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The Process of Starting a Trade Business in Dubai

Business in dubai
In: Business

Suppose you are looking for a place to start your business, then no land is better than Dubai. Dubai is considered a trading hub for the middle east and north Africa. Dubai is the boat that only floats towards success. It is full of benefits for the businessmen. The GDP of Dubai is increasing with every passing year. According to the survey, the economy of Dubai expanded by 2.1% in 2019; in 2020, it expanded by 3.8%. The economy’s growth is increasing daily, and the number of entrepreneurs is increasing at the same percentage. Furthermore, starting a business in Dubai is comparatively simple, especially in the free zones of the UAE. Things businessmen need to know before starting a trade business in the Dubai region:

Existing Zones and their benefits

Dubai has three different zones free zones, mainland and offshore. These three zones are different from each other and have different advantages. Businessmen who want to enjoy 100% ownership and 0 taxations can set their business in the free zone. The government of Dubai introduced this zone to attract new businessmen. It is a particular economic area with unique benefits. One limitation is that the businessmen do not allow direct trade with the local market. The mainland is more and less like the free zones. Currently, 30 free zones are working in Dubai.

The benefits of offshore are like free zones, but the main difference between these zones is the operation of the business. Companies offshore are not allowed to have business activity inside the UAE. They can do business outside Dubai. It also has a minimum capital deposit limitation. A sponsor is required to run the business smoothly.

Type of Licenses

Dubai offers different types of licenses to its entrepreneurs. Apart from deciding the zones, the entrepreneur also needs to identify the required license type. There are three main types of licenses to work in Dubai. The Department of Economic Development issue these licenses.

Industrial license

The manufacturing-related companies come under this category. The companies manually or mechanically transform natural materials into final products. Textiles manufacturing, metal manufacturing and paper manufacturing are examples of this category.

Professional license

The government issued the professional license to the service-providing companies, craftsmen or artisans. Companies related to the medical field and beauty salons apply for this license.

Commercial license

Companies linked with trading activities or buying or selling the goods need to obtain a commercial license. Import and export, sales, logistics, travel and tourism, general store and real estate-related businesses can avail of this license.

Step By Step Guidance for general trading business

There are five significant steps an entrepreneur needs to know before starting a trade business within the boundaries of Dubai. The steps are following

Identify the business activity

It is the initial and essential step to know the type of business any trader wants to start. The government suggests that entrepreneurs have a proper plan before starting a general trading business in Dubai. According to them, the plan consists of the following steps

  • Identify how much investment you have
  • What will the strength of the company be?
  • Which products you will trade
  • Do proper market analysis
  • Where you will set your office
  • Market competition

The entrepreneur can formulate the business plan according to the given steps. It helps the businessmen to identify all the possible aspects of the businesses.

Nature of activity

The trade entrepreneur has limitless activities to do. But if he plans to work on the limited activities, he needs to fill out the application for specific trade activities. On the other hand, the business setup will be classified as a general trading company if the entrepreneur plan to do several trading activities. The authorities will process the application according to the general trading license. A general trading license allows the investor to carry out several trading activities. That is why it usually costs on the higher side.

Pick a location for business

For the trade business, location takes importance. The businessmen need to choose the location wisely because the flourishment of the business depends on the location of the business. To decide the location, businessmen should have proper information about zones. You can take help from the upper data to understand it well. Usually, businesses are classified into two types mainland and free zones in Dubai.

Get a trading license to operate

Businessmen need to make sure of the authenticity of the business to run the business smoothly. The trading business must run legally. Legal businesses do not run on the premises of Dubai. The businessmen need to get a general trading license from the concerned authority for this purpose. After that, the businessmen can do several trading activities related to clothing, electronic appliances, furniture, etc.


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