Why is the UAE the Right Choice for Setting Up a Logistics Company?

The strategic location of UAE coupled with Government support and initiatives towards promoting trade locally and internationally has transformed the region into a trade hub of the world.

UAE is an international transit hub and an intermediary stop point for international trade across the world. It has a robust logistics support system, warehouse facilities, a dedicated zone for handling large cargos, and many more.

How to Start a Logistics Company in UAE?

UAE is home to a bunch of international trading companies as well as numerous local entrepreneurs in the field of Logistics and trade operations. As a new business venture in the trade and logistics segment, the company must be bringing in innovation or an advanced business model to strive through the intense competition in the segment.

However, despite the competition, there is a vast opportunity in the field of logistics and distribution. Often large companies in the logistics segment only work with higher quantity and premium service fee, low cost providers might lack in customer service and technology-driven strategic implementations.

Entrepreneurs with a fair knowledge of the UAE market segment and customer preference will succeed in launching their business venture easily in UAE

Ideal Free Zones for opening a Logistics Company in UAE

Each Free Zone in UAE has distinct benefits and based on investor requirements the right Free Zone Business Setup Package is to be chosen. Aurion will assist you in picking the right choice for your business by assessing your precise business requirements.

Note: The list of Free Zones included below is not an exhaustive list, there are more than 45 Free Zones in UAE and most of the Free Zones offer business License for the activities under the Logistics sector.

The below list of Free Zones is curated based on the business benefits for the investors of a logistics company by setting up their business in the below Free Zones.

1. Dubai Airport Free Zone

Dubai Airport Free Zone is the world’s top Free Zone offering attractive company formation packages to the global investors. Dubai Airport Free Zone is the ideal choice for setting up a logistics company due to the enormous business benefits offered by the Free Zone.

Dubai Airport Free Zone – Key Highlights

The proximity to one of the world’s busiest airport makes it easy for trading and logistics companies to handle the Air Cargo Shipments at reduced transportation cost and handling fees.

The Free Zone offers custom-build warehousing facilities and light manufacturing & assembling units starting from 350Sq.m onwards with an office space and 30 employee visas.

The 0% import duty on all imports to Free Zone, Zero Taxation policies, and 100% foreign ownership are the highlights for foreign companies considering this Free Zone as the final choice.

Also, the easy company setup, UAE residence visa processing, bank account opening, and the prestigious Dubai Address is the additional benefits for the entrepreneurs.

2. Sharjah Airport International Free Zone

The Sharjah Airport International Free Zone is a reputed Free Zone in the emirates of Sharjah. The proximity to the Sharjah International Airport and the Khalid Sea Port makes this Free Zone the right Launchpad for logistics and trading companies aiming at local, GCC, and International Markets.

The company formation in SAIF Zone is relatively easy with minimum paperwork. The Free Zone also offers custom-build warehouses, land of warehouse/manufacturing units, as well as customized office spaces.

To know more about the warehouse specifications in the Sharjah Airport Free Zone, enquire with our experts!

3. Dubai South Free Zone

Dubai South Free Zone is the fastest growing Free Trade Zone and a preferred logistics hub in Dubai.

Dubai South specifically caters to logistics and trading companies by offering state of the art warehouses of customizable sizes to suit a wide range of requirements from the entrepreneurs.

With easy access to the Jebel Ali Port through a special logistics corridor and the Al Maktoum International Airport (DWC), the Free Zone is transforming the logistics and distribution network in UAE.

How to Setup a Logistics Company in Dubai South?

The Dubai South Free Zone offers numerous business setup packages for investors by following simple steps. Taking the assistance of expert Business Consultants will make the company registration process hassle-free.

Steps in Setting Up a Logistics Company in Dubai South Free Zone

• Prepare the application form for the initial approval
• Choose the right trade name and get the approval
• Choose the right business setup package (License type, office space, office type) – Aurion will assist you here in choosing the right company setup package)
• Prepare the documentation (shareholder resolution, passport copy, business plan) and submit the relevant documents for the company registration
• Pay the required fee and obtain the business license post-approval of the documents
• Also, obtain the company documents such as the incorporation certificate, special approvals (if any)
• Proceed to apply the UAE Residence Visa and Bank Account opening

So, in a nutshell, UAE is the perfect location for establishing a logistics company and easily scale up by tapping into the growing business opportunities in the region.

Here are few more choices of Free Zones for Setting up a Logistics Company in UAE, watch the full video!

There are numerous small and big trading companies and a growing consumer base in UAE. Logistics and distribution companies are the means to connect these suppliers/manufacturers with the end-consumer.

Those companies that provide exceptional service will get positive customer feedback and will be able to scale up easily with a growing number of order fulfilments.

To know more about Starting a Logistics Company in UAE, talk to our Expert Team right away!

Read more about “Tips for Setting up a Trading, Logistics, or Supply Chain Company in Dubai” and Import export licenses in UAE.

