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Business Setup in UAE/Dubai

How to start a logistics company in Dubai, UAE

October 12, 2021

The pandemic last year worked in several ways to reveal the weak points of the logistics industry globally, and also had severe repercussions. The UAE, however, is one of the only countries to have come out of the adverse scenario at the earliest. It is the only nation to have sustained growth in the logistics industry post-pandemic. UAE acknowledges the fact that the virus was there is there and will be there, but it needs to stabilize its logistics industry regardless, and keeping that in mind, UAE has done exemplary work so far. We must say that there could not have been a better time than now to start a logistics company in Dubai, UAE.

Dubai stands as the epicenter of trade and commerce in the UAE and there is no doubt that industries of all types are flourishing in this geography due to its favorable business environment. For the logistics industry specifically, Dubai’s geographic location and infrastructure make it an ideal gateway for supply and distribution, and the revenue is expected to generate over USD 30bn by 2035. The logistics industry in Dubai is also extremely competitive. This means you will require a good capital investment if you want to gain a strong foothold in this market and flourish in the future.

However, there is nothing to be apprehensive about. Here is a short guide to help you through the logistics business and through the various aspects of setting up a logistics company in Dubai, UAE successfully.

Key things to know before starting a logistics company in Dubai, UAE:

Internationally, there is no better place for a logistics business given the perks and benefits. However, there are certain things you need to be sure of before setting up a logistics company in Dubai/UAE:

  • Process related to the customs, documentation, and paperwork: you must be aware of all the procedures of the customs, the paperwork, and the documentation required. The customs and the clearance process are something you should be well aware of before venturing into the logistics industry.
  • Meeting your client in person: A one-on-one with the supplier in the logistics field is extremely helpful as it ensures clear communication between all involved parties and chances of any mishaps are curbed. Also, credit terms with a signed agreement are crucial. This helps that any conflict, later on, can be easily sorted.
  • Understanding the logistics market: the logistics market in Dubai is pretty fragmented, with a large number of suppliers all over the UAE. This means it's best to go with an experienced company. It will help you save costs, clearance fails, and are usually well-aware of all the customs rules.
  • Logistics in Dubai is assured to flourish especially because of the presence of some of the world’s busiest sea and airports. Also, it boasts of great road links to the neighboring Emirates and countries surrounding the UAE. So, whether you plan a logistics business to sell locally, internationally, or domestically, all options are feasible for you.
  • Setting up logistics business in Dubai has certain perks such as taxation benefits, where extremely low taxes are levied upon business.
  • There is no minimum capital requirement for this business, no currency limitations, and no visa limitations
  • Dubai offers a free cargo and freight connection along with free-zone benefits which enhances further business activities and opportunities.

Dubai leads the UAE market for logistics with some 45% of the total share. While there are other jurisdictions as well, but if you have serious aspirations for setting up your business, then Dubai is the place for you.

Dubai’s geographical location and infrastructure make it an ideal supply and re-distribution gateway. It is strategically located at the center of international trade, making it well-positioned globally as well as very well connected by air, water and roadways. This makes it a transshipment hub catering to the needs of increasing trade within global trade blocs.

Also, this is the best time to invest in and start a logistics company in Dubai. The UAE government’s new laws, flexible regulatory procedures, quick timelines, and easy application and approval processes make Dubai a great choice. Also, 100% ownership is available for the onshore company giving you complete access and freedom to operate freely.

The four key logistics business hubs in Dubai:

  • Dubai South Free Zone: Formed by the government of Dubai in 2006, the Dubai South Free Zone offers world-class infrastructure and outstanding support from the government. Located close to the Al Maktoum Airport, the Dubai South Free Zone has an area of 145 square km. This free zone is very well-planned with high-tech warehousing facilities and easy access to downtown Dubai. There are additional investments made by the government keeping in mind the prospects of the free zone as it emerges as a highly flourishing zone of Dubai. This is currently the most chosen jurisdiction by logistic companies in the UAE.
  • Dubai Airport Free Zone: the Dubai Airport Free Zone or DAFZA is another sought-after location for a logistics Business Setup in Dubai. Dubai airport is one of the world’s busiest airports with a trading route to Europe, and connected geographies, allowing great benefits to companies formed in DAFZA. DAFZA boasts of over 1800 companies and 15000+ professionals. Some of the biggest logistic conglomerates have their companies situated here.
  • Jebel Ali Free Zone: Jebel Ali Free Zone or JFZA was established in 1985. It has more than 8000 entities functioning in the jurisdiction currently making it one of the top free zone jurisdictions in Dubai. JAFZA attracts about 24% of Dubai’s FDI.
  • Dubai Logistics City (DLC), also known as Dubai World Central: the DLC is the world’s first platform built to promote logistics and trade facilities in the UAE. It covers an area of 140 sq. km. This free zone is Dubai’s biggest and most ambitious project taken up by the government. Companies in the DLC are spread over a vast area, with an air cargo turnover of almost 12 million tons a year.

