Want to Launch a Trading Business in Dubai? Tips You Cannot Afford to Miss!

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Dubai is one of the most fascinating cities for conducting business. Fondly called the ‘Shoppers’ Mecca’, Dubai boasts of some of the world’s biggest shopping malls and offers a favourable breeding ground for all kinds of businesses. It is no wonder that business persons, irrespective of their investment capacity, frequently seek information about how to start a trading business in Dubai

If launching a business is on your radar and you want to know how to start a trading business in Dubai, read this article, as we give you a step-by-step guide on how you can start a trading company in the bustling city of Dubai.  

How to Start a Trading Business in Dubai – A Primer

If the daily activities at the land and seaports of Dubai are any indication, it is one of the world’s busiest business places. A trading business in Dubai may push you into the world of never-seen-before profits. 

However, before discovering how you can start a trading business, you need to know the laws and rules governing companies in Dubai. The first thing that you need to set up a business in Dubai is a general trade license.

What is a Trade License & Why do You Need One?

In Dubai and the UAE, there are several types of trade license that a business person seeking information on how to start a trading company needs to know about. 

If you wish to set-up a company that trades in auto accessories, garments and clothing, electronic goods, furniture, and more, you need a business trade license. You will also need a license when you plan to sell services. Additionally, any company wishing to import from and export to foreign countries, needs a business trade license.

If you want to trade multiple goods in many different sectors, you may need a general trade license. The scope of a general trade license is greater, and the cost is higher than a business trade license.

Also, if you plan to sell goods like alcohol, guns, or medical products, you need a clearance from the ministry and need to apply for a commercial trade license. 

Starting a Trading Business in Dubai – A Step By Step Action Plan

Starting a trading business in Dubai is not too challenging when you have the right approach and actionable insights. It is a four-step process that anyone with little or no idea about business can understand.

However, the UAE administration is very particular about time, and any missed deadline can cost you money and time. To avoid this, business persons often hire a professional consultancy service to simplify the document-intensive process.

The following are the four steps you need to know on how to start a trading business in Dubai:

1. Draft a Business Plan

No answer to the question “How can I start a trading company?” is complete without a business plan. A business plan is a blueprint that contains information about your business’s target audience, market, capital investment, products or services, strengths, opportunities, competitors, and advertising strategies. It also includes details about the office and employees you need to hire. Sometimes, when you apply for a trade license, the licensing officer may seek details about your business plan.

2. Select the Location

In Dubai and the UAE, you can register your business in the following three locations or jurisdictions:

  • Mainland
  • Free Zone  
  • Offshore

Presently, there are around forty free zones in Dubai, where foreigners can start a business. If you choose a free zone, you can avail yourself benefits like zero tax on personal and corporate income and 100% ownership in the business. In contrast, if you register in the Dubai Mainland, you need to find a UAE national who will have a 51% controlling stake in the business.

With a mainland license, you can have better scope for carrying out business in Dubai and all other parts of the Emirates, and even abroad. Additionally, a mainland license offers free long-term residence visas to the business owner and employees. An offshore company is one where the company registration is in a different location than the UAE. However, an offshore company receives much lesser benefits than a mainland or free zone company.

If you want to apply for a mainland license, you have to approach the Department of Economic Development (DED), the nodal agency for issuing trade licenses. In contrast, free zones are operated by private authorities, and you need to contact the free zone directly for registering your trading company.

3. Identify the Sponsor

By now, you must have figured out how to start a trading business in Dubai. However, when you decide to get a mainland registration, you need to find a sponsor who will help you fulfil the regulatory criteria. The sponsor must be a UAE national or registered agent.

Usually, they charge some fee every year for providing their services. As already mentioned, the sponsor will have a 51% stake in the company, and you will have the remaining 49%. In Dubai, there are three types of sponsors:

  • The first type of sponsor looks after your business problems and signs all official documents. Their charges are usually the lowest.
  • The second type of sponsor is more influential than the first category. They offer help when you face a business problem and charge higher fees.
  • The third type of sponsor is the one who worka with top-class multinational brands and charges the highest fees.

4. Apply For the License & Fulfil Legal Formalities

On your journey to finding out ways on how you can start a trading business in Dubai, you will face the need to get an appropriate trade license. To obtain a trade license, you need to take the following steps:

  • Choose a trading name by following the UAE conventions
  • Set up the legal structure
  • Decide the business activities you want to carry out. Generally, the UAE government allows up to ten business activities with one license. 
  • Get the initial approval form from the concerned authority, fill it, and submit it
  • Inquire about any special license you need for your business
  • Prepare all necessary documents like the Memorandum Of Association (MOA). All documents should contain the signature of the business owner(s) and stakeholders.
  • Finalise the business location and obtain the tenancy certificate by Ejari
  • On completion of the steps mentioned above, submit the application to the DED
  • Pay the fees required to obtain the license, along with the issuance fee

In case you are applying as an offshore or free zone company, you need to submit all original documents to the Commercial Registration Department. 

The documents you need to submit to obtain a trade license include the license application letter, MOA, DED-issued company name approval letter, and copies of the passport of the owner(s).

How to Start a Trading Business in Dubai – A Simplified Solution

Launching a trading business in Dubai is easy, provided you know the rules properly. Although Dubai and the UAE offer you better opportunities to make profits, people looking for ways how to start a trading business in Dubai often find it document-intensive and time-consuming, which is why you may need professional guidance.  

If you are confused about the right way to start a trading company, Shuraa, with its proven track record of business setup services is ready to help you out. We simplify business registration and help you to conveniently launch your business without worrying about government approvals and licensing, as Shuraa’s team of business setup officers handle it on your behalf.

We offer specialised mainland, free zone, offshore consultancy to make business setup easier. To get your business rolling, call us on +971 44081900, WhatsApp us on +971 50 777 5554 or write to us at info@shuraa.com.