How to Start a Logistics Company in JAFZA
The world’s economy relies on a complex network of logistics companies and infrastructure to transport goods and products to billions of people around the globe. Over 90% of all traded goods are transported across maritime shipping lanes. For companies that operate in this logistics industry, it's advantageous to select a location that provides easy access to a major shipping port.
Located at the crossroads of Asia, Africa, and Europe, the UAE is the perfect option for companies who need a centralised shipping hub. Currently, the UAE has a freight and logistics market valued at nearly USD 17 billion. This is expected to exceed USD 30 billion by the year 2026. Whether you are looking to start a new logistics company or relocate an existing firm, it’s important to better understand if the UAE is the right place for your business.
Benefits of Operating a Company in JAFZA
Established in 1985, the Jebel Ali Free Zone (often referred to as JAFZA) is the oldest freezone in the UAE. At the time, the UAE’s economy was limited to very few sectors beyond the oil industry. JAFZA created the opportunity for the nation to diversify its economy and attract foreign investment and businesses.
Today, JAFZA is the world’s largest freezone, occupying an area of 3.85 million square meters, and comprising a variety of facility types including warehouses, manufacturing facilities, and office spaces. Over 8,700 businesses operate within JAFZA supporting approximately 135,000 jobs.
The key feature of JAFZA is its proximity to the Port of Jebel Ali. The Port of Jebel Ali is the 9th busiest port in the world and largest in the Middle East. Completed in 1979, the port covers a total area of 134 square kilometres and contains 67 berths. Its globally central location provides direct access to a market of over 1.5 billion people across the Middle East, Asia, and Africa. For this reason, JAFZA is a preferred location for over 400 businesses that operate within the UAE’s logistics and supply chain industry.
Companies that chose JAFZA as their base of operations can also enjoy the other significant financial incentives of operating within a UAE freezone including world-class infrastructure, 100% foreign ownership, 0% corporate tax, and exemption from import duties.
Types of Businesses Activities Permitted in JAFZA
While there are a wide range of companies that can operate within JAFZA, they must fall into one of the following five categories – Trading, Service, Industrial, Logistics, or E-commerce. Each company must hold the appropriate trade licences for their business activities.
- Trade Licence - Trading is the most common business activity in JAFZA. This licence allows companies to buy and sell products from the freezone.
- Service Licence - Service-based businesses include those that perform services or share knowledge such as consulting, administrative, and training activities.
- Industrial Licence - Companies that want to perform manufacturing including purchasing raw materials, importing goods for the production process, and final assembly will need an industrial licence.
- Logistics Licence - This licence covers logistic-based activities including storage, transportation, distribution, freight forwarding, and inventory management.
- E-Commerce Licence - Companies that buy, sell, and trade products in non-physical locations can apply for an e-commerce licence. It’s important to note that this licence requires special approval from the Telecommunications & Digital Government Regulatory Authority (TDRA).
How to Register a Company in JAFZA
The process and complexity of registering a JAFZA company will vary depending on the size of the organisation and type of business activities. Setting up a simple import-export business can be completed in a few weeks, but a large logistics and manufacturing firm may require several months.
Business Registration Process
- Step 1: Submit Initial Application – The first step is to complete and submit an application to JAFZA.
- Step 2: Select Your Company Type – There are five different options for incorporating your business – FZE (Free Zone Establishment) for single shareholder companies, FZCO (Free Zone Company) for multiple shareholder companies, PLC (Public Listed Company), branch of an existing company, or offshore company (that operates outside of the jurisdiction of JAFZA).
- Step 3: Provide Required Documentation – During the setup process, companies will be required to provide the following documents:
- Copies of passports for all shareholders
- Copies of visas for all shareholders
- Proof of trade name reservation
- Proof of initial activity approval (from any applicable government agencies)
- Legal agreement of a physical address in the UAE
- Proof of payment for the trade licence
- Step 4: Apply for Trade Licence – Once the company is registered with JAFZA, you will need to apply for the appropriate trade licence and select what business activities you intend to perform (companies can select up to 12 different activities depending on the licence).
- Step 5: Pay Fees – Registering a company with JAFZA will cost AED 10,000. In addition, trade licences will cost between AED 5,000 and AED 15,000. These fees do not include the cost of leasing physical space or visas.
Accessing the Power of the UAE’s Logistics Network
Building a shipping, freight, or logistics company in Dubai has many advantages. There are few places in the world that offer companies this level of access to sophisticated and comprehensive logistics networks. However, the incorporation process for a logistics company can be very complex with different required approvals depending on the type of logistics operations.
To eliminate any challenges, companies should consider hiring an expert who is familiar with the process of registering companies in JAFZA. These professionals have the connections and knowledge to navigate the registration process and identify any potential roadblocks along the way.
How can PRO Partner Group help?
PRO Partner Group has in-depth knowledge of the UAE market and close connections with government departments and freezone authorities. We can streamline the company incorporation process, managing all aspects from licensing to visa, labour and immigration approvals.
If you need assistance with setting up a logistics company in JAFZA or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please 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.