Initiating a logistics company setup in Dubai involves both benefits and difficulties as the economy grows and the city is at a key location worldwide. Besides helping the emirate’s economy, its logistics market is particularly important. It is a major centre for both international trading and transportation. However, setting up a successful logistics business in the marketplace will require entrepreneurs to handle different strategic, legal and operational matters. So, in this guide, we will learn how to start a logistics business in Dubai, lively city.
What Does A Logistics License Mean In Dubai?
A logistics license in Dubai allows a business to carry out activities such as freight forwarding, transportation, warehousing and distribution services. Every company that participates in transporting, storing or managing goods in the Dubai logistics hub and other countries must have this license.
The Dubai Department of Economic Development gives logistics licenses to companies that conduct business in the Dubai mainland. However, if you would like to set up a logistics company in a free zone, the relevant Free Zone Authority will manage the licensing process.
Logistics Business vs. Shipping Business Setup in Dubai
To see how logistics and shipping companies differ in Dubai, first, understand the basic meanings of both.
Shipping means moving goods from one place to another. There are several types of shipping services, yet the two types most mentioned are shipping for products that are hazardous and fast shipping of products. Likewise, the two types of goods need separate ways of handling, managing, processing documentation, dealing with arrival times and transportation.
We pointed out earlier that logistics is the activity of moving goods or products from one location to another. Most of the time, it requires material handling, packaging, warehousing, and transporting items to their final destinations.
The difference between them is mainly in how much or how little they address. Logistics and supply chain operations cover much more than shipping logistics. It covers all the planning, linking, managing and supervising of all the actions in the process. Logistics forms a key part of the supply chain and is central to what businesses do. Therefore, businesses in Dubai have made logistics operations their most important priority.
Benefits of Starting a Logistics Company in Dubai
There are various other reasons besides a healthy economy and easy logistics company formation that you should choose Dubai as your business location. The following are a few basic points to consider:
- Dubai offers taxation benefits.
- The advantages of being in a free zone.
- Dubai leads in economic growth and has remarkable infrastructure.
- There should be no additional rules that stop businesses from choosing their trading sites.
- You don’t need to have a certain amount of capital to start business in the UAE.
- Involve UAE government agencies in your work.
- The investment can be totally repatriated, along with all profits.
- Many visas can be approved for these visitors.
- Being able to change and act independently in the business environment.
- The right to engage in importing and exporting.
- There is a wide variety of activities that people can do.
Types of Logistics Companies Operating in Dubai
Here are the main types of business structures you can set up in Dubai:
1. Freight Forwarding
Freight forwarding companies are hired to organise shipping for companies that need to move goods. Such companies handle the transportation of goods, arrange for customs clearance, look after necessary paperwork and keep goods on track by working with many different carriers.
2. Warehousing and Storage
Firms that let customers use their facilities for storage. Here you find traditional warehousing, storage for goods that can spoil, and, for example, bonded warehouses that secure imported goods awaiting customs clearance.
3. Transportation and Supply Chain
Many companies are concentrating on moving goods around using road, air and sea transport. Often, these companies run vehicles like trucks, vans, and specialised ones, and they are responsible for movements within the country and across international borders.
4. Courier and Express Delivery
Businesses are willing to deliver both quickly and securely for smaller packages. In this segment, companies concentrate on delivery to single addresses, urgent deliveries and same-day delivery for online shopping and retail.
5. Supply Chain Management and 3PL Services
They take over managing all the moving parts of a company’s supply chain. Everything from buying materials and keeping track of them to delivering and returning orders is included, often supported with technology to track details in real time.
6. E-commerce Fulfilment
Because online shopping has increased, specialised business setups in Dubai now provide integrated services in the UAE market that cover inventory, order processing, packing and sending goods straight to customers.
Government Approvals to Obtain a Logistics License in Dubai
If you want to obtain a global logistics license in Dubai, you may have to get certain approvals from the relevant government bodies. However, if you’re confused regarding which approvals you need, consult Xpert Advisory professionals.
Moreover, below, we’ve listed some standard authorities involved:
1. Dubai Customs: Dubai Customs allows goods to be cleared, making sure they follow the required customs rules.
2. Dubai Police: Dubai police approves security systems set up by warehouse and logistics companies.
3. Aviation, Maritime and Roads & Transport Authorities: They grant privileges that allow enterprises to function in the air, marine or land transportation sectors.
4. Department of Food Control: For businesses keeping food in storage, this department delivers important accreditations that ensure the safety of their products.
5. Civil Defence: Civil defence looks after the import and export of hazardous materials to confirm they are in line with safety and environmental rules.
6. Ministry of Climate Change: This ministry checks and approves requests to import agricultural products, live pets, fertilisers, and other similar goods.
How to Set Up a Logistics Business in Dubai, UAE?
If you wish to set up your logistics company in Dubai, follow these steps:
1. Set the Main Logistics Business Activity
Many specialised sectors make up the logistics industry in Dubai. Before you register your business in UAE, decide on the logistics services you’d like to provide:
- Freight Forwarding
- Activities in Warehousing and Storage
- Logistics
- Courier & Last-Mile Delivery
- The field of Third-Party Logistics (3PL) & Supply Chain Management
Picking the right business activity depends on determining the business plan, licenses, permits and approvals needed.
