Having moved up to the 21st rank in the World Bank’s ‘Ease of Doing Business’ report, UAE represents a vibrant economy of diverse sectors and caters to a global market of 3 billion consumers. With its strategic location and world-class infrastructure, liberal business laws and visionary leadership, UAE provides the right platform for trading company formation.
What is a Trading Company?
A trading company is a business that supplies or distributes different kinds of products to consumers, businesses or the government. Most trading companies are classified into 2 major categories, the importers and wholesalers that purchase a specialized range of products either to stock them, trade them or supply them.
Jebel Ali port located in Dubai is the world’s 9 busiest container port and one of the largest artificial harbours ever made. Such superior port facilities along with a world-class airline network which connects UAE to all major business centers around the world have made this country a global hub for trade over the last 2 decades. Its competitive business sector is supported by supportive government policies and advanced infrastructure, which makes UAE an ideal location for startups, SMEs and Large Enterprises to setup trading companies.
Types of Trading Companies
There are two major types of trading companies in UAE, general trading and specific trading companies, that can be setup in any of the freezones in UAE or on the mainland (for a Limited Liability trading company setup) across any of the 7 emirates of UAE.
While free zones are more suitable for international trade, mainland setup allows the investor to trade within the local market without restriction. A general trading license allows the business owner to trade in most household goods across the UAE market except Cryptocurrency trading, Oil & Gas, precious metals trading which requires a specific trading license and special approvals from UAE authorities. A Specific Trading license in UAE offers the option to choose one product and business line to operate in such as mobile phone trading, perfumes and cosmetics trading, ready-made garments trading, electronic appliances trading etc.
3 Simple Steps to Starting a Trading Company in UAE
- Planning
Any business in its pre-incorporation stage requires thorough planning to implement and execute tasks efficiently.
As a trading business, everything from investment, licensing, products, office space, employee strength, competition, and logistical support is taken into balance before a zone is selected. Since many zones offer specialized incentives for specific activities, the investor’s business preferences matter significantly.
The planning phase will eliminate any procedural errors that investors often face when setting up a store such as a wholesale outlet, international franchise, or even a small branded a shop in the UAE.
- Using Professional Help
Another major advantage the UAE allows its investors is the abundance of experienced and verified business setup consultancy agencies in Dubai. Many important aspects determine the ultimate success of a trading venture in UAE and require professional help. This involves selecting the right jurisdiction, the suitable license, legal structure, office space provisions, human resource management, PRO support, incorporation timeline, added facilities and privileges that good business setup agencies offer through their packages.
- Company Structure
The right business vehicle defines the operational parameters and its access to different markets. A free zone company setup is largely designed to cater trading structures with 100% ownership with pre-installed facilities such warehouses and storage depots. For international traders, a general trading license is ideal as it allows import and export of almost all types of products. Traders who seek to distribute in the local market through wholesale market outlets, shops, and local stores can opt for a Local Service Agent (LSA) or opt for a mainland (LLC) business license for their trading setup.
Advantages of Starting a Trading Company in Dubai
Low Barriers to Entry
Since the upfront costs are minimal, short incorporation timeline, setup privileges and a large variety of business consultancy agencies to seek help from, opening a trading company in Dubai gives a soundly generous appeal to investors from all around the world. Mainland trading license holders in Dubai are also exempted from any paid-up share capital or yearly audits, bringing affordability and privacy also to the table.
Instant Dubai LLC license available
UAE’s taste for adopting the latest technologies available in the world is well known. Even to the extent of creating a dedicated Ministry for overseeing UAE’ efforts in systematically integrating artificial intelligence in various parts of the government. To further encourage investors, the government of Dubai has launched instant license service with the aim to facilitate entrepreneurs in the issuance of their respective trade licenses within 24 hours. The facility will help kick-start business licensing procedures without the need to register for a trade name, legal contract or other intermediate steps when setting up a trading company in UAE.
E-trading in UAE
Another important initiative taken by the Business Registration & Licensing sector of Dubai Economic Department to regulate the trading of goods on social media, was to introduce an e-trader license in 2017. This license allows UAE & GCC nationals who are UAE residents to do business officially on social media in UAE. This license is issued to a single owner as an e-Trader who can sell goods on Social Media sites and cannot own a physical office or issue visas under this license.
How can IBG Help?
IBG analyses the specific requirements of every client on a case by case basis, so our consultants can design customized strategy that serves the best interests of the investor. This includes Renaissance Royale Middle East LLC, which was setup as a subsidiary of a UK firm by the experts at IBG Consulting such as Senior Consultant Erano Sybico and Harsha Jashnani who manages the Operations team. This firm was setup by IBG as a Specific Trading company which deals in the wholesale of household goods. When our esteemed client Mr. Moudar Al Shara approached IBG to setup this firm in Dubai as a subsidiary of his Sole Proprietorship in UK, there were certain operational complications that cropped up and were expertly handled by the IBG team and the company setup in Sharjah Media City was turned around swiftly.
With over 300 business incorporations successfully served, IBG focuses on providing investors with reliable, affordable and long-lasting company setup solutions for mainland LLC and free zone trading structures. To learn more about setting up your own trading company in UAE, contact us now or visit our website ibgme.ae
