq. m. For a room with an area of ​​500 sq. m., you’ll have to pay about $1 million and 10% of this amount for a license. Remember RERA fees, permit fees, registration, and resident visas. Opening a small shop will cost much less.

What is Essential for Opening a Trading Company in the UAE?

To start a trading business in the UAE, it is vital to first research the market for the availability of similar goods to find out at what price competing firms sell them. It is necessary to think in advance about organizing all processes from purchase to delivery and storage of the goods and to find reliable carriers, suppliers (producers), and premises for storage and sale.

How to Start an Online Business in Dubai?

To start an online business in Dubai, it is necessary to register a company in a free zone or a local company on the mainland and obtain an e-commerce license. After that, you can start developing and filling out the website. Registering a company should begin with choosing its type and jurisdiction, registering a name, and renting a physical office.

How to Avoid Mistakes When Registering a Trading Business in the UAE?

Contact our company to avoid mistakes when registering a trading business in the Emirates. Dynasty Business Adviser experienced specialists in business, economics, and jurisprudence, who are well acquainted with the legislation of the UAE, will conduct market research and the competitive environment, will help you obtain all licenses and permits, and will register your business in the optimal period.

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