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The SAIF Zone is a designated zone (VAT Free Zone) and has an in-house customs checkpoint for easy clearance of shipments. The proximity to Sharjah airport makes it a preferred choice for trading and import-export companies.

The Free Zone is the perfect choice for a wide range of companies such as air freight forwarding companies, international distribution companies, and trading firms to easily transport goods to global markets.

Why Choose SAIF Zone for Setting up a Trading Company?

The SAIF Zone has a well-established infrastructure offering a wide range of facilities starting from shared office space to large manufacturing units. It caters to a large business community with varying business requirements.

It is also close to the busy seaport, the Khalid Port, and two other deepwater ports the Khorfakkan Port and Hamriyah Port, facilitating faster and more streamlined import-export operations.

SAIF Zone offers investors a host of business benefits along the lines of operational efficiency, lowering costs, and expansion to international markets. The company setup process in the Free Zone is easy and hassle-free.

The Free Zone offers a cost-effective Trade License package, office space, and warehouse facilities to the investors. It is a perfect choice for setting up an import-export company in the UAE.

How Do the Import Export Companies Operate in a Free Trade Zone based in UAE?

For starting an Import Export Company anywhere in the world and successfully operating it to achieve business growth, it is a pre-requisite to know more about the Import, export tax, customs duty, and other taxation norms of the area where the business is operating.

In UAE, there are two major business jurisdictions for company formation – The Mainland and the Free Zone. They have distinct characteristics and business benefits. For Trading Companies especially to facilitate import, export, and trading in international markets, the Free Zones are the right choice.

There is Zero Customs duty on imports to the Free Zone, as well as most of the Free Zones have a customs checkpoint and are in proximity to the busiest Airports and seaports of UAE.

Also, the Free Zones in UAE have good connectivity by roads to major business centers and consumer markets across the UAE and Oman.

Hence, with the well-established logistics, storage facilities, and transportation network, the Free Zones are ideal destinations for an international trading company to easily facilitate faster trade operations.

What are the benefits of Starting an Import – Export Company in a Designated Free Zone?

A designated Zone as specified in the UAE Cabinet decision is a VAT Free Zone. For VAT, the designated Free Zones are considered to be out of the purview of VAT.

The Designated Free Trade Zones in UAE is where the VAT is charged at ‘Zero Percent’ or there is no VAT payment required for companies trading in the Designated Free Zone. There are few conditions to be met for classifying the transaction as VAT free.

For an Import-Export Company being in a designated Zone has many advantages. The absence of import-export duty, VAT exemptions, in-house customs clearance, etc., will help them to attain long-term profitability.

Designated Zone’s movements of Goods for VAT treatment:

The import export operations through Designated Free Zone has many advantages such as VAT Exemptions, Import Duty Exemptions, in-house Customs Clearance, etc. The following table highlights the movement of Goods and related VAT applicability on the transfer of goods to and from the Free Zone.

Required Documents for Free Zone Importing and Exporting Goods

To initiate the import and export of goods there are various documents required for the smooth transfer. The movement of Goods to and from the Free Trade Zones are regulated by the respective Free Zone’s Customs Department.

There are several ways the Goods can be transferred to and from the Free Zones in UAE. Following are the most common ways of goods transfer to and from the Free Trade Zones in UAE. There are few documents required by the authorities depending on the mode of goods transfer.

1. Importing Goods to Free Zone from Foreign Country/Outside UAE:

• Bill of Lading/Custom Bill (Air Way Bill or Bill from Terminal of Arrival)
• Suppliers Invoice
• Packing Lists/Delivery Note
• Bill of Entry (Free Zone Customs Form) to be filled upon entering of goods

2. Importing Goods to Free Zone from Mainland:

• Suppliers Invoice
• Packing Lists/Delivery Note
• Bill of Entry (Free Zone Customs Form) to be filled upon entering of goods

3. Exporting Goods to Foreign Country/Outside the UAE from Free Zone:

• Bill of Entry
• Suppliers Invoice
• Invoice to Customer
• Packing Lists//Delivery Note
• Bill of Exit (Free Zone Customs Form) to be filled upon exiting of goods

4. Exporting Goods to Mainland from Free Zone:

• Bill of Entry
• Suppliers Invoice
• Invoice to Customer
• Packing Lists//Delivery Note
• Bill of Exit (Free Zone Customs Form) to be filled upon exiting of goods

Note:

• In exporting goods to Mainland distributor is not required or Mandatory, that depends on the agreement between the Supplier and Customer.
• 5% duty is imposed on goods imported from abroad excluding goods in transit to GCC countries. However, the duty varies on some goods according to the tariff.
• Goods originating from GCC countries are treated as UAE local goods, provided that 40% of the raw materials used for manufacturing such goods is originated in the GCC

Import Operations through Sharjah Port – Things to know

The Sharjah Port handles huge volume of trade in UAE. It is one of the busiest Ports in the UAE. The companies operating in the Free Zones of UAE can opt for shipping their goods or importing goods to UAE via the Sharjah Port.

