7 Tips for Import & Export Company Setup in Dubai
Trading, logistics, and the supply chain are the backbone of global economic advancement. The UAE has positioned itself as a leading global trade hub, boasting a robust infrastructure that fosters international trade.
Global trade and supply chains are swiftly recovering from the impact of the COVID-19 pandemic, with businesses returning to their usual operations. The demand for shipping and logistics companies remains high, given their crucial role in supporting global trade and economic development.
7 Tips to Know Before Setting Up an Import Export Company in UAE
There are certain parameters export companies must be aware of
and must consider having a smooth business operation.
1. Studying the Market Well
The UAE considers the US a key export market. Additionally, many US companies opt for the UAE as their hub to engage actively in trade across the Middle East, Africa, and Asian markets. Therefore, forging partnerships with US companies and establishing a presence in the UAE can lead to lucrative business opportunities.
UAE – A Major Trade Hub
A wide range of goods, including commercial aircraft, power generating equipment, defense gear, computers, electronics, and transportation, play a significant role in the export industry. Oil and gas production is vital to the UAE economy, contributing around one-third of the GDP. The UAE actively engages in oil exploration, crude oil processing, storage, and transportation. Recently, the UAE has diversified into other sectors to boost the economy, reduce reliance on oil, and focus on areas such as technology, real estate, smart transportation, and digital computing.
2. Market Entry Strategy
To engage in business in the UAE, companies are required to have a local distributor or office established within the country. As a global trade hub, the UAE is fully equipped to facilitate international trade and business endeavors. The well-established transport infrastructure and strategic geographic location of the UAE render it an ideal destination for logistics operations and the establishment of export hubs.
3. Doing Business in the UAE
Exporters looking to establish a presence in the UAE should conduct a comprehensive market analysis before committing to any agreements. Doing business in the UAE presents a mix of opportunities and challenges akin to international markets. As a global commercial and trade center, the UAE has become a pivotal logistics and transport hub linking Asia to Europe and beyond.
Awareness on Trade Regulations, Financing Terms, Customs Clearance
Thoroughly examine regulations, credit terms, financing, legal aspects, and customs clearance for a comprehensive understanding. Specific restrictions apply to shipping to sanctioned countries and certain goods. Investors must comprehend and adhere to these regulations for long-term sustainability.
Seasoned consultants like PRO Consultancy can expertly steer you towards a successful trading venture, ensuring a foolproof and smooth process. Our experienced team will assist you not only in company formation in the UAE but also provide ongoing support. Get in touch with our team today!
4. Financial Barriers Faced by Exporters
Exporters need to understand the financial prerequisites and available trade avenues. Sometimes, banking constraints or regulatory hurdles may hinder financial transactions. In such scenarios, investors should consider alternative financing methods and credit insurance.
5. Export Credit Facility and Insurance
Exporters are constantly exposed to the possibility of extending credit to their suppliers, who may default or engage in fraudulent behavior. Therefore, having credit insurance can protect exporters in cases of payment defaults. This insurance provides coverage against geopolitical and commercial risks in export transactions, offering a comprehensive solution to mitigate potential financial losses.
Importance of Credit Facility and Insurance for Exporters
When suppliers are located in various regions, the possibility of unexpected events arises. Export Credit Insurance offers a solution for ensuring smooth execution of export transactions. Entrepreneurs should have a good understanding of extended payment cycles, align financial terms in export agreements, and make informed decisions when taking risks.
6. Trading in International Markets
Trading in the global markets significantly influences market conditions, particularly the fluctuations in the dollar and global oil prices, which serve as primary drivers of international trade. To mitigate losses from currency devaluation, it is recommended for major shipping corporations engaged in large-scale operations to hedge by trading solely in the US dollar. Likewise, for small logistics export firms shipping to the US, the most viable strategy is to conduct transactions in US dollars.
7. Company Formation Structure
Before embarking on establishing an export company, investors should familiarize themselves with the company formation structures in the UAE, including Free Zones and Mainland Business Setup, along with their associated benefits. The business infrastructure in the UAE provides an ideal foundation for both foreign investors and UAE nationals to collaborate effectively. Partnership options range from forming a Limited Liability Company with a UAE national as the majority shareholder (51%), to establishing a 100% foreign-owned company within the Free Zones of the UAE.
Investors can choose from a wide range of company formation
packages available in the UAE based on the exact business requirements.
To know more, talk to our experts right away!