The United Arab Emirates (UAE) is among the fastest-growing trade centres in the world. Its imports amounted to more than 420 billion in 2022 alone. It is among the leading exporters of crude oil and related items. The country’s strategic location, ease of doing business and growing market are among the many reasons why it is a lucrative proposition to set up an import-export business. In this article, we will tell you all about ‘the why’ and ‘the how’ to set up an import-export business in the UAE. By the end, you will know why you should start an import-export business and the steps to take for it.
There are multiple reasons why the UAE is an excellent location to start your import-export business 1. Low to no taxation One primary reason many business owners turn to the UAE is the tax benefits of running a business in the region. There are multiple tax relaxations in the UAE mainland. For instance, there is a 0% tax on income up to and including AED 375,000. But things get even better in UAE free zones. Qualifying free zone person is taxed 0% corporate tax on the qualifying income for the free zone. 2. Strategic location The UAE’s geographical location makes it an ideal trade hub. The quick connectivity with Asia, Africa and Europe makes it an ideal location to start an import-export business. And with the abundance of seaports in the region, the transportation of goods becomes a cheaper affair. 3. Excellent infrastructure The infrastructural facilities in the UAE are second to none. To run an import-export business, you would require reliable facilities to move freight. You get great connectivity through land, water and air if you set up an import-export business in the UAE. Additionally, the terminal points such as ports also facilitate the smooth movement of cargo. 4. Supportive government Another huge advantage of starting an import-export business in the UAE is the support from the government and authorities. There has been a push by the government to make the region trade-friendly. The trade policies and excellent facilities, such as free zones are a great reflection of the endeavour. The government has also signed free trade agreements with various countries to make import-export business in the UAE even more favourable. 5. Booming market Thanks to the flourishing economy of the UAE, it is a lucrative market for various imports. The region is also becoming home to various industries opening up even more options for imports. Similarly, for exporters, there is a lot to work with. Some of the largest exports after oil include gold and broadcasting equipment.
1. Choose a business location: Mainland or Free zone The first major consideration for starting an import-export business in the UAE would be to choose a location for your business operations. While there are multiple options, all of them can be classified into two categories: Mainland and Free Zone. If you decide to register your import-export business in the UAE mainland, then you will have to approach the Department of Economic Development (DED) for a trade licence. If you are planning to register your import-export company in a UAE free zone, then you will have to approach the relevant Free Zone Authority (FZA) for the licence. Here are a few things you might want to keep in mind while making the decision: - Free zones are exempt from customs duties - Some free zones in UAE offer 0% VAT advantage - A free zone business can operate only in the free zone and internationally - Free zone business activities are exempt from corporate or personal income tax If the nature of your import-export business is going to be such that it does not cater directly to the UAE mainland, then it might be better for you to register the business in a free zone. While the process of setting up import-export businesses in mainland and free zones are mostly similar, there are still differences between them. The subsequent steps mentioned in this article are going to be relevant to free zones, especially the Ras Al Khaimah Economic Zone (RAKEZ). 2. Get a trade licence The UAE free zones allow only certain types of business activities. To start your import-export business in the UAE, you need to get a trade licence from the relevant free zone. The free zones offer a list of business activities allowed, and you can easily register your import-export business through it. 3. Decide company legal structure and trade name You will have to specify which of the following legal structures is your company going to follow: - Free Zone Limited Liability Corporation (FZ LLC) - Free Zone Establishment (FZE) - Free Zone Company (FZ Co.) The structure will determine what set of regulations apply to your company. You will also have to finalise and register a trade name. The UAE has laid down a set of guidelines for naming companies. You need to adhere to all those rules while coming up with a name for your company. 4. Understand custom compliances and seek necessary approvals Import-export is an umbrella term with various nuances. Based on the specific nature of your import-export business in UAE, you will have to understand the necessary compliances. Once you have a clear understanding of the compliances you can reach out to the customs department for the necessary authorisations and permissions. Here is a comprehensive manual on Customs Services provided in the free zones. 5. Pay the fee and get approvals to get started Once you have clarity on everything that is needed to start with your import-export operations, you can pay the fee, provide documentation and get approvals from the necessary authorities.
Starting an import-export business in the UAE might seem tricky at first glance. But it is not, especially if you are going to operate from a free zone like RAKEZ. With a complete suite of customisable services, you can easily set up and start an import-export business in the UAE. Our Business Development professionals will help you with the selection of a suitable legal entity, licence type and facilities. They will further help you with application submissions and documentation to help you receive the licence and get the business up and running quickly. And if you still have any questions, feel free to reach out for a free consultation today.
1. What are the tax benefits of starting an import-export business in the UAE? Answer: The UAE offers significant tax advantages, including 0% tax on income up to AED 375,000 in the mainland and 0% corporate tax on qualifying income in free zones. Free zones also often provide exemptions from customs duties and VAT advantages, making them an attractive option for import-export businesses. 2. What are the steps to set up an import-export company in the UAE? Answer: 1. Choose business location: Decide between mainland and free zones. 2. Get a trade licence: Obtain the appropriate trade licence from the Department of Economic Development (DED) for the mainland or the relevant Free Zone Authority (FZA) for free zones. 3. Decide company legal structure and trade name: Choose a legal structure (FZ LLC, FZE, FZ Co.) and register the trade name following UAE guidelines. 4. Understand customs compliances and seek necessary approvals: Familiarise yourself with customs regulations and obtain the required authorisations. 5. Pay the fee and get approvals: Submit documentation, pay the fee and receive the necessary approvals to commence operations. 3. What are the differences between setting up an import-export business in the mainland and a free zone? Answer: Setting up in the mainland allows businesses to trade anywhere in the UAE and offers various licence types but may require a local sponsor and does not always provide 100% ownership. Free zones offer 100% business ownership, tax exemptions and special regulations but restrict direct trade with the mainland. 4. How can RAKEZ assist in setting up an import-export business in the UAE? Answer: RAKEZ provides a comprehensive suite of customisable services to help set up an import-export business, including assistance with selecting the legal entity, obtaining the appropriate licences and securing facilities like office space and warehouses. Their Business Development professionals also aid in application submissions and documentation, ensuring a smooth and quick set-up process.
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