Dubai’s ever-improving connectivity with major global commercial hubs makes many entrepreneurs want to start a logistics company in Dubai. Dubai is one of the busiest sea-air multimodal transport hubs globally, thanks to the cost-effective transport and lower freight costs. The city has been investing tens of billions in expanding its shipping and airlines with over 400 cities worldwide. Consequently, the logistics sector in the UAE has seen huge growth.
Moreover, with the advent of many companies in the UAE, there is a large prospective client market for your logistics company in Dubai. Anyone who wants to move goods from point A to point B is on your roster. So, this blog talks about how to start a logistics business in Dubai.
Benefits of Starting a Logistics business in Dubai
The UAE’s reputation as a foreign business-friendly country, coupled with a thriving innovation culture, makes Dubai one of the best locations to start a logistics company. Here are some key benefits:
1. Minimal Paperwork and Efficient Processes
Thanks to advanced technology and supportive government administration, starting a logistics company in Dubai involves minimal paperwork, streamlining the setup process.
2. State-of-the-Art Infrastructure
Dubai boasts cutting-edge infrastructure that attracts numerous Indian entrepreneurs. The city features an excellent public transportation system and top-notch telecommunication facilities, enhancing operational efficiency.
3. Strategic Geographic Location
Dubai’s strategic position connects the East, West, North, and South, linking manufacturers, producers, and suppliers worldwide. The city's well-placed airports and seaports ensure great connectivity, promoting logistics growth.
4. Supportive Government Initiatives
The UAE government continually implements initiatives to benefit foreign businesses. The recently launched ‘Dubai Global’ project aims to provide logistical support for companies looking to expand into over 30 global markets.
5. Skilled Workforce
Dubai’s talent pool is renowned for its business skills, specializing in management and operations. This ensures access to a highly skilled workforce for your logistics company.
6. Tax Exemptions
Foreign businesses in Dubai are generally exempt from income, business, and personal taxes. However, some companies may need to pay a 5% VAT on specific business activities.
7. 100% Ownership in Free Zones
Dubai offers numerous free zones that allow you to maintain 100% ownership of your logistics business, providing greater control and flexibility.
8. No Capital and Profit Taxes
Logistics companies operating in Dubai’s mainland and free zones are not required to pay taxes on capital invested or profits earned, maximizing your profitability.
9. Easy Visa Process
Once you have the necessary documents, obtaining a visa in Dubai is straightforward. The new visa regulations also make the job market more adaptable for foreign nationals.
By leveraging these benefits, starting a logistics company in Dubai can lead to significant growth and success in the thriving market.Documents Required to Start a Logistics Business in Dubai
You must have all the required documents before you set up a logistics company in Dubai. This smoothens the business setup process. Some of the documents are as follows:
- Passport copies of all shareholders
- Visa copies of shareholders (visit or residence visa)
- Passport copy and CV of the company’s manager
- Proof of trade name reservation
- Initial activity approval from the relevant authority
- Legal agreement for a physical office or warehouse address in the UAE
- Proof of payment for the trade license
The documents vary as per business activities, company structure, and location. The professionals at the Shuraa Business Setup can provide you with a comprehensive list of the required documents based on your logistics business activities.
How to Start a Logistics Company in Dubai?
You must go through some steps to start a logistics company in Dubai. The steps given below will help you understand it better:
Step 1: Define Your Business Activities
Before starting, identify the specific logistics services you’ll offer. These could include freight forwarding, warehousing, cargo transportation, customs brokerage, or third-party logistics (3PL). Clarity on your niche ensures you apply for the correct licenses and approvals.
- Freight Forwarding: Arranging transport and documentation for goods.
- Warehousing: Storage, inventory management, and order fulfillment.
- Cargo Transportation: Sea, air, or land transport of goods.
- Customs Brokerage: Handling customs clearance and compliance.
- 3PL Services: Comprehensive supply chain management for clients.
Shuraa India can help you align your business activities with the Department of Economic Development (DED) or free zone authority requirements.
Step 2: Choose a Business Jurisdiction
Dubai offers two primary jurisdictions for setting up a logistics company: mainland or free zone. Each has distinct benefits, and your choice depends on your business goals and target market.
Mainland
Mainland companies can trade freely within the UAE and globally without restrictions. They’re ideal if you plan to serve local clients or government entities. However, additional costs like office rent and visas may apply.
Free Zones
Free zones like Jebel Ali Free Zone (JAFZA), IFZA, RAKEZ, Ajman, or Dubai Airport Free Zone (DAFZA) cater specifically to logistics businesses. They offer tax exemptions, 100% ownership, and proximity to ports and airports. However, trading outside the free zone may require a local distributor.
Shuraa India’s consultants can guide you in selecting the best jurisdiction based on your operational needs and budget.
Step 3: Select a Company Name
Your company name must comply with UAE naming regulations. Avoid offensive terms, famous brand names, or abbreviations of your personal name. Ensure the name reflects your logistics activities, like “Global Freight Solutions” or “Dubai Cargo Connect.”
