How to set up a company to import goods into Dubai, Abu Dhabi and the wider UAE?
The economy of the UAE is the second largest in the Middle East. It has grown over the years from being largely reliant on oil exports to one that has taken full advantage of its strategic geographical position and diversified to now be recognised as a world hub of shipping, transportation and logistics.
Through the establishment of designated free trade zones, with distinct regulations from the rest of the mainland and free trade agreements which limit the tariffs on goods trade. It has created an environment which is very attractive for foreign investment.
This in addition to other notable benefits such as: zero percent corporate tax, minimal import/export duty, low company start-up and operational costs and 100% company ownership, make The UAE’s free zones beneficial places for an import-export business to set-up.
In this article we will detail the main considerations when importing and selling goods into the UAE or into one of the many UAE Freezones as well as the main shipping ports and airports. We detail the set-up requirements, the required documentation and discuss the taxes and costs associated with importing products into the UAE.
How do I obtain an Import Code for the UAE?
Once you have a valid Trade Licence, either in Dubai, Abu Dhabi, the wider UAE or one of the UAE Freezones, which permits you to import and export goods, you will then need to obtain a UAE Import Code. This is an ID issued by UAE authorities by UAE importers in order that the goods imported can clear UAE customs.
In order to obtain this code you will require:
- A valid UAE Company Trade Licence with the activity of ‘Importing’ on it
- A Passport Copy of the General Manager on the Licence
- A copy of the Emirates Resident Visa for the General Manager of the companyA copy of the Emirates ID card for the General Manager of the company
How do I import goods into the UAE?
There are three ways in which goods can be imported into the UAE: by air, sea or road. The decision on which option best suits your needs will depend on many factors: available budget, time constraints, storage needs, weight, dimensions and fragility of the goods should all be considered.
Main Ports and airports in the UAE
The main shipping ports of the UAE are:
- Jebel Ali,
- Mina Rashid,
- Mina Zayed,
- Mina Khalid
- Khor Fakkan
In addition, there are major airports located in:
- Abu Dhabi
These give import-export businesses easy access to worldwide markets and lots of options in terms of how to move freight around the country and internationally.
How do I ship products into the UAE?
Importing products into the UAE by Sea Freight
In order to import products into the UAE by sea freight, the exporter should provide the importer with the following four documents:
- Original bill of lading copies
- Commercial invoice
- Packing list
- Certificate of Origin
The importer should then submit the original bill of lading certificate to the shipping agent who issues a delivery order. The importer should also conduct all cargo clearance requirements and, in the case of Dubai, submit the Import Declaration application for UAE Customs clearance online through dubaitrade.ae.
Customs duties and other fees can be paid online using the CDR (Customs Duty Credit) account or by credit/debit card. Once this has been done, the importer can print the Customs Import Declaration. UAE Customs will then verify the information provided and may inspect the cargo before its release. At this time, the importer can then arrange for a freight forwarding company to take delivery of the cargo at the port.
Importing products into the UAE by Air Freight
Importing by air represents a more time efficient way to bring goods into the UAE. Most air shipments reach their destination in less than 48 hours. Using air freight also lowers the need for physical handling of goods and, therefore reduces the risk of damage to the consignment. However, it can be more expensive and impractical for consignments that are either very heavy and/or have large dimensions.
In order for goods to be imported into the UAE by air freight, the importer will require the following documents:
- Original Air Waybill
- Commercial invoice
- Packing list
- Certificate of origin
Certain specific goods such as food and beverages, cosmetics, pharmaceuticals, wireless communication equipment and live animals are subject to further regulations and may require other permits and documentation in addition to the above.
Once goods have cleared customs, with all the required documentation and all payments have been made, the shipment can be forwarded to its final destination.
Importing products into the UAE by Road Haulage
In the UAE 5% of all exports are by road. Road haulage is necessary as a means to get goods from a factory to a port or airport even if sea or air freight is the chosen method of transporting the goods internationally. It is therefore relevant to all import-export processes.
Road haulage rates are generally lower than both air freight and sea freight costs and transit time can often be shorter, particularly if importing from a neighbouring country. Road haulage companies also tend to operate on a door-to-door basis and there is far less documentation required, which streamlines the importation process significantly. To import by road you will need:
- A customs-authorised bill of entry
- A commercial invoice
- A bill of lading (normally designed by the road haulier)
A 5% customs duty is levied upon entry into the UAE.
What taxes are applicable on imports into the UAE?
UAE Import tax
Import tax is a duty collected when either a private individual or business entity import goods into a country. The rate of import tax levied is usually dependent on the value, or type of goods being imported and the country of origin. In the UAE, the rate of import tax ranges from 0% to 5%, with an average of 4.61%. There are higher rates of tax applied to some products such as alcohol or tobacco.
The UAE import tax applies, only to goods whose value is greater than AED 1,000 and free-trade zones in the UAE are exempt from the tax. Meaning that if the business is operating from one of the free trade zones of the UAE, importing goods for onward sale, there is no import tax levied. Import tax is only levied if the goods are shipped into mainland UAE from the Freezone.
UAE Value-added Tax (VAT)
VAT was introduced in the UAE on 1 January 2018 at a rate of 5%. This applies to the majority of transactions, in goods and services. VAT is imposed by the UAE government on tax registered businesses at each step of the supply chain.
A business must register for VAT if its taxable supplies and imports exceed a threshold of AED 375,000. If a businesses’ taxable supplies and imports is greater than AED 187,500, then it can voluntarily register for VAT and if the value of imports is less than this, then it is not necessary to register.
UAE Excise tax
The excise tax was first introduced in the UAE in 2017. Its aim was to reduce the consumption of unhealthy and harmful products and raise the health awareness of its citizens. Excise tax is only levied on a small number of products that are considered harmful to human health or the environment, such as tobacco, electronic smoking devices or products with added sugar or sweeteners.
How can PRO Partner Group help with setting up and import goods into the UAE?
PRO Partner Group has extensive teams, experience and knowledge across Dubai, Abu Dhabi, the wider UAE, Oman and Qatar, providing professional assistance and guidance for international companies, entrepreneurs and investors on the best way to set up to import and sell products into the local market.
Our dedicated operations teams and PROs have strong relationships with local government authorities to ensure that the correct information is provided, and requirements are met in an effectively and timely manner. We can assist you in obtaining the correct Trade Licence for your import-export business in the UAE, as well as to obtain staff and family visas and help you with any documentation pertaining to import permits.
PRO Partner Group also provide a secure corporate Nominee Local Shareholder and Commercial Agency platform to allow foreign companies and investors to safely establish their businesses in the UAE, Qatar or Oman - we ensure that the foreign party has full management control of their products, business and full transparency with local on the ground support.
If you need assistance and advice on importing goods into the UAE and for further information on any other related company set up, local partner or PRO service matter in the UAE and wider Gulf do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.