Just like any other company, Dubai also gives entrepreneurs the opportunity to open a warehouse business. And the future of this business is unimaginably bright, especially after the COVID pandemic.
Now, the question arises, how to start a warehouse business in Dubai, UAE? This guide will cover all the aspects and details that you need to know before establishing your logistic company.
Let’s get started.
Table of Contents
Things to Know Before Starting Warehouse Business in Dubai, UAE
Conduct In-Depth Market Research
Before launching any type of business, always undertake deep market research. The playing area, its major players, and, most importantly, the competitors should be your primary focus. It will also assist you in determining what motivates customers and what are current market trends.
Try your level best so that your total investment isn’t completely lost; it’s a good idea to form a partnership with a local company that has the resources and skills to assist you with your newly established startup.
After determining & evaluating direct competitors and conducting in-depth market research, you will be able to determine which business area will be the most lucrative for your setup. Your company can then concentrate on offering the finest possible service to that specific area or the best quality product to the customers. As a result, your profits will increase.
Documentation, Customs Procedures, and Paperwork
You must be familiar with all documentation requirements, customs procedures, and paperwork. Before entering the logistics industry, you should be fully informed about the clearance process and customs.
Analyze the Competition
Businesses should keep a watchful eye on their competitors and their activities. It’s a great approach to learning what other players are doing to get success. And where does your business strategy fall short? The direct competition will help find out whether or not your selected business idea is lucrative.
Do Real-Time Meetings with Clients
Meeting physically with a logistics supplier will prove to be advantageous for warehouse businesses because it decreases the risk of errors and facilitates communication between both parties involved in the business operations. A legal agreement with credit terms is also required. This makes resolving future disagreements and avoiding new ones easy. Credit terms with a formal agreement are also essential. This makes it easier to resolve any future conflicts.
Understanding the Logistics Sector
Dubai’s logistics market is quite fragmented, with so many vendors scattered around the Emirates. This is one of the many reasons why you should hire an experienced firm. It is usually well-versed in all customs procedures and will save you clearance fails and money.
Hiring Experienced and Skilled Employees
Any company’s success is entirely dependent on the quality of its staff. Because an employee is a valuable asset to the firm who understands exactly what their job demands, especially if they can swiftly adjust to the dynamic and ever-evolving business conditions. Employees will be knowing several secrets that are vital to the company’s success. That’s why they must be loyal to the business.
The presence of some of the world’s busiest airports and seaports is a sign that logistics in Dubai will thrive. It also has an excellent road network to the UAE’s neighboring countries. So, you can safely start a warehouse business in Dubai, UAE.
Your warehouse business’s marketing campaigns will break or make your prior efforts. Solid marketing will provide you with a head start and excite the curiosity of your potential clients. It is recommended that you get services from a marketing service provider to handle it for you if you doubt your capability of doing it yourself.
Delivering the finest service possible to everyone is another strategy to attract customers. This will leave your customers happy and satisfied. A happy consumer will spread the word everywhere, advertising your company for free.
Setting up a warehouse business in Dubai has a number of advantages, including complete ownership and relaxation on taxes; businesses pay extremely low taxes. The government has implemented no visa restrictions, no minimum capital requirements, and no currency restrictions on companies. Dubai has a free freight and cargo connection, as well as free-zone privileges, which gives you more opportunities to expand your business operations across the UAE.
Planning Long-Term Goals
Your firm should determine and plan out the company’s long-term goals in order to avoid being trapped and stagnant in the past. Otherwise, you will miss out on the chances and will be too afraid or content to take a calculated risk that will guarantee you a solid and profitable return.
Those who plan on starting a warehouse business in the UAE should hire company formation consultants such as Riz and Mona to seamlessly establish their business. All of your business setup requirements can be solved by getting in touch with business setup advisors at Riz and Mona Business Consultancy.
Required Documents for Starting Warehouse Business in Dubai, UAE
Only a little bit of paperwork is needed to start a warehouse business in Dubai. In general, colored pictures of the owner and shareholders, a copy of your passport, and a completed license application form are often the only requirements.
However, you should maintain the following documents on hand:
- Document showing legal agreement of the company’s physical address
- Shareholders’ passport copies
- Memorandum of Association (MOA) and Attested Articles of Association (AOA)
- Proof of trade name reservation
- Personal data of the managers and shareholders
- Proof of initial activity approval
Procedure for Warehouse Business Setup in Dubai:
The steps for starting a warehouse business are as follows:
Define Operations of Your Company
The warehouse business involves a huge variety of operations, including transportation, freight, cargo, and so on. So, if you are planning on establishing your warehouse business in the UAE, it’s critical for you to determine what type of business activities you’re going to perform.
