Dubai has set itself apart as one of the leading hubs for business setups, not just in the Middle East, but for worldwide global trading. Both the city and country have become financial centers for many business sectors, including logistics, trading, and hospitality, not the mention the growth that’s been shown in areas like technology, healthcare, and renewable energy generation.
If you’re a foreign citizen with the will to start a general trading company in Dubai, you’ll need to start by obtaining a general trading license, especially in the case of wanting to get involved in multiple trading activities. Dubai is a forward-thinking area which has decided to become intentional about allowing trading businesses to conduct all types of trading activities under the umbrella of a single business license. The local government authorities have established their vision for making Dubai, UAE, one of the biggest economic zones in the world, and seek to attract aspiring entrepreneurs from all over the globe. If you’re looking to start your own general trading company, then Dubai is honestly the best place to do it!
What exactly is general trading about?
A general trading business involves incorporated under a general trading license which allows for the import, export, and distribution of various goods and products. Under this license, a business entrepreneur is permitted to trade multiple products from different industries, including those which might be completely unrelated to each other. For example, you can choose to trade in furniture, home applications, apparel, and more under the auspices of this trading license. Be aware that the trading of certain materials will require other approval from higher authorities before legal distribution to the market is permitted, including items such as alcohol, guns, or cigarettes.
Benefits of operating a general trading company in the UAE
One of the main benefits to obtaining a UAE general trading license is its flexibility. Under this license, you are free to trade almost anything, with the exception of a few restricted items, including oil, tobacco, alcohol, and firearms. What’s more, you won’t require any additional licensing to do so. The general trading license permits you to trade a variety of unrelated goods, from food, to clothes, to toys, to computer parts, to building materials, to jewelry. However, while you’re free to trade various goods, you must specify precisely which goods you intend to trade when submitting your license application. Even so, you have the option to add on some additional trading activities to an existing license later on, should you wish to diversify your offerings. Some of the other benefits include the following:
• Easy, hassle-free business setup with an affordable business incorporation cost.
• Can start your business in the Mainland or in a Free Zone – you choose!
• Can trade locally or internationally.
• Ability to obtain multiple visas.
• Can sponsor residence visas for dependents, as multiple shareholders are allowed to be a part of the business launch and ongoing operations.
How to start a general trading company in Dubai?
1. Decide the commercial jurisdiction
A general trading company in Dubai can be incorporated in either the Mainland or inside a Free Zone. If you’re looking for a more budget-friendly option, then choosing to operate in a Free Zone might be your best bet. Opening a general trading company in a UAE Free Zone is an affordable option where the cheapest general trading licenses are issued. On the other hand, if your goal is to get into the wider UAE market, you can enter the Mainland with the ability to trade goods without restrictions.
2. General trading as a business activity
General trading as a business activity can be an amalgamation of other activities which may or may not require any external approvals. This can be tricky for a new entrepreneur to navigate initially, so it’s highly recommended that you consult with a business setup expert like MSZ Consultancy.
3. Choose a company name and submit a license application
There are certain things to keep in mind when choosing a name for your company. You’ll want to avoid references to certain prohibited words and terms, as outlined by the UAE governing authority. Once your company name has been approved, you can then move forward with applying for a trade license. The good news is that licenses are typically approved within a matter of days!
4. Procuring an office space and warehouse
Since setting up a general trading company in Dubai, UAE involves the physical trading of goods, you’ll obviously need to secure the use of a warehousing facility. You can either get in touch with a third-party agent who has contacts for available warehouse space, or you can also opt to just set up your own warehouse from scratch.
5. Customs considerations
Whether your business will involve the import or export of goods by sea or air, passing through UAE customs is a primary obligation. In the UAE, an entrepreneur will need to obtain an import code from UAE customs in order to bring products into the country, and will of course need to pay any applicable import duties. You can register with the customs authority in whichever Emirate or Emirates that you plan to do business.
Ready to begin your company setup in Dubai?
We hope this blog has provided you with some helpful information, and has helped to give you some clarification about what it takes to set up a general trading company in Dubai. In many ways, the process is easier than you may think! But even though it’s a relatively straightforward process, some prior knowledge and expertise is still required for smooth navigation. To that end, your best course of action is to connect with us at MSZ Consultancy today! We’re local UAE company formation specialists, and we can guide you to make the process as smooth and pain-free as possible. MSZ Consultancy is a team of professionals which exists to help aspiring individuals, entrepreneurs, businesses, firms, and SMEs just like you! Let us worry about the details, rules, and regulations, and then you can focus on getting your UAE business up and running!
Frequently Asked Questions
1. How can I start my general trading company?
• Reserve a trade name for your business and get it approved from the Department of Economic Development (DED) of the concerned Emirate
• For a Mainland business, you’ll need a local sponsor who will own 51% of shares in the business
• Notarize all documents needed for starting your business
• Obtain external approvals if needed as per the proposed activity
• Submit the documentation and license fees
• The DED issues your trading license
• Get your office space set up
2. What is the cost of a general trading license?
The cost of a General Trading License in Dubai is typically in the range of AED 28,000 – 40,000. There are several factors which will affect the cost of the license, including specific business activity, visa quotas, etc.
3. What do general trading companies do?
General trading companies can operate as simple traders, but they can also combine their business with other interests.
4. What are the documents required to start a general trading company?
• Passport copies of all owners/shareholders
• Residence visa copy with entry stamp for any shareholders (if applicable)
• No Objection Certificate for shareholders/owners
• Proposed trade name
• Application form
• Copy of Memorandum of Association
5. What is the difference between a general trading company and a trading license?
A general trading company is a business that seeks opportunities in import and export in the UAE. In order to operate the said business, a general trading company should have a general trade license. Even if you have multiple trading activities across more than one industry, a general trade license should cover it all.