All about the Logistics Business in the UAE

by Zaara 22, Aug 2019

All about the Logistics Business in the UAE

Logistics is both art and science of moving goods, services, and information in and out of an organization. In a business, it encompasses aspects of supply chain involving inventory management and the transport of goods. Any company can encounter numerous advantages from getting to grips with logistics and handling it more efficiently, but with tighter funds and shorter margins, it's particularly crucial for SMEs to focus on these possible cost savings that could mean all the difference between make or break.

UAE has a great business environment backed by government incentives. There are many lucrative and attractive areas in the UAE. One of those is, indeed, logistics business and any activity related to it. It is undoubtedly one of the most profitable companies in the UAE. There is a massive demand from consumers regularly that causes rapid growth in domestic and global transportation. It applies to both expansive scale worldwide cargo administrations and local wholesale deliveries of different goods.

Starting a Logistics Business in the UAE

Investing and opening a logistics company in the UAE will have infinite benefits with keeping in mind the laws and company guidelines of the country. The demand for the services of logistics corporations shows that there isn't a deficit of companies within the Emirates who can give these amenities. There are thousands of logistics in the UAE, mainly in Dubai and Ras Al Khaimah. In Dubai, there is an exclusive free zone separately allotted for the logistics business, i.e. Dubai Logistics City. Let us know more about this free zone.

Dubai Logistics City Free Zone

Starting a business in the Dubai Logistics City FZ will bring you a whole set of business opportunities and competitive advantages in the international market. Following are the possibilities if you open a business in this free zone.

  • You can carry out business in this zone without paying tax, both on the local and international market
  • Proper banking service, as well as possible to engage modern logistics centres
  • Global optimization of tax and customs payment
  • Ability to ensure freight forwarding activities and optimization of the pricing policy

Business Activities in DLC Free Zone

The different activities to be carried out in this zone are as follows-

  • Forwarders with multi-modal cargo handling
  • Logistics service providers
  • Contract logistics service providers
  • Industry and trading companies
  • Companies that support logistics community
  • Companies carrying out light assembly

Advantages of Setting up a Company in DLC Free Zone

  • 100% repatriation of capital and profits
  • Any type of businesses possible
  • Commercial independence and flexibility
  • No government restrictions on the distribution of gained profits and withdrawal of investment assets
  • Import and export privileges
  • No currency exchange regulation
  • International-level infrastructures
  • Low-cost energy resources

Today, the Dubai Logistics City free zone is the largest international logistics perform, which unites the most different types of transport services, including qualified personnel and the appropriate infrastructure. Hence, starting a business in this zone will be beneficial in the near future.

If you want to start a business in this free zone, the steps involved are mentioned here

Ras Al Khaimah Free Trade Zone

One of the largest international supplying platforms for company owners is currently the Ras Al Khaimah free zone. This free zone unites the foremost distinctive types of transport administrations, as well as a qualified faculty and the proper framework of the company. The excellent conditions and wide range of cutting edge innovations allow logistics companies to concentrate on the viable and improved supply chains. Logistics business in RAK free trade zone is a universal transport centre, which consolidates both airport cargo transportation and freight shipping. The free trade zone also offers additional operations in the field, some of which include checking and packing of goods or their final assembly.

The main question is deciding on the location where you want to set up your company. Will it be a free Zone or Mainland? Both the jurisdictions have their benefits and disadvantages of starting a business. Like the area of a free zone is physically limited due to which you will not be able to cover the whole market, but a foreigner can get full ownership of the company, while in a mainland you have full access to the UAE market but you will need a local sponsor to have 51% of the shares in the company.

If you want to start a logistics company in the UAE, then we at Commitbiz can help you with it. Contact us today- we’d be happy to assist you.

FAQs

What are the different types of logistics business activities that can be licensed in the UAE?

The different types of logistics business activities that can be licensed in the UAE are,

  • Freight broker

  • Customs broker

  • Warehouse storage

  • Air cargo transportation

  • Sea cargo transportation

  • Land cargo transportation

What are the four essential logistics business hubs in Dubai

 The four essential logistics business hubs in Dubai are,

  • Dubai South Free Zone 

  • Dubai Airport Free Zone

  • Jebel Ali Free Zone

  • Dubai Logistics City (DLC)

Can a foreigner own 100% foreign ownership in starting a logistic business in Dubai mainland?

Yes

What documents are required to establish a logistics company in Dubai?

  The following documents are required for setting up a logistics company in Dubai.

  • Passport copies of the shareholders

  • Personal data of the shareholders and managers

  • Trade name reservation proof

  • Proof of initial activity approval

  • Attested Articles of Association (AOA) and Memorandum of Association (MOA)

  • Document showing legal agreement of the physical address of the company

What is the procedure for logistics company formation in Dubai?

The process for setting up a logistics business in Dubai is,

  • Define your business activities

  • Choosing the jurisdiction and company name: 

  • Making your license application:

  • Making your visa applications

  • Opening a corporate bank account

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