- Check name availability with the DED or free zone authority.
- Register the name to secure it legally.
Shuraa India ensures your chosen name meets all compliance standards, preventing delays in the setup process.
Step 4: Choose a Legal Structure
The legal structure defines your business’s liability and ownership. Common options for a logistics company include:
- Sole Proprietorship: Single owner, full control, but personal liability for debts.
- Limited Liability Company (LLC): Separate legal entity, limited liability, suitable for multiple shareholders.
- Branch Office: For foreign companies expanding into Dubai, subject to parent company regulations.
An LLC is often preferred for its flexibility and protection. Shuraa India can advise on the best structure for your logistics venture.
Step 5: Apply for a Logistics License
A logistics license is mandatory to operate legally in Dubai. The logistics license cost in Dubai varies based on jurisdiction and business activities. For mainland businesses, the cost starts at AED 18,000, while free zone licenses begin at AED 11,900 for zero-visa quotas.
Required Documents
- Completed license application form
- Passport copies of shareholders
- Emirates ID (for residents)
- Business plan outlining objectives
- No Objection Certificate (NOC) from current sponsor, if applicable
Special Approvals
Logistics businesses may need approvals from:
- Federal Transport Authority (FTA): For transportation services.
- Dubai Customs: For import/export activities.
- Roads and Transport Authority (RTA): For vehicle permits.
Shuraa India streamlines the licensing process, handling documentation and approvals to save you time.
Step 6: Secure Office and Warehouse Space
Logistics companies require physical space for offices and vehicle fleets. Mainland businesses need a leased office, while free zones offer flexi-desks or warehouses. Consider the number of vehicles, storage needs, and budget when choosing a location.
- Mainland: Flexible office leasing options in business districts.
- Free Zones: Warehouses in JAFZA or Dubai South, close to ports and airports.
Shuraa India assists in finding cost-effective office and warehouse spaces tailored to your operational needs.
Step 7: Open a Corporate Bank Account
A corporate bank account is essential for financial transactions. Choose a bank that offers logistics-friendly services, such as trade finance or fleet management solutions. Required documents include:
- Trade license copy
- Passport copies of shareholders
- Memorandum of Association (MoA)
- Tenancy contract for office space
Shuraa India connects you with reputable banks to ensure a smooth account setup.
Step 8: Register with Customs and Obtain Permits
If your logistics business involves import/export, register with Dubai Customs for clearance permits. Additional permits may be needed for specific activities, such as hazardous goods transport. Shuraa India ensures compliance with all regulatory requirements.
Step 9: Hire Staff and Secure Visas
Depending on your business scale, you’ll need drivers, warehouse staff, and administrative personnel. The number of visas depends on your license and office size. Shuraa India handles visa processing for investors and employees, ensuring compliance with UAE labor laws.
Step 10: Comply with UAE Regulations
Adhere to trade, tax, and safety regulations to avoid penalties. Register for VAT if your annual turnover exceeds AED 375,000. Shuraa India provides PRO services to manage renewals, compliance, and government interactions.
What Is the Cost of Starting a Logistics Company in Dubai?
The Cost of starting a Logistics Company in Dubai ranges between AED 18,000 and AED 50,000, depending on the type of license you require, the number of visas, the number of vehicles for operations, and driver training costs.
Below is a breakdown of key expenses:
|
Expense Category |
Mainland (AED) |
Free Zone (AED) |
|---|---|---|
|
Trade License Fee |
18,000+ | 11,900+ |
|
Office/Warehouse Rent |
20,000–100,000 | 10,000–50,000 |
|
Visa Fees (per visa) |
3,500–5,000 | 3,500–5,000 |
|
Customs Approvals |
2,000–5,000 | 2,000–5,000 |
|
Vehicle Permits |
1,000–3,000 | 1,000–3,000 |
|
Insurance and Bank Guarantee |
5,000–20,000 | 5,000–20,000 |
Professionals from Shuraa India can help you determine the exact cost based on your logistics business activities. They will also ensure that you do not spend more than required.
Why Partner with Shuraa India?
Shuraa India, with over 25 years of experience, is a leading business setup consultant in the UAE. Their expertise simplifies the process of starting a logistics company in Dubai, ensuring a seamless and cost-effective setup.
Comprehensive Services
- Company registration and licensing
- Visa processing and PRO services
- Office and warehouse sourcing
- Bank account setup
- Customs and regulatory compliance
Start Your Logistics Company in Dubai With Shuraa India
Starting a logistics company in Dubai is a rewarding venture, given the city’s strategic advantages and growing market. By following the steps outlined—defining activities, securing a license, and ensuring compliance—you can establish a successful business. Partnering with Shuraa India simplifies the process, offering expert guidance, cost-effective solutions, and comprehensive support.
Ready to launch your logistics business in Dubai? Contact Shuraa India today for a free consultation and turn your vision into reality. With their expertise, you’ll navigate the setup.
