General Trade License in Dubai and the UAE

7/24/2019 General Trade License in Dubai and the UAE

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General Trade License in Dubai and the UAE

Following the triumphant bid of Dubai to host EXPO 2020, the

foreign trade is expected to touch 4 rillion Dirham! "n fact in

20#$, Dubai trade hit #,$%2 rillion and was the ma&or contributor

in Dubai's (DP with a close to $0)! *eedless to sa+ that that the

demand for goods has drasticall+ increased and faorable trading

enironment has been achieed!

he popularit+ of the demand for a (eneral rading license inDubai and across the Emirates on arious licensing &urisdictions

has immanentl+ increased as well! his actiit+ is a top choice of

inestors and is aailable in all &urisdictions!

General Tradingrefers to an economic actiit+ in which

commercial -rms engaged in importing, trading and re.exporting

of an+ of the goods and products mentioned in details in trade

categor+, except actiities that need special approals!

"f +ou hae multiple trading actiities that are in the same or

di/erent industr+ then (eneral rade license encompasses it all! "t

is important to note that there are regulated products such as

alcoholic beerages, pharmaceutical products, and froen goods

and so on! 1ou reuire a special approal from the respectie

authorit+!

The Common Uses of General Trading License in Dubai and

UAE are as follows:

For local whole sale in the 3E!

For retailing!
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For importing and re.exporting to neighboring (55 countries

and other nations!

For absolute international trading which is basicall+ for

inoicing purposes whilst products does not enter the 3E

(eneral rading 6icense in Dubai can also be used as legal

holding structure within the 3E and other licensing authorities!

he same is used for storage and warehousing!

he uestion of where it is -tting to incorporate a general trading

license depends on +our purpose! he ownership of the compan+

will also determine +our drie on where to setup this up! 7tart.up

cost could be another factor! 6et me answer each and eer+

consideration on this blog!

For those who would require doing actual general trading

operation in Dubai and the UAE

he best &urisdiction if +ou are to do trading operations in within

Dubai, other Emirates and een international mar8ets is to

register the business in Dubai Department of Economic

Deelopment 9DED:! ;hile there said actiit+ can be approed in

bu Dhabi, 7har&ah, &man, uwain orFu&airah! Dubai still has the edge for its business Eco.s+stem!

he facilities aailable in Dubai such airports, seaports, ma&or

roads and highwa+s, properties and other economic

deelopments can put +ou into a global stage all at once!


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he mar8et itself constitutes high olume of demand for +our

goods as compared to other emirates! he aailabilit+ of support

serices that can bac8 +ou up is also a factor for +our growth!

ere are the ad!antages or bene"ts of a General Trade

License in Dubai

5an rade 6ocall+ ? "nternationall+ . On a legal perspectie,

a general trade license holder in Dubai can trade directl+ within

Dubai and other emirates!

6ocal Distribution @ 1ou can be an agent for free one

companies and international companies

ax free &urisdiction @ Dubai does not impose taxation in

income, pro-t, and een on products!

*o paid up capital @ he minimum share capital is $00,000

ED which is not reuired to be deposited in a 3E ban8!

*o udit @ 3nli8e other &urisdictions, it is not mandator+ to

submit an audit report, although, in the memorandum of

association, +ou will resole to hae a +earl+ audit in a corporate

capacit+!

Aer+ 6ow "mport Dut+ @ B) is leied on import which is a

global standard elsewhere

Prestigious OCce or 7tate of the rt ;arehouse Facilit+ @

Dubai is all about propert+ and facilit+ deelopment, needless to

sa+ that when +ou are Dubai, +ou are respected!


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anpower @ 1ou can hae multiple isas in +our compan+

and the sie of the oCce does not determine the number of

emplo+ees +ou can hire

an8 facilities @ 1ou hae a wide range of options for +our

personal and corporate ban8ing reuirement on multiple

currencies!

;hile there are pros in incorporating the general trade license in

Dubai, there are cons that come along! oweer, " want to

highlight the iable solution and put some safeguards for +our

business interest!

ere are the disad!antages of a General Trade License in

Dubai

Ownership @ general trade license in Dubai reuires an

Emarati shareholder who will hae to own B#) of the compan+!

he 4%) can be owned b+ expats!

#olution:(et an indiidual or corporate sponsor from a startup

business consulting -rm! a8e sure that +ou are appointed as the

anaging Director of the compan+ and +ou hae full powers to

run the business! 1ou can insist on haing these etched at the

emorandum of ssociation! 1ou can also reuest to hae signing

powers in the "mmigration and 6abor departments!

igh 7etup 5ost @ s compared to free one incorporation,

Dubai's setup cost is a bit higher! his is because in Dubai, it is

mandator+ for +ou to lease a commercial space which basicall+

eats up most of +our budget!


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#olution:1ou can contact business centers or sericed oCce

proiders for +ou to hae read+.made oCce facilities! usiness

incubation is another option +ou can loo8 at!

