General trading company setup uncovered
Do you want to run a general trading company in Dubai? It’s indeed a beneficial investment as many sectors of Dubai have witnessed remarkable growth. This business idea worth all the investment but you need to implement it perfectly. To make the process of trading company formation simple and easy for you, Prospr is going to unlock a comprehensive guide for you.
Let’s find out more:
What to do before starting a new general trading company in Dubai?
Here are three crucial things to follow must:
Market research is a must
Before we start explaining how to set up a trading company in Dubai, it is vital to perform some market research.
The purpose of this research is to identify most lucrative business opportunities. When we talk about trade sectors, Dubai has a good trading relationship with India and China. So, you can consider import and export from these countries.
If you need ease of trade, also consider other GCC countries as you don’t need a visa to go there, especially when you have a Golden visa Dubai. This city is also a member of the Greater Arab Free Trade Area (GAFTA). That means your trading company can enjoy tax incentives and other perks while working with GCC countries.
Learn how to set up a company in Meydan Free Zone?
Get familiar with local laws and regulation
Another thing you need to understand before opening a new company in Dubai is to understand local laws and regulations. You will obtain a general trading license from the Department of Economic development, it’s vital for you to familiarize yourself with DED requirements.
As you are going to run a trading business in the UAE , another important department you must know about is the Custom department.
Good news is that Dubai has created a conducive environment for company owners and investors. If you start a company in a freezone, you are exempt from import/export duties and taxes. The reason behind this exemption is to promote business and attract investors from around the globe.
Understand local consumer
You need to have a complete idea about your target audience before you start a company. Dubai locals and expat prefer to shop from a single-website, they are looking for a comprehensive and seamless shopping experience. So, if you want to tap on this market and plan to grow, you can start loyalty programs.
If you are a foreign investor, you can start your brand with foreign names as many international brands are making great buzz.
One thing that you don’t need to ignore while getting an understanding of Dubai customers is the expat population. Its diverse expat population comprises over 200 nationalities. So, you basically have to target a multifaceted market landscape. Another sector is luxury and lavish lifestyle. If you can offer products for this specific sector, you can expect trading business growth effortlessly.
Reasons to take an insight into consumer behavior in Dubai is to determine product offers, set the right price, and pick the best marketing strategies.
As a foreigner, it won’t be an easy thing for you to understand local laws, market, and consumer. But guess what! Prospr is here to help you. We will conduct market research and help you choose the best business opportunities while you can have an insight through our detailed feasibility report.
How to start general trading company in Dubai
Here are some steps you need to do for general trading company formation Dubai:
Step 1- Choose business model
Once you know about market, consumer, and local laws, it becomes easy for you to choose the right business model. So, the first step would be to create a business plan that will highlight:
- Marketing strategies
- investors/shareholders
- Finance
- Office space requirements
- Numbers of employees
- products/activities
- Market condition
- Competitors
Step 2-Choose between Mainland and Freezone
Now the next step is to pick a specific jurisdiction for starting a business in Dubai. You need to make a choice between Mainland and Freezone.
We want to ensure that you choose the right kind of jurisdiction for your business, thereby we have created a detailed guide that helps you understand the benefits of freezone and mainland companies. It will help you make the right choice.
Find a sponsor
If you plan to open a general trading company in Dubai Mainland, you need to find a local sponsor. Here is a complete guide regarding finding the best local sponsor for your business in Dubai.
Step 3-Apply for General trading license Dubai
If you want to conduct your business legally in Dubai, then you need to get a generally trading license in Dubai. This license is a work permit that allows you to sell, purchase, distribute, import, export, and store products. General trading license activities are of diverse kinds such as cloth selling, retail wholesale of goods, accessories, electronics etc.
Read about: Benefits of setting up a company in Dubai
Here are some steps you need to follow for getting DED general trade license in Dubai
- Select a unique trade name for your general trading company in the UAE.
