Quite a few years ago, the United Arab Emirates was an avid exporter of crude oil. However, today it has developed as the world’s largest center of finance and logistics. With logistics at its peak, encouraging international trade relations, Dubai’s economy is showing stable growth and balanced development, particularly in this sector. Besides, Dubai is an international transit hub, uniting large airports, roads, and sea ports, which makes the formation of a logistics business in Dubai more constructive.
The logistics business is one of the most profitable ventures today. Dubai’s positive business climate is the major driving factor for business people to start their logistics service company here. Nevertheless, a businessman must have a foolproof function plan and deep knowledge of the industry in order to increase the achievements of the business. Hence, this article will share detailed information on how to start a logistics company in Dubai, and what are the perks and benefits one can gain from it.
What work does a logistics company do?
Basically, a logistics company specializes in delivering various services including product storage, re-packaging, delivery services, etc. Therefore, this sector is at its peak building trade relations among nations.
Additionally, many business activities can be licensed for a logistics business in Dubai. For example,
- Customs and freight broker – Customs declaration, Bills of lading, Cargo clearance
- Storage and Warehousing – Warehouse management, goods inwards, goods sorting and packing, loading and unloading
- Transportation
- Land cargo – Transportation by road or rail, speed up shipments, dispatch support for groupage load
- Sea cargo – RORO and bulk sea freight, packing and sorting of goods at seaports, vessel and container leasing
- Air cargo – Air freight, air fleet management, leasing, and freight forwarding, goods packing and sorting at airports
- Third-party logistics – A system-wide package of services and management for a client’s entire supply chain. Involves storage and shipping of commodities, inventory management, etc.
Things to know before starting a logistics business in Dubai
Given the perks and benefits, there is no better place than Dubai to open a logistics business in Dubai. However, there are certain things to keep in mind before getting into business –
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Documentation, paperwork, and customs-related process
While planning for a logistics business in Dubai, it is equally important to be well aware of the process related to customs, documentation, and relevant paperwork. Besides, you must have complete knowledge of the customs and clearance process as well.
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Personal meetings with clients
Meeting the clients in person can prove extremely helpful for your logistics business. Personal dealings ensure clear communication between all involved parties. Hence, it reduces the probability of any kind of mishaps and also sorts out any future conflicts or misunderstandings.
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Understanding the market
With a large number of suppliers spread all over the UAE, the logistics market here is pretty uneven. Therefore, to reduce costs and any clearance fails, it is substantial that you arm yourself with UAE’s custom rules and have a good understanding of the logistics and trade market.
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Scope of growth
Dubai comprises some of the world’s busiest seaports and airports. Moreover, the road links to the neighboring Emirates and countries are also great. Therefore, planning a logistics business in Dubai could be a feasible option as it would be well-assured to flourish domestically as well as internationally.
Perks of setting up a logistics business in Dubai
- Taxation benefits
- No requirement for minimum capital
- Flexible trading
- Free zone benefits
- Excellent infrastructure facilities
- Opportunities to work with government bodies
- No currency in currency limitation
- Low customs charges
- An array of business activities
- Multiple visa options
- Free cargo and freight connection
- Less paperwork
- Terrific transportation system
- Best telecommunication facilities
- Great connectivity
- Government initiatives supporting logistics
- Pool of talent
- Ownership benefits
- Favorable location
- Easy legal formalities
- Modern logistics facilities
- In-build warehouse facilities
- Well-organized distribution system
You may like it: How to Open Business Bank Account in Dubai?
How to start a logistics company in Dubai?
The procedure for opening a logistics company in Dubai has been listed down here :
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Determine the business activity
At first, you need to specify the area of logistics you wish to operate in. However, you must also ensure that the selected activity is approved by the Dubai Department of Economic Development (DED). Also, make sure to list down every chosen activity while applying for a logistics license. Any failure could lead to issues further down the line.
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Select a jurisdiction
Every jurisdiction has its own distinct benefits and advanced facilities. Hence, the investor can choose accordingly depending on their budget, and other company requirements.
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Choose a company structure
Dubai has several options for company structure for your logistics business. For example, sole proprietorship, Limited Liability Company (LLC), branch office, etc. you can choose a suitable business structure as per your business needs and requirements.
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Finalize a company name
Finding a proper brand name can be really stressful. Moreover, you also have to be vigilant to abide by the strict set of naming conventions by the UAE government. Any violations of these naming rules can result in grievous penances.
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Obtain initial approval
After registering the trade name of the logistics company, you need to seek approval for initiating your business in Dubai. Hence, for that purpose, you must submit the requisite application to the authorities and obtain initial approval for launching the firm.
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Apply for the license
Applying for a business license is the most crucial step in the process. Once you decide which jurisdiction you wish to establish your company, it becomes easy to identify the authorities you need to approach for the license application. For example, if you choose Dubai mainland for your logistics company, then make your license application to the DED(Department of Economic Development). Whereas, if you wish to launch your venture in any of the Dubai free zones, then you can apply for a license from the respective free zone authorities, then the respective free zone authorities will issue the license. Further, make an application for a license, present the needed documents and make the payment of requisite fees.
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Collect your license
The authorities will verify and cross-check the documents and accordingly approve the application. Further, they will issue the license as per the process.
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Make the visa applications
You have your business license, now you need a residency visa to work in the UAE. And therefore, you must make an application for your UAE visa as soon as possible. The process can be a bit longer with all the biometric scanning, medical tests, chest x-ray, etc., but once you acquire your UAE visa, you can easily sponsor others for their visas too. Others include your dependents such as spouse, parents, children, housekeeper, etc.
Furthermore, the Dubai government allows you to apply for multiple visas depending on the size of your company, your chosen setup, and your personal earnings.
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Start a corporate bank account
You might also need a corporate account to manage your business transactions. A corporate account in a reliable bank ensures smooth financial dealings and also keeps a robust track of your business cash flow.
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Launch your logistics business
You have successfully completed all the above steps. So, now you can proceed with the business activities of your logistics business, and look out for customers and contracts.
Documents required for logistics business setup in Dubai
Before you get on to open your logistics company in Dubai, make sure you have all the required documents with you. These may include –
- Passport copies of the shareholder
- Personal details of the shareholder
- Trade name reservation approval
- Initial approval certificate
- Attested MOA and AOA
- Legal agreement of official address of the company
Main logistics business hubs in Dubai
- Dubai South Free Zone
- Dubai airport Free Zone
- Jebel Ali Free Zone
- Dubai World Central
If you still have any sort of queries regarding setting up a logistics business in Dubai, then consult with the business experts of Shuraa Business Setup. Shuraa is a leading consulting platform in the UAE. Moreover, with our wide experience in the field of consulting and business setup, we share incredible connections with relevant higher authorities of Dubai, UAE. And hence, we will provide all assistance in setting up your logistics firm in the UAE.