How to Start a Logistics Business in Dubai?

Dubai sits at a prime position on the world map, serving as a global trade hub. Backed by a cutting-edge infrastructure, a strong market, and numerous free trade zones, the city creates lucrative opportunities for logistics services and operations. Additionally, the government invests heavily in improving supply chain operations. Hence, starting a logistics business in Dubai is a profitable business idea in this competitive business landscape.

Quick summary:-

• Logistics is required in almost every sector, from e-commerce to manufacturing.
• Logistics companies can leverage Dubai’s pro-business ecosystem, ownership privileges, and tax-free environment.
• Market research and legal compliance are the key requirements to sustain in the logistics industry.
• Special approvals from certain regulatory bodies are required.

This guide outlines the essentials of starting a small logistics business in Dubai, including the necessary permits and approvals, costs, documentation, and more. Whether you are planning to handle freight, deal with customs clearance, manage warehouses, or deliver by e-commerce, Dubiz can offer you the right advice to make it big in this growth sector.

A Brief Insight into Dubai’s Logistics Industry

The logistics industry in the United Arab Emirates is the backbone of global trade. The Emirate of Dubai serves as a global nexus for trade and commerce. According to the data, the UAE’s logistics market generated a revenue of USD 169.7 billion in the year and is expected to reach a projected revenue of USD 241.6 billion by 2030.

The UAE government’s strategic investments in infrastructure have significantly boosted operational efficiency and competency for logistics companies, enabling high turnover through transportation, warehousing, and distribution services. Despite all the challenges and political tensions, Dubai’s logistics sector tends to stay strong and affirmative.

What is a Logistics License in Dubai?

A logistics license is a legal permit that allows businesses to carry out logistics activities, such as freight forwarding, transportation, warehousing, and distribution services, within Dubai and internationally.

The Department of Economy and Tourism (DET) in Dubai is the regulatory authority responsible for issuing the logistics license for mainland businesses in the emirate. However, the respective Free Zone Authority issues this permit for free zone companies.

Primary Reasons to Start a Logistics Company in Dubai

A logistics business in Dubai offers several advantages to the business as well as its owner:-

• Tax Advantages: A tax-friendly environment with 0% corporate tax for eligible entities, 0% customs duties on re-exported goods, and zero personal income tax.
• Diverse Market: High demand for logistics services due to growing e-commerce, retail, and import-export sectors.
• 24/7 Cargo Operations: Faster processing and delivery times for cargo movement with 24/7 operation of ports, airports, and logistics facilities.
• Low Import & Re-Export Costs: Cost-effective management of international shipments with minimal import duties and zero re-export duties.
• Expanding E-Commerce Sector: Possibility to capitalise on increased demand for warehousing, last-mile delivery, and fulfilment services in the booming e-commerce sector.
• Strategic Location: Prime positioning on the global map, facilitating trade between Asia, Africa, and Europe and access to a wide range of potential partners, suppliers, customers, and skilled employees.
• Pro-Business Government: A competitive and fair environment for logistics companies, combined with constant support from the government to develop trade and business within the Emirate.
• Global Trade Agreements: A vast network of international trade agreements that streamlines trade worldwide and enhances growth opportunities for logistics companies.
• Business-Friendly Environment: Pro-business policies and streamlined licensing processes that help save time on bureaucracy and more time growing the business.
• Vibrant Business Ecosystem: A multitude of logistics companies operating within the Emirates create a robust ecosystem for finding and networking with partners, suppliers, and skilled workers and seeking invaluable support.
• Technological Advancements: Cutting-edge technology, including automated warehouses and real-time tracking systems, to boost efficiency, transparency, and reliability in operations.
• Economic Stability: A stable and diversified economy that helps in planning long-term growth strategies without worrying about sudden market commotions, thus providing a solid foundation for the logistics business in Dubai.
• Skilled Workforce: A diverse and skilled workforce from all over the world, bringing different perspectives and expertise to enhance innovation and efficiency in the logistics operations.

