One of the UAE’s most profitable industries is by starting a logistics business in Dubai. For anyone who is looking to start a logistics company in the UAE, the strategic location that provides access to Asia, Europe, and western countries is a boon. With the shipping and logistics service made available, UAE is all set to receive a major economic boost. So how to start a logistics company in Dubai?
All types of businesses are flourishing in Dubai and it stands as the epicenter of trade and commerce in the UAE. It is because of its favorable business environment. An entrepreneur requires a good capital investment if they want to gain a strong foothold because the logistics industry in Dubai is extremely competitive. Then only the business can flourish in the future.
All major contributors to the logistics industry in UAE are aspects such as diversification of the industry, harmonization of regional trade and export regulations, and expansion and modernization of logistics services.
Logistics Business in the UAE
Many entrepreneurs need to start a logistics company in Dubai due to its ever-improving connectivity with major global commercial hubs. Given the perks and benefits, there is no better place for a logistics business internationally.
Before setting up the logistics company in Dubai, the entrepreneur needs to know about the process related to customs, documentation, and paperwork. Before venturing into the logistics industry, the customs and clearance process are something they should be well aware of. With a large number of suppliers all over UAE, the logistics market in Dubai is pretty fragmented. Therefore it is always best to go with an experienced company as it helps the entrepreneur save costs, and clearance fails.
Because of the presence of some of the world’s busiest sea and airports, logistics in Dubai are assured to flourish. In expanding its shipping and airlines with several cities worldwide, Dubai has been investing tens of billions. Consequently, the logistics sector has seen great growth in the UAE. There is also a large prospective client market for the logistics company in Dubai with the advent of many companies in the UAE.
With some 45% of the total share, Dubai leads the UAE market for logistics. If the entrepreneur has serious aspirations for setting up their business, Dubai is the best place for them while there are also other jurisdictions as well. Dubai makes an ideal supply and redistribution gateway because of its geographical location and infrastructure. It is well positioned globally as well as very connected by air, water, and roadways as it is strategically located at the center of international trade.
This is the best time for business owners to start and invest in logistics companies in Dubai because of the government’s new laws, flexible regulatory procedures, easy application and approval processes, and quick timelines. For the onshore company, full ownership is available giving the entrepreneur complete access and freedom to operate freely.
Depending upon the jurisdiction, forming a company anywhere in Dubai has its benefits. Due to all types of markets available, logistics companies on the mainland are a very preferred choice. It has the maximum benefits that the country has to offer and gives way to profitable logistics businesses due to easy distribution throughout the UAE. Entrepreneurs can take the mainland option if they want 100% ownership of their business and need to operate freely both with imported and locally manufactured goods.
Certain jurisdictions are solely for logistics business in the free zone. This makes the entrepreneur get the highest profit from the free zone. For logistics business, there are many free zone jurisdictions in Dubai. Just like the mainland, free zones provide great location and infrastructure and are very well connected through the roadways, airways, and waterways making business efficient and smooth.
Setting Up a Logistics Company in Dubai
Entrepreneurs must have all the required documents before they start setting up a logistics company in Dubai. The business setup process can be smoothed by having all the documents. However, while applying for the logistics license in UAE, there is only minimal documentation required.
The entrepreneur will be asked to provide the completed license application form, two color passport-size photos, a copy of the owner’s passport, and that of the shareholder in most cases. They may be asked to submit the business plan in some instances.
It is also recommended to keep the personal data of the shareholders and managers, proof of initial activity approval, trade name reservation proof, and a document showing the legal agreement of the physical address of the company. These might not be needed in most cases but can be kept in hand just for sure.
Entrepreneurs can ease through the process of starting a logistics company in Dubai with the help of reliable companies that offer business company formation in Dubai. They can get assured services such as error-free documentation and fast-tracked processing and can also handle every step of the process on the behalf of the business owner. They will liaise with the relevant authorities to ensure all the documents are present and correct before applying. It increases the chance of entrepreneurs’ successful license application as they remove the hassle of company formation.
The following are the procedure associated with setting up a logistics business in Dubai:
Select the Business Activities
It is important to define what type of business activity the entrepreneur is within the logistics as it covers a varied range of activities such as freight and cargo, carrier, etc.