2. Choose Between the Mainland or a Free Zone
You have the option to start your logistics company either on the mainland or in one of Dubai’s free zones. However, there are pros and cons to every alternative:
Mainland Logistics Business
- The Department of Economic Development (DED) and the Roads and Transport Authority (RTA) must confirm the business if the main activity is transportation.
- Can serve individuals anywhere in the UAE mainland.
- Organisations in freight transportation need to work together with a local service agent.
- Government agencies can provide the company with projects, and it is free to work with other businesses and individuals.
Free Zone Logistics Form
- International logistics companies favour Dubai’s free zones for their great location and simple business rules.
- In the free zone, foreigners have complete control over business ownership.
- Not having commercial or personal income tax benefits companies a great deal.
- They can function in the free zone but must work together with a mainland business to carry out activities outside.
Leading Free Zones for Logistics Company in UAE
- The International Free Zone Authority is the head organisation in charge of free zones in the country.
- Jebel Ali Free Zone
- Dubai South Free Zone
- The Dubai Airport Free Zone
- The Dubai Logistics City (DLC)
3. Register the Name for the Company
Pick a name for your company that is acceptable in the UAE. Applying for preliminary approval is necessary with DED when starting a business on the mainland, whereas for free zones, it should be done with the relevant authority.
4. Get the Logistics License in Dubai
DED and the free zone authorities are responsible for giving logistics and trade licenses in Dubai. Further consents from authorities might include:
- Roads and Transport Authority (RTA): Must be obtained by companies that transport goods and passengers.
- Dubai Civil Aviation Authority: Businesses involved in air cargo are required to hold it.
- Dubai Maritime City Authority: A must for businesses working in sea freight.
5. Book Offices and Warehouses
Under Dubai DED rules, companies on the mainland have to rent an office. Free zone entrepreneurs might work remotely from home, but having warehouses for some activities is also necessary.
6. Apply for a Bank Account for Your Company
Find a UAE bank that allows logistics companies in the UAE to make simple and quick transactions. Make sure to hand over a business license, passport copies and documents that prove your business address.
7. Hire Employees and Report to the Labour Authorities
Having freight managers, drivers, warehouse workers, and people handling customs is necessary for logistics businesses. Give your workers the required visas and ID cards from the Emirates. A commercial driving license from the RTA is essential for anyone driving any heavy vehicle.
8. Purchase Work Vehicles and Tools
When starting a transport business, buy delivery vans, trucks or vehicles designed for moving freight. Get your business vehicles registered with the RTA and pick up the essential permits you require.
Essential Documents to Start a Logistics Business in Dubai
Now you know how to start a logistics business in Dubai, let’s discuss the documents required for this purpose:
- Photocopies of the passports of everybody who holds shares
- The original copies of shareholders’ visit or residence visas are necessary.
- A scan or copy of the manager’s passport and a copy of their CV
- Certification of trade name registration
- Your project must get approval from the relevant agency in the first place.
- The company signs an agreement for using a physical location as its office or warehouse in the UAE
- Evidence that the trade license has been paid
- If you have all these documents in hand, it will be easier to get your business running fast.
Estimated Costs for Starting a Logistics Company in Dubai
The cost of starting a logistics business in Dubai is affected by a range of factors. You need to keep in mind:
- Depending on what your business does as a logistics company, the logistics license fees may vary.
- The selection of vehicles and equipment will decide how much money you start with.
- Part of the setup expenses includes paying for driver skills training and development.
- Using security for your premises and tools can increase the total spending.
- You should budget to promote your brand and use advertising to establish an online presence.
- In some cases, having your business activities approved by government officials can add costs.
The estimated price to establish a logistics company in Dubai is usually between AED 10,000* and AED 50,000*.
Final Words
Knowing how to start a logistics business in Dubai can be rewarding for individuals interested in the region’s strong and flourishing logistics field. By setting up and following the correct regulations, you can establish a successful logistics company in the UAE, GCC, and worldwide. Whether you’re handling freight, dealing with customs clearance, keeping things in warehouses or delivering by e-commerce, the possibilities are limitless. The right advice and help will make a big difference.
Therefore, for the process to go smoothly and obey all laws, seek help from Xpert Advisory. We take care of the paperwork, licenses, sign-offs and setting up your workspace so that you can concentrate on your business. So, get in touch now and let us handle all the challenges so you can focus on building a thriving logistics business in UAE.
FAQs
Is the Logistics Industry a Profitable Business In Dubai?
Yes, the logistics sector indeed brings a high level of profit in Dubai. Because the city is a business hub and is well-placed geographically, it leads trade and commerce in the UAE, supporting logistics businesses. Moreover, there is a rising demand for logistics services all over the world.
How Much Time Does It Take to Obtain a Logistics Company License In Dubai?
It usually takes 7 to 10 days after all documents are complete to receive your logistics company license.
Is Dubai Suitable to Start Your Logistics Company?
Yes. The excellent infrastructure, opening to foreign trade and enticing tax policies have made Dubai perfect for logistics, cargo, a favourable business environment, and freight companies working around the world.