(oernment


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discussing an o/shore compan+ in a trading perspectie! ence,

o/shore are simpl+ a license and a ban8 account!

ere are the ad!antages or bene"ts of a General Trading

!ia an %&shore Compan$ in Dubai

#00) foreign or expat ownership is permitted and #00) tax

and dut+ exemption

Full repatriation of the o/shore companies pro-ts and capital

is allowed!

he compan+ can own real estate properties in the 3nited

rab Emirates and an+where else in the world sub&ect to approal

b+


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"t is important to note that o/shore companies are no longer

being entertained b+ international ban8s within the 3E! 6ocal

ban8s howeer are still accepting account openings for such

purpose! *eedless to sa+ that +ou are not to use an o/shore

compan+ for tax easion and to fund terrorist actiities!

ere are the disad!antages of a General Trading !ia an

%&shore Compan$ in Dubai

5annot conduct actual general trading actiit+ within the

3E @ 1ou are limited to do international trading onl+!

#olution:1ou need to appoint an agent or a distributor that has

the proper license to conduct +our desired trading actiit+! 1ou

can also deal with shipping and 6ogistics 5ompan+ who usuall+

hae a general trading license alongside their main business!

5annot rent a commercial space @ eing an o/shore which

literall+ means not distant from the shore, +ou cannot least an

oCce or a warehouse facilit+!

#olution: "f there is a need to receie communication, meet and

greet clients and all other admin support! 1ou can hire business

centers or een corporate serices proiders for this purpose! For

storage within the 3E, +ou ma+ contact logistics companies! *o Aisa ailable @ "f +ou are loo8ing at haing isas in the

compan+, o/shore is not the right setup for +ou business!

#olution: "ncorporate a main land or free one compan+ and be

sure to hae proision for isas according to +our reuirement!


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For those who would require a general trading operation

within the UAE but requires '(( ) ownership of the

compan$

"f +our purpose is to basicall+ be able to do general trading within

Dubai and the 3E, but +ou are not 8een in engaging an Emarati

*ational as a partner, +ou can go ahead and incorporate a

general trading compan+ in the free ones!

1our primar+ consideration should be the location of the free one

if it is near the airport or seaport! "n this case +ou can select to be

in Dubai ;orld 5entral 9D;5: which is in the heart of the l

a8toum "nternational irport! 1ou can also chec8 out Gebel li

Free Hone, which boast its own sea port and is accessible to Dubai

airport! Dubai ulti 5ommodities 5enter 9D55: is also a good

option to consider!

"f +ou are considering the cost of setting up the business and +ou

are willing to compromise on the location of the business, +ou can

consider registering at 5reatie Hone @ a Fu&airah free one that

has oCces in Dubai!


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Hero Duties @there is no duties leied on importing and

exporting!

inimal setup cost @ Free ones o/er a Jexi des8 or smart

des8 facilities which basicall+ trim down the amount of spending

on a full.blown oCce space!

7ingle ;indow for all +our transactions @ here will be

dedicated business support serices including integrated online

facilities for +our transaction! 1ou deal with one authorit+ for

licensing, wor8 permits, isas and all +our needs!

an8ing Facilities @Gust li8e in Dubai, +ou can ta8e adantage

of ban8ing facilities within the 3E in di/erent currencies

according to +our reuirement!

Free one companies are licensed to operate within the free one

and international mar8et! (eneral trading actiities in the free

ones are encouraged and if +ou wish to do the same in Dubai,

+ou need an agent or a local distributor!

ere are the disad!antage a General Trading License in

UAE Free *ones

5annot trade directl+ within Dubai and 3E @ 1ou are limitedto the free one &urisdiction and international mar8et! 1ou can

trade howeer B) will be imposed on +ou!

#olution:1ou need to appoint a distributor haing the competent

permit or license! he terms and conditions of +our engagement

will be based on mutual agreement between +our agent and +our

compan+!


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5annot ta8e an oCce outside the free one @ 1our choices of

oCce space is onl+ within the free one properties and facilities!

1ou cannot lease an oCce space within Dubai or other Emirates!

#olution:usiness centers and 7ericed OCce allows +ou to use

their facilities for re.mailing and their conference rooms!

lternatiel+, if there is drastic need to hae a presence in Dubai,

+ou can setup a branch of the free one compan+, which +ou own

#00)!

6imited Aisa >uota @ "n a small oCce +ou can hae up to 4.Kisas depending on which &urisdiction +ou are registered! he sie

of the oCce basicall+ determines the number of isas that +ou

can obtain!

#olution:"f +ou wish to hae around 2B or more isas in the

compan+ free one ma+ not be the ideal setup for +ou because

these will double +our expenses in terms of the amount of rent!

1ou can register +our compan+ in Dubai to obtain unlimited isas!

*ow that +ou hae an oeriew of the arious uses of a general

trading license, +ou can select which -ts +our reuirement! *ot

eer+one will tell +ou all these information so be careful! ost

business consultant will adise +ou to setup in Dubai because

the+ will earn more, some will adise +ou to be in the o/shore orfree one because it is easier to incorporate! "n the end, +ou can

alwa+s decide for +ourself!

" personall+ adised and incorporated general trading companies

in Dubai and other &urisdictions, it is a straight forward application

process and there is no special approal reuired! 1ou can


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follow six eas+ steps!Do not forget to appl+ or obtain +our

importLexport code!
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Documents

General Trade License in Dubai and the UAE