Dubai’s construction industry is booming, the UAE building materials market is expected to hit $11.44 billion by 2033. Planning to start a building materials trading company in Dubai? You’ll need to understand the building materials trading license requirements first.
Setting up requires key decisions: Dubai mainland or free zone, trade license costs, and company formation steps. This guide covers everything from choosing your business structure to company registration, so you can start without delays.
Riz & Mona Consultancy helps entrepreneurs obtain building materials trading licenses for both mainland and free zone setups in Dubai.
Understanding Building Materials Trading in Dubai
Types of Building Materials Trading Licenses in Dubai
A building materials trading license falls under the commercial category—issued by the Department of Economic Development (Dubai mainland) or free zone authorities. It covers import, export, and wholesale of construction materials but doesn’t permit manufacturing.
- Focuses exclusively on construction materials: cement, steel, insulation, tiles, glass
- Specific compliance requirements and Dubai Municipality approval for warehousing
- Mainland cost: AED 30,000–50,000 (all-inclusive setup and fees)
- Covers multiple product categories including building materials, electronics, textiles
- More operational flexibility to add new trading categories later
- Free zone cost: AED 15,000–20,000 | Mainland base: AED 12,500–15,000
- Higher fees for multiple activity groups
Issued by Department of Economic Development:
- Ownership: 100% foreign ownership (no local sponsor needed)
- Market access: Trade anywhere in the UAE—mainland, free zones, government contracts
- Office requirement: Minimum 200 sq. ft. commercial space (Ejari mandatory)
- Visa quota: Unlimited, based on office size
- Renewal: Annual
Popular free zones for materials trading companies:
- DMCC: Best for commodity trading and industry networking
- JAFZA: Ideal for large warehousing and logistics operations
- IFZA & Meydan: Cost-effective for startups
Free zone advantages:
- Ownership: 100% foreign ownership guaranteed
- Market access: Trade within free zone and internationally; mainland sales require UAE distributor
- Office: Flexi-desk options available
- Setup: 1–5 days for company registration
Select precise activity codes matching materials you plan to trade:
- “Cement & Gypsum Trading”
- “Steel Products Trading”
- “Insulation Materials Trading”
Codes can be added later but may require additional approvals or Dubai Municipality inspection. Check the latest Department of Economic Development activity list for 2025.
License Requirements for Building Materials Trading
Basic Eligibility
- 21+ years old, valid passport (6 months validity)
- Clean criminal record certificate
- Bank reference showing startup funds
- No education requirements
Capital Requirements
- Mainland: No minimum (proof of solvency required)
- Free Zone: IFZA (none) | DMCC (AED 50,000) | JAFZA (varies)
Office Requirements
- Mainland: 200 sq ft commercial space + Ejari + DEWA connection
- Free Zone: Flexi-desk to full office (visa quota depends on size)
Special Approvals for Specific Materials
| Material Type | Approval Needed |
|---|---|
| Hazardous chemicals, paints | Dubai Municipality |
| Warehouse storage | Civil Defence NOC |
| Insulation (formaldehyde), coatings | Environmental permit |
| Import/export | Federal Customs Authority code |
| Steel bars, gypsum board | ESMA/GSO traceability |
Compliance Requirements
- UBO Declaration: Disclose 5%+ shareholders to Ministry of Economy
- ESR: Prove adequate UAE presence and operations
- AML/CFT: Register if trading high-value commodities
- Bank Account: Corporate account mandatory post-license
