Dubai has firmly established itself as one of the world’s leading logistics and trade hubs. Its strategic location at the crossroads of Europe, Asia, and Africa, combined with world-class infrastructure, has attracted entrepreneurs from all over the globe looking to set up logistics companies.
Whether transporting goods via sea, air, or land, Dubai’s logistics industry plays a crucial role in facilitating international trade. If you’re considering starting a logistics business in Dubai, understanding the process, benefits, and key steps is essential. This guide will walk you through everything you need to know to start your logistics company successfully in Dubai.
What is a Logistics License in Dubai?
A logistics license in Dubai is a legal permit that allows businesses to operate within the logistics industry. This license is required for companies engaged in various logistics-related activities such as freight forwarding, warehousing, and cargo transportation.
The logistics license is issued by the Department of Economic Development (DED) for businesses operating in mainland Dubai, while free zones have their respective authorities handling the licensing process.
To legally offer logistics services, companies need to comply with specific regulations set by Dubai’s authorities. Obtaining a logistics license opens the door to several business activities, including customs brokerage, warehousing, and transport services.
A logistics license is essential for businesses looking to import and export goods across international borders and ensure that they comply with UAE’s logistics laws and regulations.
What are the Benefits of a Logistics Business Setup in Dubai?
Setting up a logistics business in Dubai offers numerous advantages that make it an attractive option for entrepreneurs. The business-friendly policies, strategic location, and advanced infrastructure provide a competitive edge. Here are some key benefits of starting a logistics company in Dubai:
1. World-Class Infrastructure
Dubai boasts modern ports, airports, and roads, ensuring efficient movement of goods. The city’s logistics infrastructure is built to support high volumes of trade, facilitating seamless transportation through various modes like air, sea, and land.
2. No Income Tax
The UAE does not levy any personal or corporate income taxes on businesses, making it a tax-efficient jurisdiction for logistics companies. Entrepreneurs can reinvest their profits back into the business.
3. No Minimum Capital Requirements
Unlike other business sectors, setting up a logistics company in Dubai does not require a hefty upfront capital investment. This encourages startups and small businesses to enter the logistics market.
4. No Trading Location Restrictions
Businesses in mainland Dubai can operate across the UAE without any restrictions on trading within specific zones, offering flexibility and scalability for logistics companies.
5. Low Import Duty
The UAE imposes relatively low import duties, with certain goods exempt from customs duties. This facilitates the free flow of goods, making it cheaper for businesses to import and export products.
6. Government Support and Funding
The UAE government actively supports logistics and trade businesses with various incentives and funding programs. Initiatives like the Dubai Industrial Strategy 2030 and Dubai Plan 2021 encourage investment in the logistics sector.
Types of Activities Allowed Under the Logistics License
A logistics license in Dubai covers a wide range of activities, allowing businesses to offer a variety of services under one license. Whether you’re providing transportation or managing warehouses, the logistics license encompasses several key business functions.
Below are the major activities allowed under a logistics license.
- Freight Broker: A freight broker arranges the transportation of goods on behalf of shippers. They connect clients with carriers and ensure that shipments are transported efficiently.
- Custom Broker: Custom brokers handle customs clearance for importers and exporters, ensuring compliance with the UAE’s customs laws and regulations for the smooth movement of goods across borders.
- Warehouse Storage: Logistics companies can operate warehouse facilities for storing goods before distribution or transport. This service is critical for supply chain management and inventory control.
- Air Cargo Transportation: Air cargo transportation companies specialize in the transport of goods via air. This service is essential for businesses that require fast delivery, particularly for international shipments.
- Sea Cargo Transportation: Sea cargo transportation involves the movement of goods by sea, an economical option for large or heavy shipments. Companies in this sector manage shipping routes, cargo handling, and delivery.
- Land Cargo Transportation: Land cargo transportation businesses manage the movement of goods by road. This is an essential part of the logistics industry in Dubai due to the interconnected network of highways that facilitate regional trade.
- Third-Party Logistics (3PL): Third-party logistics companies offer comprehensive logistics services, including transportation, warehousing, and distribution, on behalf of other companies. This allows businesses to outsource their logistics operations and focus on core activities.
How to Start a Logistics Company in Dubai UAE
Setting up a logistics business in Dubai requires careful planning and adherence to legal procedures. The process involves multiple steps that cover everything from choosing your business activities to opening a corporate bank account. Below is a step-by-step guide on how to start a logistics company in Dubai
Choose Your Business Activity
Before starting, you must decide what kind of logistics services you plan to offer. Whether it’s freight forwarding, warehousing, or transportation, selecting the right business activity will determine the type of license and permits required.
Select a Location
Dubai offers a choice between mainland and free zone business setups. The decision depends on your business goals. Free zones offer 100% ownership, while mainland businesses have fewer restrictions on trading within the UAE.
Some of the free zones in UAE where you can set up your logistics business are:
- Dubai Airport Free Zone
- Dubai Maritime City Free Zone
- Dubai Logistics City Free Zone
- Jebel Ali Free Zone
- Khalifa Port Free Trade Zone
- Abu Dhabi Airport Free Zone
- Sharjah Airport International Free Zone
- Ajman Freezone (AFZ)
- International Freezone Authority (IFZA)
Select a Company Name
Choosing the right name for your company is crucial. The name should comply with UAE naming conventions and should not include any offensive or religious terms. Once selected, the name must be registered with the authorities.
Apply for Trade License
To legally operate, you must apply for a logistics license from the relevant authority (DED for mainland or the chosen free zone authority). The license application includes submitting necessary documents like a business plan, passport copies, and residency details.
Apply for UAE Visa
To live and work in Dubai, you need a UAE residence visa. As a business owner, you can apply for your own visa, as well as visas for employees and dependents, allowing you to recruit and manage a workforce in the UAE.
Open a Corporate Bank Account
Once your company is legally registered, you will need to open a corporate bank account in Dubai to manage your finances. Choose a bank that offers services suitable for your business needs, considering factors like international transfers and digital banking options.
How much does the logistics license cost in Dubai?
The cost of a logistics license in Dubai varies depending on whether you choose a mainland or free zone setup. In general, the cost ranges between AED 15,000 to AED 50,000. This fee covers registration, initial approvals, and government fees.
Additional costs may arise depending on office space rental, visa quotas, and other operational needs. While free zones often provide affordable packages, mainland companies benefit from unrestricted trade across the UAE.
Start a Logistics Business in Dubai with SolutionsFZCO
Starting a logistics company in Dubai can be a complex process, but SolutionsFZCO can help streamline the journey. From choosing the right location to handling all the paperwork, our experts provide end-to-end support for business setup.
With years of experience and knowledge of Dubai’s regulatory framework, we ensure that your business is up and running efficiently, saving you time and effort. Partner with SolutionsFZCO today to take the first step towards establishing a successful logistics company in Dubai.
Frequently Asked Questions
Is Logistics Profitable in Dubai?
Yes, logistics is a highly profitable business in Dubai, thanks to the city’s strategic location, world-class infrastructure, and growing trade volumes. The government’s commitment to supporting the logistics sector also contributes to profitability.
Can I start a small logistics company in Dubai?
Yes, you can start a small logistics company in Dubai. The UAE’s flexible regulations allow for various company sizes, from small-scale startups to large enterprises. With no minimum capital requirements, small businesses can enter the market with lower initial investment.