Hence, If the Import Operations is through Sharjah Port, then the documents will be as follows:

• Delivery Note
• Packing Lists
• Original Invoice from Supplier
• Attested Certificate of Origin
• Bill of Lading
• Receipt of Custom Duties/settled payment
• Inspection Report from Sharjah Port
• Bill of Entry/Import Declaration

If the above documents are not completed, then the amount of AED 1000 to be deposited and can only be refunded after completion of the required documents.

Export Operation through Sharjah Port

Below are the documents required for conducting Export Operations through Sharjah Port:

• Original Invoice
• Bill of Exit/Export Declaration

To know more about Designated Free Zone for VAT or Starting a Trading Company in the UAE Free Zones, talk to our expert team right away!

Read more about “Tips for Setting up a Trading, Logistics, or Supply Chain Company in Dubai“.

The post How to Import and Export Goods from a Free Zone in Sharjah? – Things to Know appeared first on AURION.

Global Trade and Supply Chain is reviving fast from the COVID-19 Pandemic effect. Businesses are getting back to normal. Shipping and Logistic companies are always on demand as it supports global trade and economic growth.

7 Tips to Know Before Setting Up a Trading, Logistics, or Supply Chain 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

US is a major export market for the UAE. Also, a lot of US companies would choose UAE for setting up their base to actively trade in the Middle East, Africa and Asian Markets. Hence partnership with US Companies and setting up a base in UAE will result in profitable business.

UAE – A Major Trade Hub

Goods ranging from Commercial Aircrafts, Power Generating Equipment, Defence Equipment, Computers & Electronics, transportation, etc., are majorly involved in the exporting business. Oil and gas production remains critical to the UAE economy, contributing to about one-third of GDP. UAE is being actively involved in Oil exploration, Crude Oil processing, Storage, transport, etc.

Off late, UAE is diversifying into other sectors to raise the economy and lower the dependence on oil and move to other core sectors like technology, real-estate, smart transportation, digital computing, etc.

2. Market Entry Strategy

For doing business in UAE companies must be having a local distributor or office in the UAE. Being a trade hub of the world, UAE is all set to support international trading and business activities.

The well-connected transport links and geographic location of the UAE make it a perfect place for the logistics business and setting up an export hub.

3. Doing Business in the UAE

The exporters aiming to set up business in UAE must be doing a thorough market study before they sign up for any contract. Conducting business operations in the UAE has its onset of opportunities and challenges similar to any global marketplace.

UAE is a commercial and trade hub of the world and has emerged as a popular logistics & transport hub connecting Asia with Europe and beyond.

Awareness on Trade Regulations, Financing Terms, Customs Clearance

The regulations, credit terms, financing, legal aspects, customs clearance, etc., must be studied in detail. There are certain restrictions in place for shipping to de-listed countries as well as commodities. So the investor must be well aware of the regulations to be met to sustain in the long run.

Experienced business consultants like Aurion will guide you in the right direction to launch your trading business successfully and 100% full proof and hassle-free. Our expert team will work with you throughout and beyond company formation in the UAE. Talk to our team right away!

4. Financial Barriers Faced by Exporters

The exporters must be aware of the financial requirements and the various options available to conduct trade. In some instances, financial trade would not be possible through banks due to compliance issues, or any regulation in place.

In such cases, alternate financing options and credit insurance must be of choice for the investor.

5. Export Credit Facility and Insurance

Exporters are always at the risk of offering credit facilities to their suppliers and they defaulting or performing any fraudulent activities.

Hence, having credit insurance will save the exporter in such cases of default payments. It is an insurance solution that will mitigate geopolitical and commercial risks in export transactions.

Importance of Credit Facility and Insurance for Exporters

When suppliers are spread across geographies, there is always a risk of unprecedented circumstances occurring. Export Credit Insurance is a solution for the peaceful execution of export business transactions.

Also, entrepreneurs must be well aware of the long payment cycles, associate financial terms with export contracts, and take calculated risks.

6. Trading in International Markets

Trading in the international markets will have a direct impact on the market conditions and changes in the dollar and global oil prices. These are the two major market drivers in international trade.

As hedging for managing the losses due to currency downfall, trading in a single currency the US dollar is advisable for large sipping companies operating large-scale businesses. Also for small-scale logistics export companies exporting to the US, the best option is to trade in US dollars.

7. Company Formation Structure

Before starting an export company, the investors must be aware of the company formation structure in the UAE as well as the Free zones and Mainland Business Setup and benefits. UAE business infrastructure offers the perfect platform for foreign owners and UAE nationals to coexist, coordinate, and conduct business.

There are various partnership options such as forming a Limited Liability Company with shareholders where the major shareholder (51%) will be a UAE national. Then there is a 100% foreign-owned company in the Free zones of 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 about import export company setup & details of getting a license for importing gold from Ghana to UAE, talk to our experts right away!

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