Types of business activities licensed in Dubai, UAE for logistics:

The basic operations involved in a logistics company are the planning, implementation, and control of the movement of storage of goods, services, or information within a supply chain and between points of origin and consumption. Following are the types of business activities that can be carried out for logistics business in Dubai:.

  • Freight Brokerage:

Brokerage for air, sea, and land transportation by freight, handling matters with customs and insurance brokers..

  • Customs Broker: Preparing customs declarations and bills of lading, representing a declarant with customs authorities for cargo clearance.
  • Warehouse storage: This involves warehouse facilities and management, goods inwards, sorting, loading, unloading, packing goods, raw materials, and more.
  • Cargo Transportation:
    • Air Cargo Transportation: Air Cargo transportation can include air freight, packing and sorting at the airport, air fleet management including leasing and freight forwarding.
    • Sea Cargo Transportation: sea cargo transportation including containers, RORO and bulk sea freight, packing and sorting at the seaports, vessel and container leasing can be licensed
    • Land Cargo Transportation: Overland freight by road and rail, expediting shipments, dispatch support for groupage cargo.
  • Third-party logistics or 3PL: 3P applies to any service contract involving the storage and shipping of a commodity. This includes warehousing and transportation services for clients. A 3PL company may offer a single service like warehousing or transport or inventory management. However, they may also offer a system-wide bundling of services and management for a client’s entire supply chain.

Logistics company formation in Mainland and Free Zone:.

  • Logistics company formation in Dubai Mainland: Forming a company anywhere in Dubai has its benefits depending upon the jurisdiction. Logistic companies in the mainland are a very preferred choice as it has the maximum benefits that the country has to offer due to all types of markets available which gives way to profitable logistics business due to easy distribution throughout the UAE. Those who want 100% ownership of their business and operate freely both with imported and locally manufactured goods can take the mainland option.
  • Logistics company formation in Dubai Free zone: For logistics, you can expect the highest profits from the free zone, since certain jurisdictions are solely for logistics business. There are many free zone jurisdictions in Dubai for logistics business. Free zones provide great location and infrastructure, just like the mainland, and they are very well connected through the roadways, airways, and waterways, making business smooth and efficient.

However, there are certain limitations with the Free Zones that you should be aware of : 

  • You cannot operate with clients outside the jurisdiction of your free zone license, &
  • In the case of collaborating with big locals, mainland brands, or government entities, certain limitations as per the jurisdiction may be experienced.

Procedure for logistics company formation/registration in Dubai:

The procedure for setting up a logistics business has been put down for you here:

  • Define your business activities: Logistics cover a varied range of activities such as freight and cargo, carrier, and so on. So, it’s important to define what type of business are you planning within the logistics for yourself
  • Choosing the jurisdiction and company name: Company name should be unique and avoid any type of blasphemous language
  • Making your license application:
    • Fill up the application form
    • Submit all documents relevant to register your business.
    • The registration process may take up to 15 days
    • Submission of a detailed business plan
    • Submission of any additional documents as required or asked for
  • Making your visa applications
  • Opening a corporate bank account
  • After the process of submission and approval of all documents and opening a bank account, you can acquire a business license
  • Pay the required fees to the free zone authority
  • Finally, the registrar of companies can issue an incorporation certificate for your company

Documents required for setting up a logistics company in Dubai:

The documents required for setting up a logistics business in Dubai are minimal. I many cases, the maximum requirement would be just a completed license application form, colored photographs of the owner and shareholders, copy of your passport.

However, we suggest that you keep the following documents handy:

  • 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

How MBG can help:

At MBG, we offer business setup services in the Emirate chosen by you in the UAE, which are customizable to your needs. We understand your business idea well and with the help of our business setup consultants, we map and process your requirements of the business as per your needs. We help you with the entire process of logistics Company Formation in Dubai, right from advising you, guiding you, through the entire legal and company setup process, along with complimentary business setup services in Dubai that are included post-company formation in Dubai. Anything that you need to know about how to start a logistics company in Dubai, We are here for you at every step!


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