Understanding the Types of Logistics Business in Dubai

The key types of logistics businesses that can be incorporated in Dubai include the following:-

• Freight Forwarding: Specialises in arranging the shipment of goods, organising cargo transportation, handling customs clearance, managing documentation, and ensuring timely delivery.
• Warehousing and Storage: Provide storage facilities for goods, including traditional warehousing, cold storage for perishables, and specialised warehouses for imported goods that are pending clearance from customs.
• Transportation and Distribution: Focuses on the physical movement of goods through road, air, and sea transport and manages local distribution and international shipments by operating fleets of trucks, vans, or even specialised vehicles.
• Courier and Express Delivery Services: Caters primarily to the e-commerce and retail sectors by offering rapid and reliable delivery for smaller packages, including last-mile delivery, time-sensitive shipments, and same-day services.
• Supply Chain Management and 3PL Services: Manage the entire supply chain operations of the client, from procurement and inventory management to order fulfilment and reverse logistics, with real-time tracking and analytics.
• E-commerce Fulfilment: Offer combined services including inventory management, order processing, packaging, and shipping directly to customers.

How to Start Logistics Business in Dubai: Step-by-step Process

Setting up a logistics business in Dubai can be highly profitable. However, you need to follow a specific roadmap to reach the final destination effectively. Here’s a comprehensive guide to help you get started:-

Step 1: Define your Business Activity

Identify the specific type of logistics services you want to offer, as it will help you determine your licensing requirements, government approvals, and operational scope.

The common activities in this sector include freight forwarding, warehousing and storage, transportation and distribution, courier and last-mile delivery, and Third-Party Logistics (3PL) and supply chain management. Different activities may require different authority approvals, such as RTA, Dubai Customs, Civil Aviation, Maritime, etc.

Step 2: Choose the Right Location

The next step is to decide on a location – the mainland or a free zone. The mainland allows businesses to operate across the UAE without restrictions and bid for government contracts and public sector clients. However, freight-related businesses in this jurisdiction are required to appoint a Local Service Agent.

On the contrary, free zones limit business operations within the designated zone unless partnered with a local distributor. However, companies can enjoy 100% foreign ownership and limited taxes.

Jebel Ali Free Zone (JAFZA), Dubai South Free Zone, Dubai Logistics City (DLC), Dubai Airport Free Zone (DAFZA), and International Free Zone Authority (IFZA) are some of the ideal free zones for logistics ventures.

Step 3: Choose the Business Legal Structure

Depending on your ownership preferences, liability coverage, and shareholding requirements, select a legal entity, such as Sole Proprietorship, Limited Liability Company (LLC), Free Zone Establishment (FZE), Free Zone Company (FZCO), etc.

Step 4: Reserve your Trade Name

Choose a business name that adheres to the naming guidelines of the UAE government. For instance, no use of offensive or religious terms, no resemblance to any existing company names, and most importantly, reflecting the selected business activity.

Once selected, secure approval from the Department of Economy and Tourism (DET) for a mainland setup or the relevant Free Zone Authority for a free zone setup.

Step 5: Secure Office and Warehouse Space

A logistics business in Dubai Mainland must rent a physical office space as per the requirements of the DET. For storage or distribution activities, they must secure a warehouse space. On the other hand, free zone logistics companies can operate from an E-office. However, warehouse space can be mandatory for logistics or freight-related activities.

Step 6: Apply for a Trade License

Once the above-mentioned aspects are completed, apply for a logistics license from the DET or the respective Free Zone Authority. Depending on your specific activity, you may need to secure additional approvals from specific authorities, such as RTA (for transport businesses), Dubai Civil Aviation Authority (for air cargo services), and Dubai Maritime City Authority (for marine freight services).

Step 7: Complete Company Registration

Gather all necessary documents, including passport copies, address proof, initial approval and trade name certificate, MOA, etc. and submit them to the relevant authority to officially register the company.

Step 8: Register with Dubai Customs

Logistics businesses are often involved in the importing or exporting of goods. Therefore, you may need to obtain a Customs Code from the Dubai Customs. This code is essential in Freight Forwarding, 3PL & Supply Chain Management, and International trade and logistics.

Step 9: Open a Business Bank Account

Find a UAE-based bank that supports international transactions, trade financing, and customs-linked accounts, and is experienced in handling logistics business accounts. Provide the trade license, shareholder passport copies, company MOA, and business address proof to open a corporate bank account.