Mainland vs Free Zone Company Setup Comparison in Dubai
| Decision Factor / Aspect | Mainland Company Setup | Free Zone Company Setup |
|---|---|---|
| Core Positioning | Full UAE market access with higher setup and operating costs | International focus, tax benefits, and lower entry cost |
| Best For | UAE domestic sales where 60%+ revenue comes from UAE clients | International trade/exports where 60%+ revenue is outside UAE |
| Government Contracts | Eligible for federal and emirate-level tenders | Not eligible for government tenders |
| Market Access | Unrestricted – can trade anywhere in the UAE | Restricted – mainly within the free zone and international markets |
| Visa Allocation | Approx. 1 visa per 9 sqm; unlimited scaling potential | Package-based (typically 1–6 visas depending on package) |
| Corporate Tax | 9% on profits above AED 375,000 | 0% on qualifying international/free zone income (subject to rules) |
| Customs Duties | 5% on mainland imports | Duty-free within the free zone; duties apply when goods enter mainland |
| Audit Requirement | Mandatory annual audit | Mandatory only if claiming 0% corporate tax and for qualifying free zone status |
| Ideal Use Cases | Direct B2B to UAE contractors, warehouses in Al Quoz/Ras Al Khor, showrooms, large teams (10+ visas) | Import–re-export hub, lean teams (1–5 staff), e-commerce without retail, market testing |
| Tax Strategy | Pay 9% above AED 375,000 in exchange for full UAE market access | Maintain 0% on qualifying income if ESR, office, and FTA filing conditions are met |
| Visa Strategy | 90 sqm office ≈ 10 visas; 180 sqm warehouse ≈ 12 visas, scalable further | IFZA flexi-desk ≈ 1–3 visas; DMCC 45 sqm ≈ around 5 visas (package dependent) |
| Entry Cost & Speed | Higher cost, more documentation, setup time generally longer | Lower entry cost (approx. AED 12K–35K), fast setup (around 1–7 days) |
| Hybrid Use | Add mainland license when UAE sales exceed ~40%, for tenders and direct contractors | Start with free zone for exports, low cost, and duty-free warehousing, then expand |
How to Start a Building Materials Trading Company in Dubai
Choose Jurisdiction & Structure
Decide: Mainland (UAE market access) or free zone (international trade). Most traders choose Limited Liability Company (LLC) for mainland or FZ-LLC for free zones.
Select Activities & Reserve Trade Name
Pick from approved activity list:
- “Building Materials Trading”
- “Cement & Gypsum Trading”
- “Steel Products Trading”
- “Insulation Materials Trading”
Reserve your trade name online via DED portal (mainland) or free zone website. Must comply with UAE naming rules.
Submit Documents
Upload to relevant authority portal:
- Passport copies (6+ months validity)
- Passport photographs
- Bank reference letter
- Business plan
- Tenancy contract (Ejari for mainland) or free zone lease
Pay initial approval fees.
Get Initial Approval & Secure Premises
Receive Initial Approval Certificate (1-3 days). Secure location:
- Mainland: 200+ sq ft commercial space + Ejari (AED 215)
- Free Zone: Flexi-desk to physical office
Obtain Final License
Submit:
- Tenancy contract
- Initial approval
- Notarized MOA
- Activity-specific approvals (Dubai Municipality for warehouses, Civil Defence NOC)
Pay license fees:
- Mainland: AED 10,000-15,000
- Free zone: AED 12,900-32,000
Processing: 5-10 days (mainland) | 1-5 days (free zone)
Open Corporate Bank Account in Dubai
Apply with trade license to:
- Local banks: Emirates NBD, Mashreq, DIB
- International: HSBC, Standard Chartered
Bring: License, MOA, board resolution, passport, Emirates ID, business plan, bank statements.
Approval: 15 days to 3 months (KYC/AML checks)
Apply for Visas
Process investor visa first, then employee visas.