- Specify your DED general trading license business activities
- Get initial business approval from DED
- Draft Memorandum of Association and each partner must sign this document
- Choose your business location and then lease it. Attest lease document by Ejari
- Submit your application after paying the general trade license Dubai price.
If you have decided to start a general trading license in freezone or offshore, then you need to submit original documents to the Commercial registry at the government department. DED will issue a trade license after your license is approved by the commercial registration department.
Step 4-Company registration
Once your company name is approved and your legal structure is chosen you need to register your company. You will fill out an application form for company registration while providing required documents such as NOC from current visa sponsors, passport copies and photographs. Many free zones offer online registration to make the whole process simple and easy.
Also read how to change or remove a local sponsor in Dubai?
Step 5- Setting up your business operation
As you have got your trade license and registered your general trading company in Dubai, the next step is to set up your operation. If you have an office, you need to set it all up after the lease is final. In case you are picking a warehouse you need to select it based on your storage requirements, parking availability, operation expenses, security measures, and strategic location.
You also need to familiarize yourself with import/export regulations. You need different documentation for trading in Mainland and freezone. If you plan to import, then you need a delivery order from the shopping agent and furnish some document such as certificate of origin, packing list, import permits and a commercial invoice.
Step 6-Manage finances and compliance
It requires you to open a corporate bank account to handle financial transactions. You need to provide copies of emirate id, passport, contact information and trade license for opening an account.
Now the next step is to register for corporate tax and here is a detailed guide to help you in this regard. You will pay 9 percent corporate tax when your taxable income exceeds AED 375,000. And if income is below this limit, you won’t pay any tax.
You need to register for VAT through the FTA’s online portal. However, this register is mandatory when your annual turnover is above AED 375,000.You will provide trade license alongside proof of business transaction during VAT registration.
It is mandatory for general trading companies to run a regulator audit. If you have a Mainland trading company, you need to audit your financial statement and keep them for at least five years as per the Commercial Companies Federal Law No. 32 of 2021.
As far as free zone companies are concerned, not all free zones require an audit. However, FZCOs and FZEs must have to perform regular audits. Precise accounting and periodic audit are essential with the introduction of corporate tax. It’s vital to perform audits as they offer insight to financial performance of a company and help companies maintain compliance with the UAE’s tax regulations.
General Trade license in Dubai cost
You need to spend AED 15000 to AED 50000 or even more as a cost of trade license in Dubai. Many factors will affect overall cost of your trading license UAE such as:
- Visa application
- Warehouse size
- Business size
- Business setup
- Additional approval
General trade license in Dubai Mainland is more expensive than a free zone.
Do you want to get the cheapest general trading license in the UAE? If yes then you need to partner with Prospr. Our business consultants will oversee all the transactions and ensure that you don’t incur any additional cost. As a result, you would be able to get a license at an affordable rate.
Read the benefits of mainland company formation in Dubai
General trading license requirements
Here is a list of documents you need to provide for getting this trading license in Dubai.
- Copies of passport of all the partners in your company
- Memorandum of Association and Local Service Agreement
- Trade name registration letter issued by the council
- Tenancy contract
- NOC letter
- Passport size photographs.
Once you submit all these documents, officials will check and verify your trade name at the commercial registry DED will forward all the documents to the Federal Ministry of Economy for its publication. An approval letter will be issued by the ministry after publication.
Conclusion
Finally, you know what steps you need to take for setting up a general trade company in Dubai. It will all start from good market research and continue with getting a general trading license and business registration.
Whether you ended help with obtaining a general trading license, market reason or any other legal formality, Propr is here to help. We have been helping hundreds of entrepreneurs in the successful company formation process. You have a lot of things to handle at the same time and it becomes overwhelming.
Depending on your trading business, you also have a lot of questions regarding the cost of general trading license and other aspects. No matter what question you have in mind, our business consultants have detailed answers ready for you. Book a consultation session and get answers to all your queries. Let Prospr make the process of general trading company formation simple and hassle-free for you.