An Amazing Recovery: Retail Sales in the UAE to Hit $58 Billion by the End of 2021
The significant increase in retail sales can likely be attributed to rapidly increasing vaccination rates throughout the Emirates. Higher vaccination rates and fewer active Covid cases allow more businesses to remain open. This alone has a tremendous impact on the retail sector and the economy at large.
And with Dubai’s World Expo 2020 being held in October, much of the world’s attention will be placed upon the UAE and its economy. For Despite setbacks that have affected the United Arab Emirates in recent years, there may yet be a light at the end of the tunnel. The pandemic has thrown many nation’s economies into disarray, and the UAE was no different. However, their robust economy persevered, and retail sales are expected to grow by 13% this year. And with the industry reaching nearly $58 billion by the end of 2021, forming a retail business in the UAE can be an extremely lucrative endeavor.
182 days, this exposition will draw an estimated 25 million investors and business owners to the region. As a result, there has never been a better time to start a business in the UAE. This massive influx of visitors is expected to boost sales and significantly improve an already re-invigorated economy.
The UAE & Retail Businesses are a Match Made in Heaven
When is the best time to start a retail business? While no time is like the present when it comes to kicking off a new endeavor, a financially strategic answer to the question may be different. Typically, a new company’s best chance for success can be found when a particular area is undergoing a considerable period of growth in terms of both citizens and businesses. Retail businesses thrive because they meet the essential needs of a large population. And they function best when other companies and industries are also growing.
Dubai is also expecting tremendous growth across many different industries. Between the upcoming Expo and the economy’s trajectory over the next few years, there truly isn’t a better time to plan a business setup in Dubai or anywhere in the UAE.
Getting Started with Your Retail Business in the UAE
Starting a new business can be a stressful journey. But MSZ wants to help! Let us walk you through the process of forming your new retail business in the UAE.
There are numerous sectors available to investors throughout the UAE. These regions serve many different industries and offer a variety of business incentives. To properly form your business, you’ll need to be aware of these locations, the industries they serve, and the benefits they offer.
• Free Zones
Free Zones are some of the most popular options for new retail businesses. These areas are specifically designed to cater to foreign investors and business owners by offering lucrative business and tax incentives. Companies operating in Dubai’s free zones are exempt from paying corporate and income taxes and enjoy 100% repatriation of assets and profits.
Another profitable location for investors to form a retail business can be found in Dubai’s Mainland. Investors are given access to a broad market and an expanding customer base.
Now let’s dive into the process of setting up your new retail company.
1. Market Research
For a business to be successful, investors will need a clear business plan and a thorough understanding of the market. This includes developing a grasp of your service or product and the demand surrounding it.
2. Determine Financial Requirements
Retail companies in Dubai are successful in part due to the carefully crafted financial regulations around business operations. Some locations will have specific financial requirements and conditions, like minimum startup capital, that you will have to meet before securing a business license.
3. Gather Documents
Securing a business license is a crucial aspect of any new business in Dubai. You will need to make sure that you’ve gathered all necessary documents to ensure a smooth, streamlined process.
4. Secure a Business Name
Before your business can be official, it needs a name! At this point, you’ll want to submit a request for name approval through the Department of Economic Development (DED). This name must not already be claimed and cannot contain profanity.
5. Choose Legal Structure
The structure of your company will play a tremendous role in how your retail business operates. This will include planning the groundwork of how the company will handle assets, profits, and losses. A few of the legal structures open to your company:
– Limited Liability Corporations (LLC)
A legal structure where the owner is limited in his debt responsibilities.
– Sole Proprietorships
Sole Proprietors are a type of business owned and operated by a single person with no legal distinction between this owner and the business entity.
– Foreign Branches
A foreign branch is a subsidiary of an already-established company, whether foreign or otherwise.
6. Submit Required Documents and Secure Additional Approvals
After making certain that you have all your documentation handy, you are free to submit the application. Some companies may require additional approvals from exterior sources. These may be in the form of letters of approval from previous employers, government officials, and even banking institutions.
7. Pay Fees and Receive Trade License
Once you’ve paid all necessary fees to the appropriate governmental authorities, you should receive your documents and your official trade license. The specific fees you’ll be required to pay will vary depending on the nature and size of your company. Aside from these standard application fees, there are no additional trade license costs in Dubai.
8. Open Bank Accounts
Once you’ve received your trade license, you will need to open a bank account. Dubai has a large assortment of well-respected banking institutions to choose from, including Citibank, HSBC, and Barclays, to name a few.
9. Apply for a Visa
Once you’ve received your business license, you are free to apply for a residential visa for you, your shareholders, employees, and family members. The number of visas available will vary based on the location where you form your business.
Choosing the Right Trade License
When applying for your trade license, several different types are available to you, depending on the business you intend to conduct. These include:
• Commercial License
A commercial trade license in Dubai is a catch-all style license designed for anyone providing general goods or services. This is typically the standard license type for retail business setup in Dubai. This trade license is not meant for those manufacturing their inventory; instead, it is intended for merchants selling finished products. For example, a pottery shop that buys directly from a potter and then sells these products would need a commercial trade license in UAE.
• Professional License
A professional license is designed for businesses that provide specific services, such as consultative services, law offices, and medical practices.
• Industrial License
Industrial trade licenses in Dubai are intended for industrial and manufacturing entities. Manufacturers that produce raw goods, gems, and metals would conduct business under this license.
The type of license you choose will greatly depend on your given business type. Most new retail establishments will choose a commercial trade license.
Work with MSZ Consultancy to Start Your Retail Business in Dubai Today
Operating a business in the UAE as a foreigner can often be an unfamiliar, stressful process. But we’re here to help! MSZ Consultancy is dedicated to being your one-stop-shop for all things business in the UAE. With over 20 years of experience navigating the tricky terrain of Emirati business operations, we have the knowledge to help your business succeed! We are proud to have helped over 32,000 happy customers streamline their business and maximize their profits. Our specialists are familiar with business culture, tactics, laws, and best practices throughout all seven Emirates. From business setup in Dubai to securing PRO services and local sponsorships, we’ve got you covered! MSZ Consultancy is skilled in assisting businesses of any type or size, from smaller startups to larger corporations. Streamline your business today! Give us a call at +971 52 544 1248 and let our business experts help you!