The United Arab Emirates (UAE) is one of the most popular countries around the globe for starting a trading business. Dubai offers foreign investors and entrepreneurs enormous growth, high levels of profitability, a world-class infrastructure, and a business-friendly tax-free environment for a trading company.
This article will highlight the five simple steps to starting a trading business in Dubai, the costs to start a trading company, and all the documents required for a successful trade license application process.
Trade License Zone has helped many entrepreneurs to start a business in Dubai. You can too. Make use of our business setup and consultancy services to cut out the hassle so you can concentrate on your products and customers in Dubai.
Start your Trading Business in the UAE: 5 Simple Steps
Step 1: Market Research into Business Activities
Starting a business in Dubai (or anywhere else in the world) is an exercise in planning and preparation. Market research into the business landscape of Dubai and customers’ needs and demands is a critical process no foreign investor or entrepreneur should skip. This step will determine what products and business activities your new company can offer its customers.
You’ll also need to decide on the business location for a tenancy contract, a trade name and company name, a business structure such as a sole trader or a limited liability company, and calculate the likely minimum capital requirement needed to start your business entity.
Step 2: Develop a Solid Business Plan
A business plan is another crucial step in preparing and organising your new company. Of all the documents you’ll create for your business, this one will be one of the most important – even if you’re a single owner. The business plan is a guide and outline for your company’s lifeline: your vision, goals, targets, strategies, and business opportunities.
Our company formation experts at Trade License Zone specialise in business setup processes. We’ll assist you through every aspect of this process.
Step 3: Select a Trade License
To do business in the UAE, you’ll need to register for a new company and apply for a trade license for your business activity. This is because the UAE created innovative trade zones that offer specialised support for specific industries and business activities. There are two major categories of trade zones in Dubai: Mainland and Free Zones.
A Mainland company allows you to trade in the UAE, but you’re restricted in ownership: an Emirati partner must own a minimum of 51 percent of the business shares.
There are over 40 Free Zones from which to choose in Dubai. A Free Zone company is entitled to special benefits such as 100 percent ownership of the company, accrue zero tax charges, and more.
Applying for a trade license in a Mainland or Free Zone jurisdiction will narrow down the types of trade licenses for your new company.
We at Trade License Zone guide you in selecting the right trade license from the nearly 2,000 available. A trade license determines the type of business activity you can pursue. The most popular types of trade licenses for a trading business are:
- General Trading License: this allows you to trade all types of goods, except oil and gas, cryptocurrency, and precious metals.
- Specific Trading License: this allows you to trade in specific types of items such as electronics, cosmetics, clothing, construction equipment, vehicles, food and beverages, and more.
Step 4: Legal Structure
As we’ve mentioned, starting a business as a Mainland company requires you to partner with a UAE national who will hold 51 percent of the total shares of your business. There are two types of sponsorships regulated in the UAE for Mainland businesses:
- Local Sponsorship: a local sponsor will hold 49 percent of the shares of a business once established.
- Corporate Sponsorship: this enables you to hold 100 percent ownership by invoking the investor’s rights protection contract.
Step 5: Partner with Trade License Zone
Trade License Zone is a local business setup agency that’s helped thousands of foreign investors and entrepreneurs start a trading company in Dubai. By partnering with us, our expert teams will manage all aspects of your company formation and setup, guide you through selecting the legal structure, the trade license application process, and help you get governmental and municipal initial approval to trade in Dubai and across the UAE.
Costs Required to Start a Trading Business in the UAE
The costs and how to start a trading company in Dubai vary according to the type of business activity, the trade license type, chosen free zone or one of the UAE Mainland sponsorship types for the current sponsor, and office and business location.
The basic cost of applying for a General Trading License in Dubai starts at AED 29,200. Remember, those costs vary depending on the type of company and its business activities.
Our consultants at Trade License Zone specialise in assessing the cost for businesses to have a successful start in Dubai. Contact our agents today to get a general idea of business startup costs in Dubai.
Documents Required to Start a Trading Business in the UAE
Along with your completed trade license application form and business plan, you’ll also need to submit the following documentation to the Dubai Department of Economic Development (DED):
- Proof of ID and address for all directors and shareholders
- Passport copies for all shareholders and directors
- Initial approval from relevant government authorities
- Copy of trade name confirmation
- Memorandum of Association (MOA)
- Tenancy contract for office or warehouse sites
Working with Trade License Zone
Business setup in the UAE is straightforward – that is, if you know what you’re doing. The UAE government has streamlined the process to make it easier for foreign investors and entrepreneurs to navigate the business frameworks, visa processes, trade license and company formation process to start a trading business in Dubai. Partnering with Trade License Zone will save you from unnecessary delays or rejections.
When you work with the specialists at Trade License Zone, all you need to provide is some basic documentation and a little information about the nature of your business. Then, sit back and let the experts take care of the rest – managing your trade license and visa applications, communicating with all relevant departments and authorities, and reporting back when you’re ready to trade. It really is that simple.