Dubai is a major international trade hub in the United Arab Emirates (UAE). The strategic location and the modern infrastructure encourages many entrepreneurs to step into the logistics business in Dubai. One such segment in the logistics sector is freight forwarding. If you are planning to start a freight forwarding company in Dubai, then you have the opportunity to be a part of a profitable venture. This blog will help you understand how to set up a freight forwarding company. Also, explore the landscape of freight broking in Dubai.
Back to topWhat is a Freight Forwarding Business?
It is necessary to understand the concept of freight forwarding before you start the process of business incorporation in Dubai. Freight forwarding is the international movement of products or goods by air, sea, rail, or road transportation with the help of effective planning and coordination. There is a huge demand for such logistics business in Dubai as import and export activities are crucial to its economy.
A freight forwarder ensures multiple end-to-end cargo transporting responsibilities. The major services provided by such freight companies are warehousing, cargo handling, customs clearance, insurance, port gate access, and multimodal transportation.
Back to topWhy Start a Freight Forwarding Company in Dubai?
Dubai offers a suitable environment for setting up a shipping business in UAE. It is mainly because the Emirate serves as a gateway between the East and the West. In addition, a booming online retail market, access to major shipping routes, and a government that encourages international trade, makes Dubai an ideal destination to start a freight forwarding company. Let us look at some of the key benefits:
- Access to major global markets due to the strategic location of the Emirate.
- World-class seaports and airports including the Jebel Ali Port, Khalifa Port, and Dubai International Airport.
- Emerging e-commerce sector with increasing demand for efficient logistics and distribution channels.
- The booming economy places a strong emphasis on international shipping, warehousing, and last-mile delivery solutions.
- A Dubai free zone company formation lets you enjoy tax rebates, simplified business registration, complete ownership, and full repatriation of profits, to name a few.
- Low import duties makes it cost-effective to get goods into the country.
What Services are Offered by a Freight Forwarding Company in Dubai?
Starting a logistics business in Dubai is a profitable business opportunity for entrepreneurs from across the world. Top freight forwarding companies offer the following services:
Air Freight Services
Are you looking to open a freight forwarding company in Dubai? You can consider providing air freight services, which helps in quickly transporting time-sensitive and fragile items. Leading companies provide customs clearance, door-to-door delivery, and expert handling for perishable items.
Sea Freight Services
One of the pillars of the shipping business in UAE is maritime shipping. Full Container Load (FCL) and Less than Container Load (LCL) choices are offered by the companies, along with value-added products like insurance and cargo tracking and handling.
Land Transportation Services
Road freight services are crucial for distribution of goods within the region or Gulf Cooperation Council (GCC). Such businesses offer trucking services with both full truck load (FTL) and less than truck load (LTL) alternatives.
Warehousing
Modern warehouse facilities are provided by a freight forwarding company in Dubai. The companies choose Dubai free zones for economical storage options. The services include distribution, pick-and-pack, and inventory management.
Back to topHow to Start a Freight Forwarding Company in Dubai?
If you’re wondering how to set up a freight forwarding company in Dubai, here’s a step-by-step guide of the entire process:
Step 1: Define your Business Services
The first step in starting a logistics business is to identify the type of freight forwarding services your business will offer. Some common services that you can choose from are air freight forwarding, sea freight forwarding, land freight forwarding, customs and clearance, and warehousing and distribution. You will be issued a commercial trade license in Dubai based on the nature of your business.
Step 2: Choose the Right Jurisdiction
A freight forwarding company in Dubai can be set up either in the mainland or free zone. A company in the mainland offers the flexibility to trade anywhere across the UAE with the help of a local sponsor. You can also choose to set up business in the free zones. They offer benefits such astax incentives, full foreign ownership, and ease of doing business. Some important free zones in Dubai where you can set up a freight forwarding business areJebel Ali Free Zone (JAFZA) and Dubai Airport Free Zone (DAFZA).
Step 3: Decide the Business Structure
The next step is to decide the business structure of your company, depending on your capital and business model. You can choose from the following business structures such as proprietorship, limited liability company, general partnership, branch of a foreign or GCC company, and private limited company.
Step 4: Register the Company Name
The next step is to register your company name with the Dubai Department of Economic Development (DDED). The business name should be unique and not be similar to other registered companies. It should adhere to the naming guidelines as set by the DDED.
Step 5: Get an Initial Approval
The next step is to apply for an initial approval from the Dubai authorities in the form of a ‘no objection certificate’ (NOC). Once you get the approval, you can now proceed to the next steps of the business setup process.
Step 6: Draft Important Documents
The next step is to create important documents such as memorandum of association (MOA), articles of association (AOA), and board resolution.
Step 7: Register with Custom Authorities
As a freight forwarding company in Dubai involves trade across the border, it is important to register with the UAE Federal Customs Authority and Dubai Customs.This will allow you to smoothly clear shipments on behalf of your customers during the entire import and export process.
Step 8: Submit Required Documents
You can now submit the necessary documents required for company registration such as a copy of the NOC, MOA, AOA, and Board Resolution, copy of the lease agreement of office space, and approval of customs authorities.
Step 9: Get the License
Pay the necessary fees and collect the commercial license from DDED. You can now begin business operations.
Starting a freight forwarding company in Dubai is a highly profitable decision. The city’s world-class infrastructure, government support, and thriving economy will definitely boost your logistics business. If you are an entrepreneur looking to venture into the logistics sector in Dubai, contact us. Our expert consultants will help you understand the business setup process, choose the right location, and comply with local regulations to create a solid foundation for success.
Back to topIs digital freight forwarding allowed or recognised in Dubai?
Yes, you can operate a digital freight forwarding platform or app if you have the appropriate commercial license and comply with local e-commerce and logistics regulations.
Are there government initiatives to support logistics startups?
Yes, the Dubai Industrial Strategy and Dubai Logistics Corridor are designed to support logistics and supply chain businesses.
Can I operate without owning my own trucks or ships?
Yes, a freight forwarding company in Dubai acts as non-asset-based intermediaries, coordinating shipments using third-party carriers such as airlines, shipping lines, and trucking companies.