Step 10: Hire Staff and Register with Labour Authorities

A logistics business in Dubai requires skilled personnel, such as freight & logistics managers, drivers with RTA permits, customs clearance experts, warehouse operators, and support staff. Once hired, register the company with the Ministry of Human Resources & Emiratisation (MOHRE) and apply for an establishment card from the GDRFA. Make sure to secure work visas and emirates ID for expat employees.

Step 11: Acquire Vehicles and Equipment

Logistics businesses that involve transportation need to purchase or lease vehicles, such as delivery vans, trucks, trailers, etc. and register them with the RTA as commercial vehicles. Most importantly, drivers must have valid RTA commercial driving licenses, and all the vehicles must have GPS and fleet management tools installed.

Step 12: Obtain Final Approvals

Before going operational, make sure to secure the final logistics license, RTA approval, Customs Code, and approval from the Aviation or Maritime Authorities for air or sea cargo.

Step 13: Comply with UAE Business Regulations

Once the business is up and running, register for Corporate Tax if applicable, maintain proper financial records, comply with health and safety regulations for warehouses, vehicles, and staff, and adhere to trade compliance for import/export activities.

Step 14: Start Operations

Once all the logistics requirements are in place, launch marketing and client onboarding, set up logistics software or ERP systems, and start operating.

Documentation Requirements for a Logistics Business in Dubai

To start a logistics company in Dubai, you’ll need to submit the following documents:

• Passport and residence visa copies of all shareholders
• Passport copy and CV of the manager
• Trade name reservation proof
• Initial approval
• Legal agreement for a physical office or warehouse
• Proof of payment for the license

Arranging all the documents well-in-advance helps streamline the application process and get the business up and running within a short span.

Key Government Approvals to Start Logistics Business in Dubai

A logistics business in Dubai requires certain approvals from the relevant government bodies, such as:-

• Dubai Customs: For goods clearance and ensuring adherence to customs rules.
• Dubai Police: For approving security systems set up by warehouse and logistics companies.
• Aviation, Maritime and Roads & Transport Authorities: To function in the air, marine or land transportation sectors.
• Department of Food Control: For keeping food in storage and ensuring the safety of such products.
• Civil Defence: For ensuring that the import and export of hazardous materials are in line with safety and environmental rules.
• Ministry of Climate Change: For importing agricultural products, live pets, fertilisers, and other similar goods.

Costs to Start a Logistics Company in Dubai

The license cost for logistics company in Dubai can range typically between AED 11,900 to AED 28,000, depending on the business jurisdiction, license type, and operational requirements.

Additionally, several factors influence the overall license cost for logistics company in Dubai:-

Business Location:

• Free Zone License starts from AED 11,900 (more affordable)
• Mainland License starts from AED 25,500 (more expensive)

Type of License: Fee structures vary for different categories like cargo handling, transport, or general trading.

Visa Quota Requirements: The more the visa requirements, the higher the total cost.

Operational Needs: Includes office rent, warehouse space, and regulatory approvals.

Note: The costs mentioned are approximate figures. The actual cost may vary depending on the preferred business structure and other factors.

Therefore, it is highly recommended to consult with the business setup expert at Dubiz who can offer you personalized guidance, help you make the right choices, and ensure a compliant launch of your logistics business in Dubai.

Final Thoughts: Start Your Small Logistics Business in Dubai

In today’s fast-paced world, it has become critical to deliver goods and services faster. Businesses rely on logistics services to keep up the momentum. Be it transporting goods, managing supply chains, or expedited shipments, Dubai has a market for all kinds of logistics activities. However, to capitalise on these limitless possibilities, it’s important to make the right choices and follow the correct regulations pertaining to the logistics business in Dubai.

Get Expert Assistance from Dubiz Consultancy

Our professional consultants at Dubiz will handle the paperwork, licenses, approvals, and workspace formalities, allowing you to focus on your core business activities and goals and build a successful company. The team will meticulously guide you through each step and offer customised services to ensure a smooth and cost-effective business launch in the heart of Dubai.

Our specialists will help you with:-

• Selecting the right jurisdiction
• Understanding compliance rules and associated costs
• Securing appropriate permits and approvals
• Registering the company with the relevant authorities

Get your business moving forward with Dubiz.

📞 Call: +971 56 369 5485 

💬 WhatsApp: +971563695485

📧 Email: info@dubiz.co

Disclaimer: The information provided is for general guidance and is subject to change with updates in government policies or regulations.

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