The United Arab Emirates is a global powerhouse when it comes to trade. Despite having a population of just under 10 million, it comes 16th in global export rankings and 17th in global import rankings out of 127 jurisdictions, according to Michigan State University’s globalEDGE website.
Many trading companies choose to base themselves in Dubai to avail of the emirate’s fantastic infrastructure and support for the trading and logistics sector. If you would like to start a trading company in Dubai, it is likely that you will need a general trading license. In this blog we cover the key things you need to know about getting a general trading license:
- What does general trading mean?
- What is a general trading license?
- Why start a general trading company in Dubai?
- Steps to start a general trading company in Dubai
- Documents needed to open a general trading company in Dubai
- Benefits of a general trading company in Dubai
- General trading license cost
- Why choose Meydan Free Zone?
- FAQs
What Does General Trading Mean?
In the United Arab Emirates, ‘general trading’ refers to the import, export, and trade of a wide range of goods and products. It covers the trade of most kinds of physical goods, including things like furniture, electronics, clothes, toys, and many kinds of industrial and manufacturing equipment too. Although most kinds of physical products are covered by general trading, certain products are restricted and you will need a specific license to import or export them. This includes products such as cars, alcohol, medical products, or weaponry.
What Is a General Trading License?
Somewhat confusingly, a ‘general trading license’ is different from a ‘trading license’.
A trading license allows you to trade a single product category within an industry. If you want to trade in multiple products across different industries, then you’ll need a general trading license.
Why Start a General Trading Company in Dubai?
Starting a general trading company in Dubai provide you with a wealth of benefits, such as:
- Centre of global trade: Thanks to its geographical position, Dubai is at the centre of the global map for world trade, which means you will have many opportunities to make your business a success.
- No taxes: If you set up your general trading company with Meydan Free Zone, you will avail of a 0% income tax, 0% VAT, and we also permit 100% foreign ownership.
- Trading infrastructure: Thanks to its long-established position as a global trading hub, Dubai has world class infrastructure for your company, including warehouses, logistics businesses, excellent seaports and airports, not to mention a smooth customs process.
- Business networks and support services: There are many businesses in the UAE which can provide support services for your trading company, offering things like logistics, warehousing, legal, marketing, finance and much more.
- Business friendly and high demand: The Dubai government is business friendly and has fostered an environment that makes general trading smooth and transparent. The country’s population is also wealthy and the UAE has a booming economy, which means you can be confident the products you import will find a market.
Steps to Start a General Trading Company in Dubai
If you choose to start your general trading company at Meydan Free Zone, we can walk you through our simple three step process to starting your business:
- Step 1: Submit your application with completed KYC
- Step 2: Get security and government approvals
- Step 3: License issuance
If you have any questions about getting your general trading license, we can provide you with more details on request.
Documents Needed To Open a General Trading Company in Dubai
To open a general trading company in Dubai, you will need to compile several documents.
If you would like to form a company with individual shareholders, you will need to provide:
- Passport copy
- Passport size photo
- Residence visa copy
- Emirates ID copy
If you would like to form a trading company with corporate shareholders, you will need the following documents:
- Certificate of incorporation
- Certificate of incumbency or equivalent
- Memorandum of association
- Board resolution
Benefits of a General Trading Company in Dubai
Starting a general trading company in Dubai will leave you open to a host of benefits and opportunities, some of which are listed below.
01. Local and international trade
Traders who obtain a general trading license can import or manufacture all the goods listed in the license. The merchants then have the option of either distributing these goods in Dubai’s local market or exporting (manufactured goods) or re-exporting (imported goods) them to a profitable country.
02. Tax free
There are heavy taxes imposed on the import, manufacture, and sale of various products in most countries. The fact that it is almost tax-free in the UAE is one of the best incentives. The same is true for the trade of various goods under a general trade license Dubai. It is possible to manufacture these products at the lowest possible cost.
03. Large number of products
With the exception of a few restricted products or sensitive materials, almost all products are allowed in Dubai under a general trading license. Several products can be traded under one license, and in exchange for the initial high fees, you will receive ongoing benefits for several years to come from this license.
04. Simple process
General trading licenses in Dubai are both profitable and easy to acquire. You can get your trading license from DED after submitting required documents in just 1 week as opposed to several other long registration processes. As soon as that is done, you are free to start your business.
05. Easy sponsor to dependents
This trading license also offers investors the advantage of making it easier for their employees and dependents to apply for visas. By sponsoring their dependents, these traders are able to obtain UAE visas more easily.
General Trading License Cost
At Meydan Free Zone, we can provide general trading licenses from as little as AED 12,500 for businesses which do not need a visa allocation. If your company does need a visa allocation, the cost of a general trading license goes up to AED 14,350 with additional visas costing extra.
Why Choose Meydan Free Zone?
At Meydan Free Zone, we can support you with all aspects of business setup in Dubai when you are applying for your general trading license. Choosing Meydan Free Zone to start your general trading company brings you plenty of benefits. You will be physically located close to the airport and seaport, can avail of high specification offices that are open 24 hours per day 7 days per week, as well as experience quick and easy incorporation and numerous additional member benefits.
Contact Meydan Free Zone Today And Start Making Money
Frequently Asked Questions
Here are some common FAQs about applying for a general trading license in Dubai.
Do I have to pay VAT or import-export tax with a Meydan general trading license?
No VAT or customs duty applies if goods enter a UAE port and are re-exported. However, if the goods are moved to the mainland, 5% VAT and 5% customs duty are applied. Carbonated, and sweetened beverages products have a 50% duty, and energy drinks, e-smoking devices and tobacco products are assessed a 100% customs duty.
Can you import/re-export with a general trading license?
Yes, importing and re-exporting is permitted with a general trading license.
Can I sell on the mainland using my free zone general trading license?
No. Instead, Meydan Free Zone general trading companies have to establish a partnership with a local distributor who holds a mainland license and will handle all aspects of delivery and fulfilment with companies on the Dubai mainland.
Can I rent a warehouse with a Meydan Free Zone license?
No, you cannot rent a warehouse with a Meydan Free Zone license. Instead, business owners must work with a local distributor to store goods in their warehouse. We are able to advise you on how to find a local distributor. To know more on renting a warehouse, click here.
How much is a general trading license in Dubai?
Meydan Free Zone offers general trading licences at a cost ranging from AED 12,500 to AED 14,350.
How does the logistics work (warehouse, distribution, transport) if you have a free zone license?
With a Meydan Free Zone license, business owners must work with a local distributor to store, transport and deliver the product to the end customers in the UAE.
Can goods enter any port in the UAE? What is the process to move goods from a port to the mainland?
Yes, if you are based in a free zone then the goods you import can arrive at any UAE port. To move goods from the ports to the mainland as well as into and out of the free zone you will need different kinds of documents including:
- Bill of lading or the custom bill
- The supplier invoice
- Packing lists or delivery notes
- Bill of entry to the free zone
- Bill of exit when exporting from a free zone to the UAE mainland or outside the country
We can advise you on all the specific paperwork you will need at different stages of the import and export process.
Can you sell online with a general trading license like on Amazon, noon etc?
Yes, you can – so long as you have a partnership with a local logistics company.