The entrepreneur must ensure that the chosen activity aligns with those on the list published by the Dubai Department of Economic Development (DED) and also need to specify the area of logistics that they will be trading in. It could lead to issues further down the line in case of failure to specify every intended activity. There are thousands of permitted activities to choose from and the entrepreneur can choose the one that fits them.
Choose the Company Name
The business owner must choose a suitable company name for their UAE mainland business. The name of a logistics company should be easy to remember.
The entrepreneur must abide by a strict set of naming conventions while choosing a company name in the UAE. Offensive or blasphemous language should be avoided and also the name of any well-known organizations. If a person’s name is used to name a company, the entrepreneur must avoid abbreviations. They must also check that the chosen name is available to register as it should be unique.
Make the License Application
Applying for a trade license is one of the most critical steps in the process of setting up a logistics company. As per the law, every business requires a license in Dubai. The entrepreneur must submit the required documents and should pay the fee to apply for a logistic license.
The application is made directly to the Dubai Department of Economic Development (DED) when applying to form a mainland company. If the entrepreneur chooses to set up in another emirate, they can apply to the local equivalent. This process can be completed within hours and takes place primarily online.
Make the Visa Applications
The business owner must also hold a residency visa to work in the UAE. The steps of the visa application process include biometric scanning, a medical, and a chest x-ray. They can also sponsor others for their visas if they are holders of a UAE business license. They can sponsor a parent, spouse, child, or a domestic laborer such as a housekeeper.
Depending upon the size of the company, chosen setup, dependent visas, and personal earnings, the entrepreneur can apply for the maximum number of visas.
Open a Corporate Bank Account
To start trade in the UAE, the entrepreneur will need a corporate bank account. It is not always easy to obtain banking services as an overseas investor. Business setup consultants in Dubai will take the time to understand the needs of the business owner before putting them in touch with the institution that is most able to meet them.
Once the entrepreneur completes all the above-mentioned steps, they can obtain their logistics license from the respective authorities. They can then start the logistics business in Dubai after acquiring the license.
The cost of setting up a logistics company in Dubai is based on a variety of factors. These include the type of license that is chosen by the entrepreneur, security features, vehicles required, promotional campaigns, and so on. This points out the fact that coming up with an accurate cost is not an easy task for setting up a logistics company in Dubai.
Benefits of Starting a Logistics Company in the UAE
Dubai itself is one of the biggest benefits of setting up a logistics company in Dubai. Dubai is one of the best places to start a logistics company due to its reputation as a foreign business-friendly country.
Warehouse management, item packaging, repackaging, material handling, and deliveries are activities included in logistics as an industry. This points to the fact that the region where the company is located is of prime significance.
Starting a logistics company in Dubai needs no paperwork because of its advanced technology and supportive administration. A large number of entrepreneurs get attracted to the cutting-edge infrastructure of Dubai. It has a terrific public transportation system and one of the best telecommunications facilities.
The city links manufacturers, producers, and suppliers from all around the globe as its strategic location connect East, West, North, and South. Great connectivity is also offered with the locations of airports and seaports. The growth of logistics activities in Dubai is contributed by these factors. The government of UAE works towards the betterment of foreign businesses in Dubai and keeps on taking new initiatives. Also, its employees have business skills all over the world.
Almost every foreign business is exempted from all types of taxes in Dubai such as income, business, and personal taxes. However, on certain business activities, some of the companies may be mandated to pay a VAT of 5%. Also, the entrepreneur gets 100% ownership of their logistics business as the city has many free zones in it. The logistics company need not give a portion of their capital invested and profits earned as taxes to the government of UAE.
Getting a visa in Dubai becomes easy once the business owners have all the relevant documents. Moreover, the foreign national-dominated job market becomes more adaptable with the new visa rule systems. Dubai is one of the top spots in the world for logistics business because of its low tax, excellent infrastructure, direct freight, and cargo connections. These benefits enhance further business activities and opportunities.
Many prominent companies offer business setup in Dubai based on the needs of the entrepreneur. They map and process the requirements of the business as per the needs of the entrepreneur with the help of their business setup consultants. They help the entrepreneur with the entire process of setting up a logistics company in Dubai through the entire legal and company setup process.