How to Start a Logistics Company in Free Zone, Dubai, UAE

DubaiSouthMay 26, 2022

223 7 minutes read

How-to-Start-a-Logistics-Company-in-Free-Zone-Dubai-UAE

Last year’s pandemic revealed several flaws in the global logistics industry, as well as having serious consequences. The UAE, on the other hand, is one of the few countries to have emerged from the bad situation as soon as possible. It is the only country that has experienced sustained growth in the logistics industry following the pandemic. UAE acknowledges that the virus was present, is present, and will remain, but it must stabilise its logistics industry regardless, and in this regard, UAE has performed admirably thus far. We believe that there has never been a better time to start a logistics company in Free Zone, Dubai, UAE.

Dubai is the epicentre of trade and commerce in the UAE, and industries of all types are flourishing in this region due to its favourable business environment. Dubai’s geographic location and infrastructure, in particular, make it an ideal gateway for supply and distribution, and revenue is expected to exceed USD 30 billion by 2035. Dubai’s logistics industry is also fiercely competitive. This means that if you want to establish a strong foothold in this market and thrive in the future, you will need to make a substantial capital investment.

There is, however, nothing to be concerned about. Here is a brief guide to navigating the logistics industry and the various aspects of successfully establishing a logistics company in Dubai, UAE.

Important information to consider before establishing a logistics company in Dubai, UAE:

Given the perks and benefits, there is no better place for a logistics business on a global scale. However, there are a few things you should be certain of before establishing a logistics business setup in UAE:

Customs, documentation, and paperwork processes: You must be aware of all customs procedures, paperwork, and documentation requirements. Before entering the logistics industry, you should be well-versed in customs and the clearance process.

In-person meeting with your client: A one-on-one meeting with a logistics supplier is extremely beneficial because it ensures clear communication between all involved parties and reduces the likelihood of any mishaps. Credit terms with a signed agreement are also essential. This makes it easier to resolve any future conflicts.

Understanding the logistics market: The logistics market in Dubai is quite fragmented, with many suppliers spread across the UAE. This means that hiring an experienced company is the best option. It will help you save money, avoid clearance failures, and are usually well-versed in all customs rules.

Logistics in Dubai is certain to thrive, thanks to the presence of some of the world’s busiest seaports and airports. It also has excellent road connections to the neighbouring Emirates and countries surrounding the UAE. So, whether you want to start a logistics business to sell locally, internationally, or domestically, you can do so.

Setting up a logistics business in Dubai has certain advantages, such as tax benefits, where businesses pay extremely low taxes.

This business has no minimum capital requirement, no currency restrictions, and no visa restrictions.

Dubai provides a free cargo and freight connection, as well as free-zone benefits, which boosts additional business activities and opportunities.

Dubai controls approximately 45 percent of the UAE logistics market. While there are other jurisdictions, if you are serious about establishing your business, Dubai is the place to be.

The geographical location and infrastructure of Dubai make it an ideal supply and re-distribution hub. It is strategically located at the heart of international trade, making it well-positioned globally and well-connected by air, water, and roads. As a result, it serves as a transshipment hub, catering to the needs of growing trade within global trade blocs.

In addition, now is the best time to invest in and launch a logistics company in Dubai. Dubai is an excellent choice due to the UAE government’s new laws, flexible regulatory procedures, short timelines, and simple application and approval processes. In addition, the onshore company can have 100 percent ownership, giving you complete access and freedom to operate.

Dubai’s four major logistics business hubs are:

Dubai South Free Zone: Established in 2006 by the government of Dubai, the Dubai South Free Zone provides world-class infrastructure as well as exceptional government support. The Dubai South Free Zone is 145 square kilometres in size and is located near Al Maktoum Airport. This free zone is well-planned, with high-tech warehousing and easy access to downtown Dubai. The government has made additional investments in light of the free zone’s prospects as it emerges as a highly flourishing zone of Dubai. This is currently the most popular jurisdiction for logistics firms in the UAE.

Dubai Airport Free Zone (DAFZA): Another popular location for a logistics business setup in Dubai is the Dubai Airport Free Zone (DAFZA). Dubai airport is one of the busiest in the world, with a trading route to Europe and connected geographies, providing significant benefits to companies formed in DAFZA. DAFZA is home to over 1800 businesses and 15000+ professionals. Some of the world’s largest logistic conglomerates have their headquarters here.

