Why Dubai is a lucrative potential market for import business

Dubai is endowed with a very favourable strategic geographic location, and functions as a key trading centre linking Africa, Middle East and East Asian business and logistic networks. The gradual shift from a reliance on oil and gas revenues to take greater advantage of shipping, transportation and logistics has raised the economy of the UAE to the second largest in the Middle East. The UAE Freezones have also developed attractive policies of zero corporate tax, full company ownership, and low import/export duties; creating an ideal climate for import-export businesses to thrive in Dubai, Abu Dhabi and the wider UAE.

Things to consider when starting an import business in Dubai

The main considerations for importing and selling goods into mainland UAE, Dubai and Abu Dhabi, as well as the various Freezones across the main shipping ports are as follows:

1. Company set up requirements – defining the activity
2. Choice of location and jurisdiction within the UAE – Dubai vs Abu Dhabi / Mainland vs Freezone
3. Location of end user / clients / purchaser – where are the clients based
4. Preparation of correct required documentation – foreign company documents and individual documents
5. Analysis of associated taxes – import tax, VAT, foreign country tax
6. Overview of all costs and fees – for set up and ongoing
7. Commercial space requirements – is a physical space required
8. Local UAE government department regulatory compliance – dependant on location and activity type

To ensure a time-efficient and cost effective set up of a trading and import / export business it is always advisable to seek professional help.

After acquiring a valid Trade Licence in the UAE, approved at the DED, it is mandatory to obtain a UAE Import Code for customs clearance. An Import Code will also require passport copies and IDs / or the detailed corporate documents of shareholders and managers as well as detailed application forms and submissions. With approvals from the UAE customs authority.

Once the import code is obtained the next step for a UAE-based company is to obtain a delivery order from the shipping agent and submit the standard trade documentation. The standard trade documentation includes:

1. A commercial invoice from the exporting company addressed to the importer with details about quantity, goods description, and the total value of each imported item.
2. Certificate of Origin - stating the country of origin and approved by the Chamber of Commerce in the country of origin, then notarised, legalised and attested for use in the UAE.
3. Detailed packing list including weight, method of packing, and HS code for each item.
4. Import permit from the relevant UAE regulatory agencies - in the case of importing restricted goods or duty exempted goods.
5. Bill of entry or airway bill.

Additional documents required to import food products into the UAE include:

1. Original health certificate issued by the appropriate government agency in the exporting country, attesting to the product’s fitness for human consumption.
2. Original Halal slaughter certificate for meat and poultry products.

These documents need to be notarised, legalised and attested via a three-step process:

1. Notarised in the country of origin, true copy and Ministry of Foreign Affairs (MOFA) attested.
2. Verification by the UAE Embassy exclusive verification agent in country.
3. Submission of the verified paperwork to the UAE Embassy and the respective Consulate covering the state in which the company is based.

PRO Partner Group has a network of attestation agents in various countries and can assist with the processing of foreign documents. PRO Partner Group can also assist once the documents arrive in the UAE to obtain MOFA stamping, and legal translation here.

Additionally, there are several restrictions on certain products in the form of a ban or special permit. Banned products include:

• Counterfeit currencies.
• Gambling tools, machinery and gambling devices of all kinds.
• Items that contradict Islamic faith and public morals.
• Pirated content material.

Special permission is required for imports such as:

• Pharmaceutical products and medical/surgical instruments and machines.
• Weapons and Military Equipment.
• Print materials, publications and media products.
• Alcoholic beverages.

Awareness of regulatory requirements and ensuring the availability of all the aforementioned documents with a timely legalisation process can be task intensive. PRO Partner Group will fully liaise with the respective authorities to ensure a swift and seamless set up for the import and trading licence.

Our team of company formation and legal experts will walk you through all aspects of the company formation process, including; licensing elements and any regulatory approvals for the company as well as residency and visa requirements for staff and family members and the import permits for the various products.

How to import goods into the UAE

The main routes for importing goods into the UAE are air, sea and road. The choice among these three methods depends on budget, time constraints, weight, dimensions, storage needs and fragility considerations.

Located in Jebel Ali, Mina Rashid and Mina Zayed. Each of the three import routes has a number of advantages and disadvantages.

Air Freight

Air shipping is considered the most time-efficient method for importing goods into the UAE. It has the least risk of damage due to minimum physical handling. However, the cost of air freight increases significantly for heavy and/or larger dimension imports.

Road Haulage

Road haulage is relevant to all import/export processes since product delivery to and from ports or airports requires road commutation. It is the most cost-effective of the three methods and shorter transit time when importing from neighbouring countries. Also, it requires less documentation which can expedite the process significantly. Customs duty of 5% is imposed on imports entering the UAE.

Sea Freight

Sea freight has the advantage of moving large products over large distances cost-effectively. Shipment options include Full Container Load (FCL), Less than Container Load (LCL), Roll on Roll off (RORO) and dry bulk shipping.

Shipping has the longest transit time and is not cost-effective for smaller products. After obtaining a Customs Import Declaration, UAE Customs will verify the supplied information and may inspect the cargo before release.

At PRO Partner Group we work with a number of procurement and logistics business providers in the UAE and can provide introductions to these service providers to allow you to connect your UAE import and trading licence with the rest of the world.

UAE Import Tax System

There are three kinds of taxes levied upon imported products into the UAE: customs duty, value-added tax, and excise tax.

Import Duties

The UAE has relatively low import tariff rates ranging from 0% to 5% set by the GCC Customs Union harmonisation policy. However, high tariffs are levied on special products such as 50% on liquor and 100% on tobacco.

Value Added Tax

First enacted in 2018, VAT is imposed on imported goods supplied by final buyers and collected by business owners on behalf of the government. The current VAT rate is 5%. Registration for VAT is mandatory for businesses with annual taxable supplies and imports higher than AED 375,000, optional between AED 187,000 and AED 375,000 and not required for lower turnover than this.

Excise Tax

In order to promote health and environmental awareness among citizens, Excise Tax was introduced in 2017 to reduce consumption of unhealthy and harmful commodities that pose harm to human health or the environment.

UAE Product Regulations

Products manufactured, imported and sold in the UAE are subjected to a number of regulations established by the Emirates Authority for Standardization and Metrology (ESMA). Businesses are responsible for determining that any goods they manufacture or import meet the standards of safety set by UAE regulations under all normal or reasonably foreseeable use conditions, and comply with all applicable ESMA standards and other technical regulations.

Among these regulations are the:

1. Product Safety Law
2. UAE Regulation for Restriction of Hazardous Substances (RoHS)
3. UAE Regulation for Low Voltage Equipment (LVE)
4. UAE Scheme for Control on Food Contact Materials (FCM)

Additionally, all products are subject to labelling requirements set by the GCC Standardization Organization. In general, the labelling information should include:

1. Country of origin
2. Product brand and name
3. Lot number
4. Manufacturer name
5. Storage and use instruction
6. Manufacturer address
7. Production and expiry dates

Setting up an import-export and trading business in Abu Dhabi, Dubai or the wider UAE requires specific knowledge of UAE importing requirements, guidelines and regulations. PRO Partner Group can provide professional assistance and guidance for business owners to import and sell their products in the UAE Mainland or one of its Free Zones. Our team of expert advisors can help you select the correct Free Zone or Mainland jurisdiction for your company as well as assist with other elements of the setup process such as Investor Visas, staff and family Visas, PRO services and HR, Payroll and Company Secretarial Services. Please 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 info@propartnergroup.com or complete the contact form below and we will be delighted to assist you.