Choosing Economic Zone and Name of Company
You can choose between a free zone and the mainland. Both of these jurisdictions have their own specifications, pros, and cons. Choose the one that suits your business the most. Your company name should be out-of-the-box and uncommon. Any profane phrase should be avoided in the name.
Let us discuss the warehouse business setup formation in the two major jurisdictions of the UAE, the free zone and the mainland:
Warehouse Business Setup in Dubai Mainland
Depending on the jurisdiction, your business in Dubai can enjoy countless advantages. Warehouse businesses in the mainland are a popular choice since they can benefit from various advantages that the government offers in the country. These advantages include access to the local markets and the ease with which they can distribute their products. The choice of selecting the mainland is for those who want complete control over their company and the freedom to sell both locally created and imported goods.
Warehouse Business Setup in Dubai Free zone
In Dubai, there are numerous free zones for warehouse businesses. Because certain economic zones are solely made for warehouse business, you can expect good income from the free zone. Free zones, similar to the mainland, are perfectly connected via canals, roads, and airplanes, making your business simple, and easy and have excellent infrastructure and location.
However, there are several restrictions that you should know when choosing the free zones:
- You can’t work with clients who aren’t under your free zone license’s economic zone
- You may face some jurisdictional restrictions when partnering with government agencies, big locals, or mainland businesses.
Following are the four major business hubs to set up warehouse business in Dubai:
Jebel Ali Free Zone or JAFZA
JAFZA or Jebel Ali Free Zone was founded back in 1985. It is currently one of the best free zone economic zones in Dubai and is home to above 8000 entities functioning in it. JAFZA attracts almost 24 percent of foreign direct investment in Dubai.
Dubai Airport Free Zone or DAFZA
Another popular area for a logistics business setup in Dubai is the Dubai Airport Free Zone or DAFZA. Dubai airport is home to one of the busiest airports in the world. The airport has a trading route to connected regions and Europe, allowing companies working in DAFZA to gain awesome benefits. Here are the headquarters of some of the world’s largest logistic conglomerates. DAFZA is home to over 15000 employees and more than 1800 businesses.
Dubai Logistics City or DLC
Dubai World Central or the DLC is the first platform in the world that is specifically dedicated to promoting UAE’s trade and logistics. It is 140 square kilometers in size. This free zone is the government’s largest and most ambitious undertaking in Dubai, UAE. The DLC’s companies are spread out over a large territory, with an annual air cargo turnover of about 12 million tonnes.
Dubai South Free Zone or DSFZA
The Dubai South Free Zone was established back in 2006 by the Dubai government. It provides awesome government support and world-class infrastructure. The Dubai South Free Zone is located near the Al Maktoum Airport and covers approximately 145 square kilometers of area. This jurisdiction is well-designed, with convenient access to Dubai’s center and high-tech warehousing facilities. The government has made significant investments in the free zone in order to ensure its future success as an extremely prosperous Dubai jurisdiction. In the UAE, this is the most popular economic zone for businessmen who opt for opening a warehouse company.
Submitting an Application for a License
To make your license application, take the following steps:
- Fill out the application form completely.
- Submit the necessary documents required to register your company.
- It is possible that the registration process will take almost 15 days.
- A complete business strategy must be submitted.
- Submission of any required or requested extra documentation
- Submitting visa applications
- Getting a business bank account
- You can obtain a business license after submitting and receiving approval of all documents and creating a bank account.
- Pay the application charges to the authorities of jurisdiction.
- In the end, your company’s incorporation certificate will be issued by the company’s registrar.
Business Activities Licensable for Storage and Warehousing Company in Dubai
The planning, implementation, development, and movement control of information, goods, or services within any supply chain and between places of consumption and origin are the basic operations of a warehouse business. The following are the types of warehouse business activities that are allowed legally by the government in Dubai:
3PL or Third-Party Logistics
All service contracts including the shipping and storage of a product fall under 3PL. This includes transportation and warehousing services for your customers.
It includes providing land, air, and sea, and freight brokerage services, such as customs and insurance brokerage.
Warehouse facilities, packing goods, goods inwards, loading, unloading, sorting of raw materials, and more are included in it.
This includes the preparation of customs declarations and bills of lading, as well as representation of a declarant with customs authorities.
Check out the following cargo transportation services allowed in the UAE:
Land Cargo Transportation
It includes transport by rail and road, expediting shipments, and dispatching groupage shipments.
Air Cargo Transportation
Among the services available for air cargo transportation are packing and sorting at airports, air freight, freight forwarding, air fleet management, and leasing.
Sea Cargo Transportation
Licensed sea cargo transportation services include ROROs, containers, and bulk sea freight, sorting and packing at seaports, container, and vessel leasing, among others
How Riz and Mona Can Help You
If you are thinking about starting a warehouse business in Dubai, UAE, you can contact Riz and Mona and enjoy the hassle-free establishment of your company.