Dubai has been continuously topping as one of the major business locations in the world. Over the last few decades, there has been a huge growth in business and financial sectors in Dubai. Sectors such as trade, logistics have also shown remarkable growth. So, starting a general trading company in Dubai is a beneficial investment.
If you are planning to start a general trading company in Dubai and was wondering how to start, we have made life easier for you. Below is a step by step guide to get a general trading license in Dubai.
Steps to Start a General Trading Company in Dubai
1. Develop a business plan
The first step of starting a general trading business is to develop a business plan. A good business plan will consider almost all factors such as market condition, competitions, products and activities, total number of employees, office space requirement, Initial investment, Marketing tactics, Investors and financing. These factors determine the workings of business. Study these factors thoroughly and create a wise business plan.
2. Choose the Jurisdiction
Dubai market is classified into three jurisdictions, namely free zones, offshore, and mainland. There are currently 48 free zones in Dubai. Free zone offers 100% exemption on corporate and personal income and 100% ownership to the investors. In the mainland, the business investors need to find a sponsor for setting up a company who holds 51% shares of the business. The Offshore company is the company that is set up in the country different from the country of residence of the investor. Choose the jurisdiction according to the requirements of your company. It is better to start your company in Dubai mainland because there is more exposure to the customers, you can trade with other companies in Dubai, there is no limitation on issuance of work visas and open multiple branches.
3. Find a Sponsor
If you wish to set up your company in the Dubai mainland, you need to find a sponsor for your business. The sponsor will hold 51% shares in your company. You cannot start a company in the mainland without getting your business sponsored by UAE nationals. There are two types of sponsorship; local sponsorship and corporate sponsorship. While a local sponsor will hold 51% shares in your business, a corporate sponsor will give you 100% ownership through the investor’s right protection contract.
4. Legal Formalities
Getting a license for your business is very important as it makes your business legal. The General Trading License allows a company to sell, store, distribute, import and export, etc. General Trading License covers a wide range of business activities like retail & wholesale of goods; to the selling of clothes, accessories, pieces of equipment, furniture and fixtures, and electronic appliances.
Steps to get a general trading license in Dubai are as follows:
There are 8 simple steps to get the general trading license for your business in Dubai, UAE –
- Choose a trade name for the company
- Plan your business activities
- Apply for initial approval from DED.
- Getting external approvals if required
- Prepare Memorandum of Association (MOA)and get it signed by your partners
- Choose a business location and get a tenancy contract properly attested by Ejari.
- Submit the application to the Department of Economic Development (DED)
- Pay the fee for the issuance of the license
If you are applying for a general trading license in a free zone or offshore, you are required to submit the original documents to the Commercial Registry at the trade license and commercial registration department. DED will issue the general trading license after getting approval from the trade license and commercial registration department.
Cost of Setting Up a General Trading Company in Dubai
The cost of a general trading license in Dubai will be anywhere between AED 15,000 to AED 50,000 (approx.) or even more. The total cost of a license is determined by factors such as where you choose to set up business, warehouse size, office space, additional approvals, business jurisdiction, and visa applications.
When you engage with the experts at the Shuraa, however, you won’t have to worry about the authenticity of these payments. We oversee all transactions to ensure you secure the cheapest general trading license in the UAE and that you do not incur any additional costs as a result of incorporating your general trading business in the UAE.
Documents required for application of general trading license in Dubai:
All corporations in Dubai must comply with the paperwork demands established by the administering bodies. Here’s a list of documents you’ll need to submit for getting a general trading license in Dubai.
- Passport copies of all the partners in the company
- Passport size photographs of the candidate in compliance with the photography protocols
- MoA and LSA agreements
- Trade name registration letter issued by the concerned council
- Office/warehouse tenancy contract along with a detailed location plan
- NOC letter from your current service agent
Once you submit these documents, the company officials will check and verify and add your trade name to the commercial registry. The DED will forward your documents to the Federal Ministry of Economy for its publication. The ministry will issue the approval letter on successful publication.
Advantages of Obtaining a General Trading License in Dubai
The benefits of establishing a general trade corporation in Dubai are numerous. The following are a handful of them:
- It’s a low-risk endeavor when you set up a trading company in the UAE because the field is booming and offers a wide range of business opportunities. Furthermore, the tourism business in the United Arab Emirates continues to grow at a quick pace, boosting the revenue of general commerce companies in Dubai.
- Obtaining a general commerce license is simple and becomes a walk in the park with the help of Shuraa’s business specialists. New-age entrepreneurs are always on the lookout for a simple business opportunity, and a general trade company is a top pick for such an endeavor.
- Due to many tax perks and concessions, trading companies in the UAE generate a significant amount of money. They simply have to pay a 5% VAT, and there are no customs duties, corporation taxes, or other fees in Dubai. Furthermore, trading companies in Dubai have complete capital and profit repatriation.
For starting a general trading business, you first need to derive a business plan. A business plan will give direction to your business. Once you have a business plan, choose the jurisdiction of your company. The next step is to find a sponsor for your company. At this stage, you will need to complete all the legal formalities to set up your business. You’ll get the general trading company license once you finish all the formalities.