Includes: Medical test, Emirates ID, visa stamping
Timeline: 10-15 days per visa Cost: AED 4,000-5,000 (investor) | AED 5,000-7,000 (employee)
Register & Launch
- Register with Federal Tax Authority (VAT + corporate tax)
- Get import/export codes from Federal Customs Authority
- Finalize warehouse approvals if needed (4-8 weeks)
- Activate supplier agreements
- Start trading
Total Timeline: 3-6 weeks (free zone) | 6-10 weeks (mainland with warehouse approvals)
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Cost Breakdown: Building Materials Trading License Dubai
| Cost Item | Mainland | Free Zone |
|---|---|---|
| License fee | AED 10,000-15,000 | AED 12,900-32,000 |
| Office/premises | AED 15,000-40,000/year | AED 5,000-20,000/year |
| Registration & approvals | AED 3,000-5,000 | AED 2,000-3,000 |
| Investor visa | AED 4,000-5,000 | AED 3,750-5,000 |
| Chamber membership | AED 1,370 | N/A |
| Ejari/admin | AED 215-1,000 | Included |
| First-Year Total | AED 35,000-60,000 | AED 15,000-35,000 |
Annual Recurring Costs
| Cost Component | Mainland | Free Zone |
|---|---|---|
| License Renewal | Same as initial fee | Same as initial fee |
| Office Rent | AED 15,000 – 40,000 | AED 5,000 – 20,000 |
| Visa Renewals | AED 5,000 – 7,000 per person | AED 5,000 – 7,000 per person |
| Audit Fees | AED 5,000 – 15,000 (mandatory) | Not required unless claiming 0% tax |
| Accounting & PRO | AED 7,000 – 15,000 | AED 7,000 – 15,000 |
Additional Costs (If Applicable)
| Cost Component | Estimated Cost |
|---|---|
| Warehouse Approvals | Dubai Municipality: AED 5,000–15,000 + Civil Defence NOC: AED 2,000–5,000 |
| Bank Account Setup | AED 1,000–3,000 |
| Additional Employee Visas | AED 5,000–7,000 per visa beyond initial quota |
| Warehouse Fit-Out | AED 10,000–50,000 |
Budget Smart
Start with free zone flexi-desk (AED 12,900) to test market. Add mainland later when UAE sales justify the extra AED 20K-40K investment.
Essential Documents Required for a Materials Trading Business in Dubai
- Personal Documents
Valid passport copies for all shareholders (minimum 6-month validity) and recent passport-size photographs are required.
If applying under mainland and holding a company visa, an NOC from the current employer is also mandatory.
- Business Formation Documents
A DED/free zone–approved trade name reservation and a notarized MOA outlining the shareholding structure are required.
Corporate shareholders must also provide a board resolution and Power of Attorney authorizing company formation.
- Premises Documentation
Mainland setups need a valid tenancy contract of at least 200 sq ft along with an Ejari certificate.
Free zones accept flexi-desk, shared office, or full office lease agreements depending on the business package.
- Financial Documentation
Banks require a reference letter confirming available capital and financial standing before account opening.
A detailed business plan covering trading activities, target markets, and financial projections is also essential.
- Activity-Specific Approvals
Dubai Municipality approval is mandatory for warehouses storing chemicals, paints, or hazardous materials (4–8 weeks).
Civil Defence NOC is required for any warehouse, while an Import/Export Code is needed for cross-border trading (1–2 weeks).
- Mainland Checklist
Passport, NOC (if applicable), trade name approval, MOA, Ejari lease, bank letter, and municipal approval for warehouses.
These documents ensure compliance with DED requirements for materials trading activities.
- Free Zone Checklist
Passport copy, business plan, MOA, lease agreement, bank letter, and board resolution for corporate entities.
IFZA, DMCC, and other free zones follow streamlined processes with minimal documentation requirements.
Important Notes
Foreign documents must be attested by the UAE embassy, translated into Arabic, and authenticated by MOFA.
This ensures all paperwork meets UAE legal and regulatory standards.
FAQS (Frequently Asked Questions)
Can I add more business activities to my building materials trading license later?
Yes. Submit a request to DED or your free zone authority. Additional fees: AED 1,000-3,000 per activity. Some may need Dubai Municipality approval. Processing: 3-5 days.
Do I need a UAE resident to open a building materials trading company?
No. 100% foreign ownership is allowed. However, one shareholder must obtain a UAE residence visa post-license to maintain active status and sign documents.
Can a free zone company sell directly to construction companies in Dubai mainland?
No. Free zone companies need a local distributor or dual license for mainland sales. Direct sales without authorization result in fines and license suspension.
What happens if I don't renew my trade license on time?
Late renewal penalty: AED 1,000 first month + AED 100/day after. License cancelled if not renewed within 6 months. Operations must stop until renewed.
Is audit mandatory for building materials trading companies?
Mainland: Yes, annual audit required. Free zone: Only if claiming 0% tax or revenue exceeds AED 50 million. All must maintain accounting records.
Can I operate my building materials business from home in Dubai?
No. Mainland needs 200+ sq ft commercial space with Ejari. Free zones require registered address (flexi-desk from AED 5,000/year). No residential addresses allowed.
How long can I stay outside UAE without losing my residence visa?
Return at least once every 6 months. Visa automatically cancels after 6 months continuous absence. Extended absence may trigger Economic Substance compliance checks.