Jebel Ali Free Zone (JFZA): The Jebel Ali Free Zone (JFZA) was founded in 1985. It currently has over 8000 entities operating in the jurisdiction, making it one of the top free zone jurisdictions in Dubai. JAFZA receives approximately 24 percent of Dubai’s FDI.

Dubai Logistics City (DLC), also known as Dubai World Central, is the world’s first platform designed to promote logistics and trade facilities in the United Arab Emirates. It has a total area of 140 square kilometres. This free zone is Dubai’s largest and most ambitious government project. The DLC’s companies are spread across a large area, with an annual air cargo turnover of nearly 12 million tonnes.

Types of logistics business activities licenced in Dubai, UAE:

A logistics company’s basic operations include the planning, implementation, and control of the movement and storage of goods, services, or information within a supply chain and between points of origin and consumption. The following are the different types of business activities that can be carried out in the logistics industry in Dubai:

Freight Brokerage: The brokerage of freight transportation by air, sea, and land, as well as dealing with customs and insurance brokers.

Customs Broker: The preparation of customs declarations and bills of lading, as well as representing a declarant with customs authorities for cargo clearance.

Warehouse storage entails warehouse facilities and management, goods inwards, sorting, loading, unloading, packing goods, raw materials, and other activities.

Transportation of Cargo:

Air Cargo Transportation: Air cargo transportation can include air freight, airport packing and sorting, air fleet management (including leasing and freight forwarding), and freight forwarding.

Sea Cargo Transportation: Sea cargo transportation includes containers, RORO, and bulk sea freight, packing and sorting at seaports, and vessel and container leasing.

Land Cargo Transportation: Overland freight by road and rail, shipment expediting, and dispatch support for groupage cargo.

Third-party logistics, also known as 3PL: 3P applies to any service contract involving commodity storage and shipping. This includes client warehousing and transportation services. A 3PL company may provide a single service such as warehousing, transportation, or inventory management. They may, however, provide system-wide bundling of services and management of a client’s entire supply chain.

Formation of a logistics company on the mainland and in a free zone:

Dubai Logistics Company Formation Mainland: Depending on the jurisdiction, forming a company anywhere in Dubai has advantages. Logistic companies on the mainland are a popular choice because they reap the most benefits from the country’s diverse markets, allowing for profitable logistics operations thanks to easy distribution throughout the UAE. Those who want complete control over their business and the freedom to sell both imported and locally manufactured goods can choose the mainland option.

Dubai Logistics Company Formation Zone de liberté: Because certain jurisdictions are solely for logistics business, you can expect the highest profits from the free zone. In Dubai, there are numerous free zone jurisdictions for logistics businesses. Free zones, like the mainland, offer great location and infrastructure, and they are very well connected via roadways, airways, and waterways, making business smooth and efficient.

There are, however, some restrictions with the Free Zones that you should be aware of:

You cannot operate with clients outside the jurisdiction of your free zone licence, &

collaborating with large locals, mainland brands, or government entities may result in jurisdictional limitations.

Formation/registration of a logistics company in Dubai:

The steps for establishing a logistics company are outline below:

Define your company’s activities: Logistics encompasses a wide range of activities such as freight and cargo, transportation, and so on. So, within the logistics for yourself, it’s critical to define what type of business you’re planning.

Choosing the jurisdiction and the name of the company: The company name should be distinctive and free of blasphemous language.

Making an application for a licence:

Complete the application form
Submit all documents required to register your company.
It is possible that the registration process will take up to 15 days.
Submission of a comprehensive business plan
Submission of any additional documents that may be require or request

Making your visa applications

Opening a corporate bank account

You can obtain a business licence after submitting and approving all documents and opening a bank account.
Pay the free zone authority the required fees.
Finally, the registrar of companies can issue your company an incorporation certificate.

Documents required for establishing a logistics company in Dubai include:

The paperwork needed to start a logistics business in Dubai is minimal. In many cases, the only thing needed is a completed licence application form, coloured photographs of the owner and shareholders, and a copy of your passport.

We recommend, however, that you keep the following documents on hand: